The Lao State Fuel Company, one of the largest fuel importers and distributors in Laos, may join with Japanese and South Korean companies to produce bio-diesel in Laos.
Company Manager, Mr Thong Thammarath, said on Tuesday that the two foreign companies had expressed interest in collaborating with the company to grow jatropha trees and establish a bio-diesel processing plant in Laos.
“They've held discussions with us about the idea but no actual agreements have been signed,” he said.
The Netherlands Development Agency (SNV) has also expressed interest in working with the company to develop bio-diesel, he said.
Mr Thong said Laos is a good location to grow jatropha, which can be used to produce bio-diesel, due to the fertile land and low population density.
It is government policy to promote bio-diesel production to stabilise energy supplies and possibly export this form of fuel as the price of fossil fuels increases.
However there are no clear details about investing in bio-diesel production, including land concessions and tax incentives.
Mr Thong said many investors are waiting for the price of fossil fuels to increase before investing in bio-diesel production. “The price of fossil fuels is still low and it's impossible to produce bio-diesel at a price that is competitive.”
He said oil prices need to be over US$90 or US$100 per barrel to make the production of bio-diesel profitable.
Global oil prices reached US$140 per barrel in July 2008 before dropping to as low as US$40 per barrel at the end of that year due to the world economic recession.
The price of oil is now around US$75 per barrel as world economies slowly begin to emerge from the slowdown.
Mr Thong said the Lao State Fuel Company is currently growing 36 hectares of jatropha as part of a pilot project to produce bio-diesel for use in the company's fuel distribution vehicles.
He said the company is investigating a different variety of jatropha trees which can produce higher yields.
The Lao State Fuel Company is a 100 percent state-owned enterprise belonging to the Ministry of Commerce and Industry. The company has more than 100 employees, a transportation fleet, warehouses and more than 150 petrol stations around the country. The company sold 229 million litres of fuel last year.
Laos have alot of land and most of which is undeveloped. I'm sure they can squeeze in more some hectors here and there to make room for energy producing sectors. Energy independence would definitely help a country create a more stable economy.
Food shortes is not due to limited land and more related to economics, education, irrigation systems and logistics.
