Alta Vista Securities announces biodiesel joint venture

By Alta Vista Securities | December 20, 2011

Alta Vista Securities has announced the formation of a joint venture for biofuel production in the Philippines. The project will be engaged in jatropha production and a biodiesel processing venture in the Sierra Madre Mountain Range of the Philippines. The target aggregate plantation area is 110,000 hectares (271,816 acres) divided into clusters of 10,000 hectares (24,711 acres) per cluster. The total biodiesel annual production at peak capacity is 18 million liters (4.8 million gallons) per cluster or 198 million liters (52.3 million gallons) for the aggregate area. Through contract production arrangement with farmers who are farming lands in marginally productive areas in the Sierra Madre Mountain part of the provinces of Cagayan, Isabela, Nueva Vizcaya, Qurino, Nueva Ecija, and Quezon on Luzon Island in the Philippines, jatropha plantation will be organized and placed under the integrated production and processing arrangement.

The biodiesel processing facilities will be centralized for every 10,000 hectares. The jatropha seeds harvested by farmers will be collected from the farmer cooperators and will be processed. The biodiesel will make use of the most modern processing technology that is very cost efficient. The biodiesel then will be sold to gas distributors. The residue in oil extraction will be also converted into synthetic gas will then be converted into alcohol fuel blend and LPG like materials with known commercial application in the Philippines. On this basis, more than 50 percent of the jatropha seed by weight will be converted into biofuels. Decentralized plants are preferred over a large, single plant for a number of reasons, among which is the immediate establishment of a plant to attract farmers to cooperate, the present available technology on biodiesel processing that ensures distinct economical advantages of a decentralized plant, and for a more sustained operations in the event of major plant breakdown.

"Positive net income will start to be realized by the third year of the project,” said Steve Muehler, president of Alta Vista Securities. “By the seventh year of the project, net income after tax should be in the $131 million range, which will increase to $154 million range starting the 10th year.”

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