Cash-strapped ethanol plant looks for help

photo source dantri

A US’ firm which has been cooperating with Japan’s leading bike and auto-maker Honda and wanted to buy Dong Xanh’s products, and domestic foodstuff firm Foodinco are now in negotiations to buy a 75 per cent stake in Dong Xanh.

Dong Xanh chairman Ly Quang Thai expected to resume his firm’s Dai Tan ethanol facility in central Quang Nam province in September this year as the latest time.

Dai Tan had to shut down its operations in June 2012 because it could not sell all of its products and then suffered financial troubles.

The biofuel facility with the initial registered investment capital of $30 million has the designed capacity to produce 100,000 tonnes of ethanol per year. The 16-hectare facility employed 300 local workers.

Dong Xanh was reported to be in debt to Techcombank, BIDV and local farmers, but Thai declined to unveil the figure. “We are committed to pay back all bank loans in seven years since our facility resumes operations,” he said.

Ethanol fuel is most often used as a motor fuel, mainly as a biofuel additive for gasoline. It is known as an environmental friend fuel which makes engines run more smoothly, increases engine power, decreases toxic gas emissions and helps users save money.

Under the prime ministerial Decision No53/2012/QD-TTg on the road map for using biofuel released last year, E5 gasoline must be used in seven largest cities and provinces of Hanoi, Haiphong, Danang, Quang Ngai, Ho Chi Minh City, Ba Ria-Vung Tau and Can Tho from January 1, 2014, and in all other cities and provinces nationwide from January 1, 2015. Similarly, E10 gasoline must be used in the seven mentioned cities and provinces from January 1, 2016 and nationwide from January 1, 2017.