Biofuels on the bourse

Elstar Oils, a producer of refined oils that in the coming months will launch production of biofuel components for diesel fuel, plans to issue 438,000 shares - worth about 10 percent of the company's capital.

The funds acquired from the issue will be invested in increasing the company's production capacity and working capital. Elstar wants to invest zł.120 million in 2006-2008. "We plan to get about half of the funds from the issue of our shares," said Elstar's president Stanisław Rosnowski. He added that the rest will be financed from bank loans.

The company wants to double the production capacity of its esters production plant in Malbork, which will cost zł.10 million. The production capacity of the rapeseed processing plant in Czernin is to be increased from 150,000 tonnes to 250,000-300,000 tonnes, costing zł.30 million. "We are also working on having a second rapeseed processing plant - this time in southern Poland," Rosnowski announced. He did not rule out buying the plant.

"We made the decision to undertake further investments because we want to increase the company's growth dynamics and because of the attractiveness of the biofuel market," Rosnowski said. The president explained that EU policy regarding biofuels and renewable energy sources guarantee the creation of a large biofuel market. "The demand for esters might reach 818,000 tonnes in 2010," Rosnowski claims. In 2005 the demand for esters reached the level of 239,000 tonnes.

But Elstar is not abandoning the food industry. "We want to stand firm on both feet," Rosnowski said, adding that the food industry also takes part in the biofuel production chain, as rapeseed oil is used to produce esters used as biofuel components.