ARF says bio-diesel is set to boom

ARF bio diesel 14 February 2011
By Jackie Range
Published inThe Financial Review

Bio-diesel outfit Australian Renewable Fuels is predicting a surge in revenues as it ramps up production.

Australia’s biggest manufacturer of bio-diesel, which made revenue of $2.87 million in the year ended June 30, 2010, is targeting revenues of about $130 million in the year ended June 2012, and some $190 million in the subsequent year.

ARF may also make more acquisitions- it is now completing its purchase of Biodiesel Producers by assuming its $21 million of convertible debt.

As well as growing in the sector, the company is looking to position itself as supplier of bio-diesel across Australia, particularly to service large customers who want one suppler across the nation. It already supplies Caltex, Wesfarmers and BHB Billiton, among others.

“There are some other plants in Australia that would be of interest from their geographic position, and fundamentally we would look to expand the overall network ,” said managing director Tom Engelsman.

ARF might expand into power generation and desalination, where bio-diesel could be used.

The company is now set to increase production, which would drive the planned increase in revenues. After it completes the Biodiesel Producers deal, ARF will have an annual total production capacity of 150 million litres of bio-diesel a year.

The company’s bio-diesel plants are producing at 25 per cent of capacity a deliberate cutback while it tests plant design and feedstocks.

Mr Engelsman believes Australian bio-diesel production is set to grow.

“I suspect that it will do in terms of the overall range that is seen in the overseas markets, where some 25- plus per cent of the total diesel consumption is on a renewable source.”