Vietnam: Multi-billion VND ethanol projects back on planning table

Vietnam: Multi-billion VND ethanol projects back on planning table

PetroVietnam, the investor of Bio-Ethanol Dung Quat, Phu Tho and Binh Phuoc
ethanol factories has entered a co-operation with partners to rescue these
three factories, according to newswire Bizlive.

Regarding Bio-Ethanol Dung Quat, according to the initial plan, the investor
Central Petroleum Bio-Ethanol JSC, a PetroVietnam subsidiary, is expected to
restart operation this year. However, to date, Central Petroleum
Bio-Ethanol, Binh Son Refinery and Petrochemical Co., Ltd. (BSR), PV Oil and
several partners have yet to reach a compromise about the plans to restart
the factory.

Notably, the member companies held a working session with Tin Thanh
Industrial Electricity and Steam Co., Ltd. to discuss plans to run the
factory and Tin Thanh conducted a survey of the factory. However, the
parties have yet to reach a compromise over the benefits and the solutions
to treat the wastewater.

Besides, the investor will co-operate with Tung Lam Co., Ltd. to run the
factory. Accordingly, Tung Lam will be in charge of consultancy. However,
BSR and PV Oil have yet to issue a comment on this solution.

Regarding Binh Phuoc factory, PV Oil and Orient Bio Fuels Company, the
investor of the project, built plans to resume the operation of the factory
from January 1, 2018. Simultaneously, PV Oil will also co-operate with Tung
Lam to research solutions to decrease product prices.

Besides, PV Oil signed a contract with Petroleum Securities JSC to build a
divestment plan from Orient Bio Fuels Company and other alternative plans in
case the divestment fails.

Regarding Phu Tho foreign, both domestic and foreign investors are building
plans to resume operations. Besides, PV Oil will enlist a consultancy firm
to calculate the factory's asset value to serve as basis for the divestment.

Starting operations in February 2012 after 33 months of construction,
Bio-Ethanol Dung Quat was expected to produce 100 million litres of ethanol
per year, which was then mixed with A92 gasoline to generate bio-fuel E5.
After one year of non-profit operation, PetroVietnam handed the factory over
to BSR.

However, since being taken over by BSR, it has yet to see positive signs and
as a result, it was closed for defaulting on the VND1.3 trillion ($57.47
million) debt it owed to banks.

PetroVietnam also invested $90 million into building two other bio-ethanol
factories in the northern province of Phu Tho and the southern province of
Binh Phuoc. However, the construction of Phu Tho stopped in mid-2012 due to
financial problems and Binh Phuoc, which started operation in 2009, only had
a trial run, after which it stopped due to a shortage of raw materials,
despite being located near a cassava cultivation area.

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Link to Original Article:
http://english.vietnamnet.vn/fms/business/185581/multi-billion-vnd-ethanol-p
rojects-back-on-planning-table.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com