IJM Plantations to launch biodiesel module

SUBANG: IJM Plantations Bhd expects to launch its first 30,000-tonne biodiesel module by the second half of next year, said chief executive officer and managing director Velayuthan Tan.  

"Our Sandakan plant is based on a modular concept with a combined capacity of 90,000 tonnes. There are three modules with 30,000-tonne capacity each," he said after the company AGM and EGM yesterday.  

He said the group was likely to go into full-scale operations by end-2008 once it was familiar with the processes and the biodiesel market.  

The biodiesel subsidiary, IJM Biofuel Sdn Bhd is a 60:40 joint venture between IJM Plantations and US company CTI Biofuels Malaysia LLC.  

Velayuthan Tan

Tan said its American partner had helped in securing demand for the first biodiesel production, which would mainly be exported to Europe and the US.  

Contribution from the new operations was likely to flow in during fiscal year ending March 31, 2009, he added.  

Meanwhile, IJM Plantations has started a nursery on 4,000ha in north-east Kalimantan. It owns about 32,000ha in that area.  

"We hope to start first planting around middle of next year and the rest over the next five to six years," Tan said, adding that the quality of soil should produce good yields.  

The company intends to buy another 8,000ha close to its Kalimantan plantation.  

"Ideally we're looking at (a total) 40,000ha. We hope to secure the rest by year-end," Tan said, adding that it had allocated an initial investment of RM250mil for its Indonesian venture.  

IJM Plantations owns about 30,000ha in Sabah, of which some 25,000ha have been planted. According to its 2007 annual report, close to 47% are prime trees, 42% young and the balance immature palms.  

Tan said based on the age profile, production of fresh fruit bunches was anticipated to chart double-digit growth next year.  

The company is expected to release its first quarter results this week.