Australian Renewable Fuels’ Acquisition of Biodiesel Producers Limited is Complete

4 April 2011
Melbourne, Australia

Australian Renewable Fuels Limited (ASX:ARW) today announced the finalisation of the company’s acquisition of Biodiesel Producers Limited (BPL).

In a strategic move to consolidate the industries plants in Australia, ARW has acquired the state-of-art plant signifying the company’s intention to capitalise on the under-utilised Australian market. Australian mineral diesel consumption sits at just 18 billion litres per annum, half of which is imported, with this expected to change to be in line with the rest of the world within the next few years.

Due to the burgeoning mining and long haul transportation industries, the use of diesel is high in Australia, and in other parts of the world, this is being readily replaced by biodiesel due to cost, availability and its environmental benefits.

“Biodiesel is a high growth industry and Australia has yet to reach the consumption levels of other countries that see renewable fuels as important from both from an environmental and financial point of view,” said Tom Engelsman, Chief Executive Officer, Australian Renewable Fuels.

“This acquisition is critical in consolidating the supply of biodiesel and giving ARW a national footprint, which is critical due to the geographic landscape of Australia.

“ARW’s three plants are centrally located to fully realise the potential of growing this market both locally and internationally.”

The acquisition of Biodiesel Producers Limited gives the group a combined invested asset value that now exceeds $100 million.

This is a major coup for ARfuels and its strategic plan to be the leading Biodiesel supplier in Australia.

BPL has a state-of-the-art plant based in Barnawartha, Victoria, that uses world leading technology, converting tallow and waste cooking oil into quality diesel fuel that is significantly lower in toxic and greenhouse gas emissions than normal diesel. This adds to the company’s assets, with three fully functional state-of-the-art plants that produce biodiesel of an international standard, fully compliant with the Australian Fuel Standards.

ARW has a wide range of feed stock capacity and is industry-leading with its research and development works in area such as algae, mustard seed, jatropha and pongamia oils as well as other lower cost non-edible feed stocks.

“This acquisition is instrumental in ARW’s strategic direction to provide biodiesel Australia-wide, and with our strong relationships with major fuel companies as well as distributors and major mining operations, will ensure that the benefits of the acquisition are realised,” said Engelsman.

“With carbon trading back on the agenda, biodiesel is seen as a solution for many companies, in regards to overall greenhouse gases and will ultimately generate carbon credits,” says Engelsman.

The BPL facility has a capacity of 60 million litres per annum increasing the capacity for ARW to 150 million litres per annum, making the company the only Biodiesel public-listed entity and national biodiesel company in Australia to have this quantity of supply.

The ability to leverage feedstock logistics and further optimise the use of specific low cost alternate feed stocks for all plants will give ARW more scope to leverage market opportunities particularly in the area of industrial and transport supply.

The BPL plant is unique with a high FFA capacity, ensuring cheaper feedstock. ARW is currently looking at other means to review alternative feedstock which ultimately will reduce the cost of feedstock and lower the company’s pricing model.