Cargill looks to Biodiesel

01/03/06 Greenergy Fuels, part of the Greenergy group of companies and the UK market leader in biofuels, has confirmed that Cargill, a leading international food and agriculture company, has taken a 25 per cent shareholding in its subsidiary Greenergy Biofuels Ltd.

The announcement sees Cargill become the third major stakeholder in Greenergy Biofuels Ltd joining Greenergy and Tesco. Cargill has been working with Greenergy to manage the supply of rapeseed – and to provide the crush facilities for its conversion into oil for biodiesel production. Greenergy Fuels, in which Tesco is a 25 per cent shareholder, owns the remaining 75 per cent of the business giving Tesco a stake in the plant. Tesco is the leading biofuel retailer in the UK, now offering biofuel blends at more than 40 per cent of its petrol stations.

Greenergy Biofuels Ltd is currently building its first biodiesel production plant at Immingham on Humberside, UK. Scheduled to come on-line in Q4 2006, the £13.5 million plant will produce more than 114 million litres (100,000 tonnes) of pure biodiesel per year and plans are already underway to double this capacity in response to an increasing rise in demand for biodiesel.

Greenergy also announced that it intends to co-develop with Cargill another biodiesel plant in the Liverpool area. This is subject to the successful conclusion of feasibility and business case studies. Cargill’s existing crush facilities in the port of Liverpool are a key factor in this potential investment.

Anne Guttridge, Cargill Europe’s grain and oilseed supply chain manager, commented: “We are seeing an increasing demand for feedstock and finished biodiesel product, which will represent a significant new revenue chain for farmers. Cargill's strengths in trading, sourcing raw materials, processing, transportation, and running top class plants makes the biodiesel industry a natural fit. Meanwhile, our existing operations in the UK have the capabilities to secure the supply of raw materials for both food customers and biodiesel production.”

Lucy Neville-Rolfe, Tesco Group director of corporate affairs, added: "We are pleased to be involved in this partnership which demonstrates our commitment not only to helping our customers become more environmentally responsible - but also to British farming. As the UK's leading retailer of biofuel blends, backing this investment is a sensible business decision, securing a robust supply of biofuels in the UK."

Andrew Owens, Managing Director of Greenergy Fuels Ltd welcomed the announcement saying: “Our partnership with Cargill and Tesco is a powerful indication of the future significance of biofuels, with both feedstock suppliers and forecourt retailers cementing their position in the supply chain.

“In the last five years, the production of biofuels in the UK has moved from being a small industry to a multi-million pound business. Home grown biofuels are not only providing environmental benefits but are also helping to provide national security through local sourcing.”|

With biodiesel plants on the east coast Humber estuary and west coast Mersey estuary, Greenergy will have a presence in two of the most important oil refining regions in the UK. Having world class biodiesel production facilities on both coasts gives unmatched access not only to the raw materials for production but also to the fuel supply chain.