November 11, 2011

Dutch company eyeing to build Asia's largest ethanol plant in the Philippines

Netherlands-based North Sea Group plans to build Asia's largest ethanol manufacturing plant in the Philippines.

Energy Undersecretary Jay Layug said the Dutch company has expressed interest to construct a 400-million-liter ethanol processing plant at a still undisclosed location in the country.

Once built, Layug said the facility would not only be the biggest ethanol plant in the Philippines but also in the whole of Asia.

The company, he said, would be sourcing multi-feedstock for the ethanol plant using cassava, sugar cane and sweet sorghum.

Layug said the company is upbeat on the Philippine ethanol industry particularly with the looming increase in the mandated ethanol blend from 5% to 10% in February 2012.

He said the group is currently conducting a study on the proposed project.

According to the energy official, there has been a lot of interest from ethanol producers in the Philippine market.

North Sea Group is a key player in the Western European downstream oil market. The company combines storage and distribution with international trading and sale of mineral oils and biofuels. Its customers include major oil companies, the international shipping industry, trading houses and resellers.

By expanding into Asia and South America, the European company is further broadening its position on the increasingly global oil market, paying careful attention to issues of safety, sustainability and the environment.

The group's commercial divisions trade in all mainstream mineral oil products such as heavy fuel oil, automotive diesel, heating oil, marine diesel, kerosene and mogas.

Over the past few years, biofuels have become a key new product group for North Sea Group.

From January to December 2010, actual ethanol sales in the Philippines reached 9.2 million litres with an equivalent foreign exchange savings of $5.13 million from fuel displacement (based on $88.91 import cost per barrel of unleaded gasoline from January to December 2010).

The Biofuels Act of 2006 mandates that by February 2012, gasoline must contain at least 10% blend of ethanol. At present, the ethanol blend is at 5%. Given the 10% bioethanol blend requirement, the market would need 480 million litres. With only 107 million litres available for next year, this means that the country would need to import some 373 million of bioethanol.