Southern Online Biotechnologies is planning to set up a third biodiesel plant by the year end even as its second plant is getting ready. The proposed plant would come up in Anantapur, Kurnool or Chittoor districts and cater to markets in Tamil Nadu and Karnataka.
The company currently produces 36,000 litre biodiesel per day and supplies to the Andhra Pradesh State Road Transport Corporation and South Central Railways among others.
Speaking to Business Standard, managing director Satish Kumar said the proposed plant would require an investment of about Rs 150 crore, which would be raised through equity and debt in the ratio of 1:1.5. It would have a crushing capacity of 500 tonne per day.
The company has signed a memorandum of understanding with a Singapore-based firm to identify about 50,000 acre for raising biodiesel plantations along with local farmers. Southern Online would offer a buy-back arrangement of the crop at the prevailing market price and also set up a crushing unit in Singapore. It would sell the oil cake in the local markets there and import the oil to India.
“It would take six to nine months for this agreement to be operationalised,” Kumar said, adding about Rs 30 crore would be needed for the getting the land on lease and also for setting up the crushing unit.
Meanwhile, work on the second plant, which is coming up at the APIIC Special Economic Zone in Visakhapatnam, is nearing completion and expected to commence production by October. Chennai-based technology partner Aum Consultancy is designing the project on a turnkey basis. “About 70 per cent of the civil works are over at the SEZ plant, which is estimated to cost Rs 90 crore of which the equity portion is Rs 36 crore and debt Rs 54 crore,” he said.
The plant would have a crushing capacity of 250 tonne per day and produce 275,000 litre biodiesel per day. It would procure about 75 per cent of the feedstock requirements from local resources and import some non-edible oils. The plant would also produce omega fatty acids, agri products, glycerine apart from biodiesel, which would be sold in the domestic market.
In its first plant at Nalgonda, the company had invested Rs 26 crore.
The company is also working on a public-private partnership project with Icrisat to educate farmers on biodiesel seed collection and nursery plantations. However, the farmers would be asked to sell the produce to Southern Online Bio.
