China Agro-Technology (CAT) has signed a Memorandum of Understanding with the Beihai city government to set up a biodiesel refinery plant in Beihai, Guangxi Province, China.
CAT expects to invest up to $200 million over the next four years to operate a plant that, at full capacity, can produce 2 million metric tons per annum. CAT has a target completion timeline for the factory of six months from the date of commencement.
Using present market prices, the net profit for every metric ton of oil would be $350. Therefore, beginning in the 1st Quarter of 2009, CAT estimates that it can produce a minimum of 80,000 to 100,000 metric tons, yielding a net profit of $30−40 million assuming current production capabilities.
CAT Founder & Chairman, Dr Harry He said, biodiesel has the highest demand of any commodity in China. To meet the requirement, China needs 12,400,000 tons of biodiesel in 2008. However in 2007, the supply in China was less than 1 million tons. Therefore, the product from this biodiesel plant will be a very important part of China's effort to meet the requirement.