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Prime Minister Viktor Zubkov: "There will be 30 new bioethanol plants in Russia"

Prime Minister Viktor Zubkov 30 new plants producing biofuel are going to be set up in Russia. As Viktor Zubkov, Russian Prime Minister, reported Wednesday at an international conference on forestry complex development, the existing plants for the production of ethanol will be reconstructed and 30 new ones are going to be built. The head of the government also added that this year the government is planning to adopt a program on the development of biofuel production which presupposes the rise in ethanol production up to 2 mln tons a year. "We are going to devote much effort to this area,” the head of the government said, reminding that the Cabinet had already adopted a program on the development of biofuel production. There are also plans to build about 30 new plants for biofuel production in Russia. The reconstruction of the old ones is also on the agenda, Prime Minister said.

Meanwhile, as “Vedomosti” informs, Alexander Ryazanov, ex-vice chairman of the executive board of Gazprom, has come up with an idea of building a bioethanol plant. The construction site has been chosen and the technical and economic assessment of the project has already been prepared, said Marat Ishmiyarov, Metasynthes CEO (head of the project). The plant is going to be built in the Tambov Region. According to plans, the plant will be reaching its estimated annual output of 250 thousands tons of ethanol by 2011. The investment in the construction will amount to 220 mln Euro, 85% of which the company is planning to borrow from the Bank for Development and Foreign Economic Affairs.

The destination of bioethanol export is going to be Europe and the USA. Taking transportation costs into account, the annual receipt from sales is planned to reach 202 mln Euro, while profitability will be about 12%. If bioethanol is supplied to the domestic market, the profitability may be 4-10% higher, forecasts he. However, this will depend on prices on raw materials, primarily on prices on wheat.

The thing is that at the end of November last year Interfax reported that a bioethanol plant in the Tambov Region was going to be constructed by the Russian Holding Company LLC. And Alexander Ryazanov, company’s head, was discussing the project with Sergey Naryshkin, Vice Prime Minister of the Russian Federation.

Then the project cost measured as 203.8 mln Euro with a pay-of period of 5 years. It was also reported that the party responsible for the realization of the project would be Biotechnologia CJSC – a subsidiary structure of the Russian Holding Company.

The construction of the plant that will process feed grain and molasses (waste products of beet sugar manufacture) was scheduled for the summer of 2008.

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