Chemrez to supply Shell’s biodiesel needs this year

Chemrez Technologies Inc., the country’s top oleochemicals and resins producer, said yesterday it will supply the entire coco-biodiesel requirements of Pilipinas Shell Petroleum Corp. until the end of the year.

ChemrezTech currently supplies bulk of the coco-biodiesel requirements of major oil companies.

Jun Lao, ChemrezTech chief operating officer, said the major oil companies have awarded ChemrezTech orders of about 4.5 million liters in July, translating to revenues of about P230 million a month.

“We are honored that these giant oil companies have entrusted us with their coco-biodiesel requirements. This is a vote of confidence for the high quality and reliability of ChemrezTech’s coco-biodiesel supply,” Lao said.

“Our capacity utilization is pretty good—at about 80 percent of the plant’s capacity because of these major supply contracts,” he added.

Lao said he is confident the company will be able to sustain or even exceed its share of the local coco-biodiesel market next year due to the superior quality of ChemrezTech’s premium coco-biodiesel.

He said quality is never an issue with ChemrezTech and its IMS program also gives oil companies better peace of mind as it assures them the coco-biodiesel produced by ChemrezTech’s plant meets or even exceeds international standards.

“The performances of different suppliers have been compared and the result is clear by now. We have the upper hand and the performance to prove it. Supply reliability is our strong suit,” Lao said.

Lao said major oil firms are likely to bid out their entire year’s requirement to a single supplier in 2008.

Aside from oleochemicals such as coco-biodiesel, ChemrezTech also manufactures and sells other products such as powder coatings, resins and other specialty chemicals.

Chemreztech expects its biodiesel business to account for half of its sales and over two-thirds of its profits this year. 

The company currently sells its premium coco-biodiesel BioActiv in the domestic market through a nationwide network of distributors in drums and bottles, and through local oil firms which sell them as bottled or pre-blended additive to regular petro-diesel.

The domestic demand for coco-biodiesel is estimated at 70 million liters a year based on the seven billion liters of petrodiesel consumed by the country in 2005. The figure is seen to more than double to 160 million liters of biodiesel with the passage of the Biofuels Act.

Chemrez is eyeing a net income of  P536.67 million this year on revenues of  P4.72 billion. The increase in sales and earnings will be due to the consolidation of earnings from powder coating, resins and oleochemicals as well as the full operation of the new Chemrez biodiesel plant.