Monday, December 17, 2007 Oil firm eyes GenSan for ethanol plant
INDEPENDENT oil company Eastern Petroleum Corp. is planning to construct an ethanol plant in this city worth P1.8 billion in partnership with Chinese firm Guanxi State Farm, an official said.
Fernando Martinez, Eastern Petroleum chair, said effort to reach the objective is already gaining ground through the establishment of cassava farms under the Eastern Renewable-Fuels Corp within Central Mindanao region.
He told reporters recently Eastern Renewables has so far consolidated 2,000 hectares, with half already planted with cassava in various phases of cultivation.
Martinez said they are targeting to put up 12,000 hectares of cassava farms in this city dubbed the "Tuna Capital of the Philippines" and the provinces of South Cotabato, Sultan Kudarat and Sarangani to provide the requirement of the planned ethanol plant.
The target of 12,000 hectares is scheduled to be attained by the end of 2009, after which the construction of the ethanol plant will immediately follow.
The company prefers to locate its ethanol plant in the city due to its strategic location towards available agricultural lands suited for cassava cultivation, Martinez said.
Under Republic Act 9637 or the Biofuels Act of 2006, oil companies are mandated to blend 5 percent ethanol in gasoline products two years after the signing, or starting next year.
Four years after the effectivity of the law, the blend will be increased to 10 percent.
At a mandatory 5 percent blend, Martinez said ethanol demand in the country would run to around 200 million to 300 million liters yearly starting next year and 600 million liters by 2010.
He projected that as many as four to five plants are needed to be constructed to meet the 300 million liters estimated demand.
"The construction of the ethanol plant [in General Santos] is almost certain because we have already mobilized the ground works. We started planting the cassava in July," he said, adding that Eastern Petroleum has signed a memorandum of agreement with Guanxi to set up the ethanol plant.
Guanxi, according to Martinez is a Chinese-government owned corporation "twice as bigger as the San Miguel Corp. in the Philippines" with nearly a hundred subsidiaries.
A 60-40 investment-sharing scheme would be adopted with Guanxi, with Eastern Petroleum taking on the majority but willing to tender 20 percent of its share to an interested Filipino-Chinese group, the executive said.
Citing data from the Department of Agriculture, Martinez said there are presently three million hectares of available lands in the country that can be utilized as cassava plantations.
These are either logged over areas or lands under the Comprehensive Agrarian Reform Program that were not fully utilized by the beneficiaries, he said.
Across the nation, some 200,000 hectares are intermittently planted to cassava but mainly for feeds processing.
President Gloria Macapagal Arroyo signed the biofuels act as a strategy towards "energy independence" from imported oil, increase economic activity and boost employment in the agriculture sector and contribute to improving air quality by rescuing toxic vehicular emissions in the air.
Martinez urged farmers in the region to enter into a contract growing agreement with the company to plant the crop which would be bought at P1.20 per kilo at a standing price, meaning the company would take charge of the harvesting cost.
A hectare could yield about 30 tons or P36,000 in one production cycle of about 10 months, he said.
The company is also open for consolidators, joint venture and leasehold agreement with individuals, corporations or cooperatives.
