German bioenergy company Verbio (VBKG.DE: Quote, Profile, Research) has restarted its largest bioethanol plant and changed feedstock to sugar from grains, the company's CEO said on Monday.
The plant in Schwedt in east Germany produces about 200,000 tonnes of bioethanol annually but was taken out of operation in autumn last year because of high prices for the 600,000 tonnes of grain it consumes each year.
"We have now changed the production process and use sugar," CEO Claus Sauter said. "Sugar has not increased its price in the same proportion as grain."
Sugar is about 30 percent cheaper than grain as a feedstock, he said.
"We now process sugar and sugar products, not grain. It would, as before, still not be possible to produce economically using grain."
The company also has a second bioethanol plant in Zoerbig in east Germany producing about 100,000 tonnes of bioethanol annually. It also converted to sugar feedstock from grain at the end of 2007 and continued output while Schwedt was off-stream.
"Initially there was insufficient sugar available to feed Schwedt as well but we have now agreed supply contracts until the end of this year and we have sufficient volumes," Sauter said.
The two plants will consume over 100,000 tonnes of sugar and sugar products annually such as sugar and sugar syrups. They previously together consumed around 900,000 tonnes of wheat.
This is all European Union sugar," he said. "The sugar quotas have been cut and the 2007 sugar beet harvest was good and produced surpluses which are now processing.
Under the EU's programme to reform its highly-subsidised sugar market, sugar production quotas for farmers have been cut substantially. Farmers who produce more sugar than their quota may sell this for non-food industrial use, including bioethanol.
Germany produced about 600,000 tonnes more sugar than its quota last season.
MOVING TO FULL CAPACITY
The Schwedt plant was currently producing at about 70 percent of capacity but should move to 100 percent this month, Sauter said. Zoerbig was already at 100 percent output.
Asked if the reduction in costs and increased output would improve the company's results, he said: "It's difficult to say as we do not know how bioethanol prices will develop in the second half of this year but it should be regarded positively."
On March 19, the company posted a 2007 loss before interest and taxes (EBIT) of 254.5 million euros, against an EBIT profit of 44.1 million euros in 2006. The result was largely due to a 264.2 million euros loss from bioethanol.
German demand for bioethanol remained weak, he said. Cheap imports, especially from Brazil continued to cover much demand."
This is all European Union sugar," he said. "The sugar quotas have been cut and the 2007 sugar beet harvest was good and produced surpluses which are now processing.
Under the EU's programme to reform its highly-subsidised sugar market, sugar production quotas for farmers have been cut substantially. Farmers who produce more sugar than their quota may sell this for non-food industrial use, including bioethanol.
Germany produced about 600,000 tonnes more sugar than its quota last season.
MOVING TO FULL CAPACITY
The Schwedt plant was currently producing at about 70 percent of capacity but should move to 100 percent this month, Sauter said. Zoerbig was already at 100 percent output.
Asked if the reduction in costs and increased output would improve the company's results, he said: "It's difficult to say as we do not know how bioethanol prices will develop in the second half of this year but it should be regarded positively."
On March 19, the company posted a 2007 loss before interest and taxes (EBIT) of 254.5 million euros, against an EBIT profit of 44.1 million euros in 2006. The result was largely due to a 264.2 million euros loss from bioethanol.
German demand for bioethanol remained weak, he said. Cheap imports, especially from Brazil continued to cover much demand."
