Currently, the company is producing 36,000 litre biodiesel per day and supplies to the Andhra Pradesh State Road Transport Corporation and South Central Railways among others.
The company has signed a memorandum of understanding with a Singapore-based company to identify around 50,000 acre for raising biodiesel plantations along with local farmers. The company will offer a buy-back arrangement of the crop at the prevailing market price and also establish a crushing unit in Singapore. It will sell the oil cake in the local markets there and import the oil to India.
The plant would have a crushing capacity of 250 tonne per day. It will produce 275,000 litre biodiesel per day. It will procure around 75% of the feedstock requirements from local resources and import some non-edible oils. The plant also produces omega fatty acids, agri products, glycerine apart from biodiesel that will be sold in the domestic market.
In its first plant at Nalgonda, the company has spent INR260 million.
Southern Online Bio Technologies is also working on a public-private partnership project with ICRISAT to teach farmers on biodiesel seed collection and nursery plantations. However, the farmers will be asked to sell the produce to Southern Online Bio.
Managing Director Satish Kumar said that the proposed third plant requires an investment of around INR1.5 billion that would be raised through equity and debt in the ratio of 1:1.5.
“It would take six to nine months for this agreement to be operationalised,” Kumar said, adding around INR300 million would be needed for the getting the land on lease and also for setting up the crushing unit.
Meanwhile, work on the second plant, which is coming up at the APIIC Special Economic Zone in Visakhapatnam, is nearing completion and anticipated to start production by October 2009. Aum Consultancy is designing the project. “About 70 % of the civil works are over at the SEZ plant, which is estimated to cost INR90o million of which the equity portion is INR360 million and debt INR540 million,” Kumar said.
