Curtain call for $85.1 million bio-ethanol factory in Quang Ngai

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The factory was invested by Central Petroleum Bio-ethanol Joint Stock Company (Central Petroleum Bioethanol JSC), a subsidiary of Vietnam’s state-run oil and gas group PetroVietnam with the total capital of $85.1 million.

Starting operations in February 2012, following 33 months of construction, the factory 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 Binh Son Refining and Petrochemical Company Limited (BSR).

According to Pham Van Vuong, director of Central Petroleum Bio-ethanol JSC, the factory must suspend its operations due to unstable material supplies and high production expenditure.

Vuong added that the oversupply forced the factory stop its operation. Notably, the total consumption of E5 fuel is 2,000 cubic metres per month, equalling 24 per cent of Bio-ethanol Dung Quat’s capacity, while the total capacity of an ethanol factory in the southern province of Dong Nai is 75,000 cubic metres annually.

He shared that as of now, 128 of the more than 200 engineers and workers at the factory have temporarily retired from working without salary, while 38 engineers were relocated to other tasks at Dung Quat oil refinery of PetroVietnam in the province.

With the exception of Bio-ethanol Dung Quat, Petro Vietnam 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 ethanol factory stopped in mid-2012 due to financial problems and Binh Phuoc ethanol factory, 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.

Four other investors poured capital into bio-ethanol factories. These include Dong Xanh Joint Stock Co.’s Dai Tan ethanol factory in the central province of Quang Nam, Tung Lam Company Limited’s Tung Lam ethanol factory in the southern province of Dong Nai, Dai Viet Company's ethanol facility in the Central Highlands province of Dak Nong, and Quang Ngai Agricultural Products and Foodstuff JSC’s Bioethanol Dak To in the Central Highlands province of Kon Tum. As of now, only Tung Lam has continued to operate.