FIRST In Spec (FIS) plans to invest R1.5 billion in three biodiesel plants that will use surplus vegetable oil over the next four years.
Louis Nyiri, the managing director, said yesterday that two of these would be in South Africa’s Richards Bay while one would be in the Western Cape. The company, only a year old, plans to target the mining, forestry, fisheries, and agricultural industries because of offered rebates and carbon credits.
Although South Africa is supposed to have a 2% blend of biofuels by 2013, private investors have been reluctant to invest money in the industry because the government has refused to create a mandatory market. "Not having a mandatory market is a big issue for us as well. But we could not be bothered with the refineries at the moment because we will not have the capacity in any case,” Nyiri said.
FIS is currently finalizing the funding structure for the first plant, which might be at the Richards Bay port or in the Richards Bay Industrial Development Zone. The plant will be built by Desmet Ballestra, a JV of companies from Belgium and Italy and will take a year to build overseas. Then it will be shipped to South Africa, where it will be constructed by BSC Engineering next year at a costi of about R350 million. This first plant is expected to be in operation by March 2011.
Nyiri said this plant would create 100 direct jobs and 5,000 indirect jobs for area residents.
The other two biodiesel plants would be built from 2012. They would have a capacity of 100 million liters a year each.