Itochu to divest interest in USD-80m Vietnam ethanol plant
Nov 5, 2012 - Japanese trading firm Itochu Corp (TYO:8001) wants to dispose of its 49% stake in an USD-80-million (EUR 62m) ethanol plant in Vietnam as a result of weak sales, Vietnamese media reported today.
Oriment Bio Fuels Co, Itochu's joint venture with Vietnamese firms Licogi 16 and PV Oil -- an affiliate of Vietnam National Oil and Gas Group (PetroVietnam), has built the ethanol plant which has the capacity to produce 100 million litres (26 million gallons) of green fuel from cassava per year. PV Oil owns a 29% stake, while Licogi 16 has 22% in the joint company.
Vietnam Investment Review (VIR) quoted today PetroVietnam's chairman Phung Dinh Thuc as saying that the factory could not sell its products due to the lack of regulations on the use of ethanol gasoline and related products, so the Japanese firm had decided to divest its stake. Itochu has been the only foreign investor in Vietnamese ethanol plant by now, according to the report.
PetroVietnam has invested in three ethanol factories with combined capacity of 300,000 cubic metres (10.59 million cu ft) a year, with two of the factories in operation since 2012 but with unstable output due to unstable sales. PV Oil has sold 750 cu m of ethanol in the first nine months of 2012, VIR added.