US$20m required for expansion: Green Fuel
http://www.theindependent.co.zw/
October 26, 2012 in Business
CHISUMBANJE-based ethanol producer Green Fuel says it requires US$20 million
in fresh capital to expand operations in the event government approves an
impending mandatory 20% ethanol blending on petrol.
Report by Taurai Mangudhla
Green Fuel general manager Graeme Smith told businessdigest during a tour of
the US$600 million ethanol plant there were indications government would
soon approve a 20% mandatory blending policy.
If that happens, Billy Rautenbach’s company would have to raise new capital
to bankroll a “minor” expansion exercise. The Chisumbanje ethanol plant is
the biggest in Africa.
He said the company has the human resource, equipment and enough cane at its
disposal to support the 20% blending requirement.
“It’s basically what we have got and just expanding it and we are talking
figures of around US$40 million,” Smith said.
“We only need to increase the number of mills. We will increase the number
of boilers so that we increase steam and we will be able to put a second
generator and extend the distillery,” he added, saying every vehicle in the
country can use E20 (petrol blended with 20% ethanol) without any
modification.
Green Fuel currently has capacity to produce enough ethanol to meet demand
for 10% mandatory blending which it has been pushing for.
However, the company is awaiting legislation that compels fuel dealers to
blend their petrol with 5% ethanol after government gave the nod to the
arrangement in principle.
“As you reported yourselves they (cabinet) have agreed to the 5 % mandatory
blending. However, that has not been implemented as yet, so we have stock
that we are unable to move at the moment,” said Smith.
In the company’s view, approval of the proposed mandatory policy is dragging
on account of “misconceptions” of viability of the product.
“In certain sectors of government they don’t have a clear understanding of
the benefits of this to the country so the DPM (Deputy Prime Minister Authur
Mutambara) is exposing this to the entire cabinet and to the inclusive
government so they understand what the benefits of this plant are and what
it can do for the country,” said Smith.