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August 28, 2007
Malaysian palm trader buys into US biodiesel production
2007-05-10 10:08:12 EDT
***MALAY PALM FIRM BUYS BUDDING U.S. BIODIESEL PRODUCER
Felda Holdings Bhd, a Malaysian company said to be the world's largest palm oil producer, announced yesterday that it agreed to buy a U.S. oleochemical and biodiesel producer with big plans for expanding its biofuel output.
With an eye to expanding its biofuel presence around the world, Felda inked a memorandum of understanding with Quincy, Mass.-based Twin Rivers Technology that would give it a controlling interest in the company. Terms of the deal, which is still subject to due diligence and approval of both company boards, were face down, but sources said Felda had sought a 70%-80% stake infamily- owned Twin Rivers. The deal should be completed over the next three months.
Annual revenues at Twin Rivers were said to top $200 million. Some of its biggest customers include biodiesel producers Peter Cremer and Stepan Co.
Twin Rivers has a long history in biodiesel, though not extensive. The company was formed in the mid-1990s with the idea of retrofitting a former Procter & Gamble plant in Quincy to make its "EnviroDiesel" biodiesel. The company instead ended up focusing on fatty acids, glycerin and other products used in soap and cosmetics industries -- only producing small volumes of biodiesel at Quincy.
However, Twin Rivers aggregated additional facilities and other assets over the last several years that it planned to, in part, devote to biodiesel. Along with its Quincyoperation, the company has facilities in Cincinnati and Painesville, Ohio, as well as the Fore River Transportation Co. short line railroad that services Quincy with access to the national rail system.
In essence,it has been back to the future as far as its latest biodiesel plans. Twin Rivers recently set out a phased expansion into commercial biodiesel production that would eventually push its output to 70 million gal/yr. Next year, the company expected to beginretrofitting its Cincinnatiplant to make biodiesel at the rate of about 35 million gal/yr. Following that, expansion work to around 35 million gal/yr was pegged for Quincy. The Painesville plant has also been tapped as a future biodiesel production site.
Twin Rivers also offers ship access, as well as bulk liquid terminals and warehouse facilities scattered through several Midwest and East Coast states.
The Felda deal provides strong financial backing for Twin Rivers growth projects, commented one industry player, as well as a very special connection to the palm oil markets. By some accounts, Felda provides up to 8% of world palm oil demand. Felda officials said they expect to grow Twin Rivers operations, but provided little specific details.
Spencer Kelly, skelly@opisnet.com
Copyright, Oil Price Information Service
Posted by Martin at August 28, 2007 9:00 PM
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