July 30, 2007 - (Equitybulls.com) - Williamson Magors & Company Ltd and D1 Oils of U.K. have formed a 50:50 joint venture Company named D1 Williamson Magor Bio Fuel Ltd incorporated on July 29, 2006, for production of Bio-diesel in the east and north eastern part of India.
Jatropha Curcus is one of the crops, which has been considered good for producing oil from seeds and this oil after refinement is converted into Bio-diesel.
D1 Williamson Magor Bio-fuel Ltd has been promoting Jatropha plantation amongst the farmers on their privately owned waste land under contract farming arrangements for use of Jatropha oil seeds for manufacture of bio diesel. The Company has undertaken plantation on about 8,000 Hect of land during 2006 and has plan. to undertake 50,000 Hect each year from. 2007 onwards. The plantation has already been completed on 29,000 Hect during 2007. The Company plans to undertake plantation of total 2,000,000 Hectors by 2011-12.
The investment by the Company involves creation of manufacturing facilities of crude oil and refinery, working capital arrangements and initial support towards the plantation by the farmers. The total investment required for development of production facilities of upto 2009 - 10, year of commencement of commercial production, is approximately Rs 300 Crores.
The long term IRR on production and manufacture of bio diesel is estimated at 20% and is likely to remain steady over future period.
The majority of Jatropha plantations are planned in the Northeast India, where the Company has got its substantial presence. The Company will be able to add value through its expertise of managing plantation of large size. To get the benefit of the large upside expected in the investments into Jatropha plantations, the Company plans to invest, through internal generation, upto Rs 50 Crores in next two years subject to necessary approvals.
D1 Oils of UK, the Joint Venture Partner, has also entered into an agreement with British Petroleum to invest in Jatropha plantation / creation of bio diesel manufacturing facilities and through the association of British Petroleum, Dl Williamson Magor Bio Fuel Ltd will be able to access the world market for its product.
