D1 Oils plans to invest Rs 26 cr in India over next three years

Encouraged by the Indian government's bio-fuel programmes, the London-based D1 Oils Limited, a global leader in bio-diesel technology, is planning to invest close to Rs 26 crore in India over the next three years.

The company will set up over 20 refineries in eight states including Andhra Pradesh where the Union government is planning to encourage bio-fuel plantations.

The states are Andhra Pradesh, Maharashtra, Madhya Pradesh, Uttar Pradesh, Tripura, Gujarat, Tamil Nadu and Chhattisgarh. Its first refinery will come up in Andhra Pradesh early next year.

Mark L M Quinn, chief executive officer of D1 Oils Limited, told Business Standard that the company had chosen Andhra Pradesh "because of the proactive approach of the state government".

The company would establish backward linkages with the farmers through farmers' co-operatives, and as part of the forward linkage will set up several bio-diesel refineries with capacities of 8,000 tonnes per annum in the states concerned.

The company has signed a memorandum of agreement with the city-based Nandan Agro Farms Private Limited. Quinn and V Bhaskar Rao, managing director of Nandan Agro, signed the MoU. As per the MoU, Nandan Agro would set up nurseries and supply quality seedlings of jatropha to the farmers' co-operatives. It will also assist D1 Oils in procuring and processing the seeds from the farmers.

Quinn said that the company had decided to launch a proof-of-concept project soon. It will set up a refinery in the state and import crude vegetable oils to produce bio-diesel.

The experiment seeks to instill confidence among the farmers to take up cultivation of energy crops, he said. D1 Oils also, in association with Nandan Agro Farms, will launch a pilot programme by February 2005 by producing quality seeds and raise nurseries for seeds distribution to the farmers.

Nandan Agro will set up nurseries with the seeds developed at its own research labs at Zaheerabad, near Hyderabad. Methods of inter-cropping the jatropha plantation with coconut trees, vanilla, pachouli etc would be propagated among the farmers.

"It is a win-win situation for all involved in the programme "� farmers, private enterprises and governments," he said.

A refinery of 8,000 tonnes capacity would require around 24,000 tonnes of jatropha seeds from around 5,000 hectares of land. As per conservative estimates, the yield per hectare is a minimum of six tonnes per annum from around 2,000 trees, assuring a minimum income of $500 per hectare, Quinn said.

Quinn said that D1 Oils Limited would also lease its refineries to cement and mining companies which can then utilise bio-diesel to generate power from their captive units.

Nandan Agro managing director V Bhaskar Rao and director B Jayakumar said that the company would be setting large-scale jatropha nurseries. It had examined 200 varieties of plants before choosing jatropha.

Over 20 species of jatropha were further studied and finally the company had selected jatropha curcas (Ratanjyot), they said. The company was also making efforts to make use of the by-products of de-oiled cake like neutraceuticals and bio fertilisers.

The company had over nine years of experience in the cultivation of medicinal plants in over 6,000 acres through its franchisee networks across the country.