Publicly-listed Chemrez Technologies Inc. expects its earnings this year to improve significantly with the implementation of the Biofuels Act this month, a ranking company official said.
Chemrez chief operating officer Dean Lao Jr. said for the past months, the company’s sales have already been on an upward trend.
“Since the law’s mandate, sales have been OK. Our first quarter earnings is already equivalent to 70 percent of our total 2006 profits. That’s because of all our other businesses except biodiesel and that’s before the mandate. We started shipping out in mid-April,” he said.
”The remaining quarters are likely to be much better because that’s when the biodiesel business comes in. The second quarter onwards should be much better. Half of our profits this year is likely to come from biodiesel,” he said.
Chemrez is set to supply a big chunk of the coco methyl ester (CME) requirement of oil companies in the second quarter with the start of the implementation of the Biofuels Act.
Chevron Philippines Inc. and Total Philippines Corp., two of the country’s largest oil importers, will source 100 percent of their CME requirement from Chemrez.
Semi-government Petron Corp., the largest oil refiner in the country, will also procure two-thirds of its requirement to comply with the Biofuels Act from Chemrez.
The Philippines will need some 6.5 million liters a month of CME. Of this requirement, Petron accounts for 2.03 million liters; Pilipinas Shell Petroleum Corp., 1.97 million liters; Chevron, one million liters; and Total Philippines, 1.5 million liters.
Lao said they may also consider expanding their capacity if there is a need for it.
“Our plant that is currently running is good for 50,000 tons. We don’t have specific plans for expansion. But when the landscape changes with the implementation of the two percent blend (B2), there will be an overwhelming reason for expansion,” he said.
He said they are also getting ready for the possible three percent blend if need arises.
“The existing capacity of accredited producers have close to three percent (B3) capability already. So as of now, there is no shortage of capacity locally; there is no real justification for us to go into a new plant,” he said.