The 120,000 tonnes per year facility will be built in the country town of Deniliquin and will use the transesterification process, which converts natural oils such as tallow and vegetable oil into biodiesel.

MPI said biofuels was a future high growth sector, which led the company to forming an in-house biofuels group.

MPI Group chief executive Jim Ferretti said the company had positioned itself as a major provider of complete engineering solutions to the industry, both in Australia and Asia.

It expects to deliver in excess of $200 million in biofuel projects over the next few years.

Australia currently produces 400,000 tonnes of biofuels per annum.