40 Jobs Go As Biodiesel Refinery Mothballed

By Peter McCusker

ABIODIESEL plant on Teesside is closing with the loss of 40 jobs and will be mothballed until a buyer is found to operate it or it is broken up.

D1 Oils says its processing plants in Middlesbrough and Merseyside will close and it will now focus on growing the biodiesel crop jatropha.

The company remains bullish about its prospects despite its stock price being in freefall from 284p last year to 22.25p last night.

It says last month’s share issue, which raised pounds 14.9m, will provide funds to trade well in to 2009 and it plans to increase fivefold its jatropha crop plantations to 2.5 million acres. It had been growing the crop to fuel its biodiesel plants.

At yesterday’s agm D1 chairman Lord Oxburgh of Liverpool said: "At the beginning of the year the company had operations in refining, trading, planting and plant science.

"Given the present difficulties facing biodiesel refining in Europe due to subsidised US biodiesel imports, the board took the strategic decision to focus the business exclusively on planting and plant science.

"We believe alternative biofuel feedstocks, of which Jatropha curcas is one of he most promising, offer significant opportunities for growth in the biofuels sector." D1 head of corporate communications Graham Prince said consultation with the 87 production staff, 40 in Middlesbrough, had ended and the plants would close.

"The plants will be mothballed and we will be looking at an number of options for disposal.

The plants can be dismantled, transported and constructed elsewhere, or could be operated by another biofuel manufacturer."

D1 has planted 500,000 acres of jatropha trees, which live up to 40 years and can be harvested at least once a year, in Africa and India.

The company has a joint venture with BP called D1-BP Fuel Crops Ltd. The first oil will come on stream this year, although the small quantities mean it will be used where it is produced.

Full scale production will not happen until 2010/2011 and the company expects to be able to produce two million tonnes a year.

Also at the agm it was announced that group finance director Chris Tawney would be leaving. He will be replaced by group strategy director Ben Good. Group plant science director Henk Joos has also been appointed to the board.

In the year to last December 31, the AIM-listed company lost pounds 46.1m. New Energy Finance analyst Roberto Rodriguez said D1′s refocus had been expected. He said: "All European producers have had a bad time because the biodiesel coming from the States and South America is cheaper than they can produce. ‘GOING PLACES’

"D1 Oils founder Karl Watkin, who still has a 3% stake in the company, yesterday welcomed the company’s announcement.

"I am impressed with the very positive statement. This is a business which is going places. I am just surprised the institutions have not supported it. The company is seriously undervalued."

D1 Oils share price has plummeted from 284p last year to 22.25p last night. Mr Watkin, who resigned as non-executive director last March, says he has lost pounds 12m in the share price freefall.

The serial entrepreneur, who says he is embarking on a new venture, last week quit the board of China Goldmines, which he helped found. He said that this year he had lost EUR50m on the stock market, criticising traders for not taking a long-term view.

(c) 2008 The Journal – Newcastle-upon-Tyne. Provided by ProQuest Information and Learning. All rights Reserved.