Dublin, Ireland
July 2nd, 2008
Integrated Biodiesel Industries, Ltd (IBI) announced today a 10% acquisition of Irish jatropha developer South Cone Agriculture, Ltd (SCA) for an undisclosed amount. The agreement with SCA includes preference in its supply of jatropha oil at prices below soybean oil, giving IBI a competitive advantage in its biodiesel production costs.
Jatropha is a small tree native to Central America which delivers seeds with high oil content suitable for low cost biodiesel production. It will grow on degraded arid land and produce for 30 years without replanting. Considered the new promise in biodiesel feedstock, jatropha oil will not compete with edible oil production and is being developed by several biofuel companies around the world.
This deal is strategically important for South Cone as it is launching an effort to raise capital in Europe through private placement of stock with selected investors. Funds will be used to deploy commercial plantations in Angola, Brazil and Argentina, where SCA is acquiring and leasing land. "The agreement with IBI advances our development process" says Ian Cavanaugh, South Cone´s president.
South Cone is focused on jatropha plantations but also develops short rotation crops such as sunflower, crambe and castor to secure ongoing revenue stream. "South Cone will post profits since year one as opposed to other developers which will burn money for 3 to 4 years" adds Cavanaugh, eyeing the initial harvests by late 2008.
"SCA is the 21st century's oil exploration company, it's really the vision of modern energy.", says Marcelo Lopes, IBI's Chief Executive Officer. "We'd better stay close to them", he adds. IBI will reach a production capacity of 135,000 metric tons per year in 12 months in its plants in Argentina and require alternative feedstocks to reduce its dependence on soybean oil. The company will also establish modular plants near SCA's plantation sites in other countries.
Integrated Biodiesel Industries, Ltd (IBI) is a biodiesel company with activities in Brazil and Argentina. The company is focused on downstream operations (production and distribution) and developing an international base of end consumers such as truck fleet operators, railway companies and oil-fueled power plants in the USA, its primary market.
South Cone Agriculture, Ltd (SCA) is an energy feedstock supplier created to serve the booming biofuels industry, whose demand is driven by growth of more than 25% a year. The company's focus is on dedicated plantations of industrial oil seeds, mainly jatropha, sunflower, crambe and castor. SCA believes that companies relying on fossil fuels will be increasingly vulnerable to supply instability and environmental policies.
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