“The planning permit is a significant step forward for the company,” said Indcor chairman and CEO Peter Anderton. “Our Swan Hill ethanol project has a stage 1 production capacity of 45 million litres of ethanol, rising to 90 million litres per annum within five years. The facility will be Australia’s first multi-grain fuel-ethanol plant.
The key strategic advantage of this facility is the production of a high value co-product, wet distillers’ grain, which will provide substantial and additional revenue streams to offset production costs. Subject to project finance, the Swan Hill ethanol project will commence construction in early 2005 and production in early 2006.”
The planning permit forms part of the definitive feasibility study for the Victorian project. The company said the definitive feasibility study is nearing completion, and will be the key document for securing project finance.
On May 24 this year, Indcor negotiated an investment from Mitsui & Co (Australia) Ltd of $A500,000 to assist with completion of the Definitive Feasibility Study. The investment provided Mitsui with the opportunity to take an equity position in the project subject to a favourable feasibility outcome.
“In the next few weeks we will sit down with Mitsui to finalise the joint venture agreement for the development and operations of the project. This, in partnership with our major shareholder Multiplex, provides us with confidence in rolling out our ethanol strategy,” Anderton confirmed.
While the perception of fuel-ethanol has suffered in Australia, global demand for fuel-ethanol is booming on the back of soaring oil prices driven by environmental costs and increasing instability in the world’s major oil producing regions.
“In addition to the Swan Hill ethanol project, we are working on securing a US-based project, which will give Indcor substantial leverage in a developed and rapidly growing ethanol market. Concerns about energy security, environmental issues with synthetic fuel additives such as MTBE and tighter fuel and vehicle emissions standards are major drivers for increase in fuel-grade ethanol markets globally.
It is only a matter of time before these pressures are felt in Australia. Our first-mover advantage will give us an edge over competing projects and a foothold in the local industry,” Anderton said.