Chinese plantations purchased for jatropha

By Luke Geiver | October 25, 2010
Posted Nov. 17, 2010

Another jatropha plantation development is in the works. This time, AMG Bioenergy Resources, a startup company focused on renewable energy, has signed a letter of intent with China Zhejiang Biodiesel Co., to acquire a eucalyptus and jatropha plantation in southern China. Both existing plantations reside in the same area and will eventually be turned from a 145 hectare eucalyptus and 330 hectare jatrohpa set of plantations to one large plantation around 400 hectares. The company "is working on developing the plantation over the next two years," said Lee Shoong Lim of AMG's Singapore location. As for securing any feedstock agreements at this point, Lim said it is not an issue due to global demand for nonpalm oil-based biodiesel.

The main obstacles to developing a jatropha plantation in southern China, according to Lim, are mainly acquiring the low-cost land that is suitable for jatropha cultivation, as well as training and educating the local workforce to develop and maintain the plantations. Lim believes these challenges can be met based on AMG's experience in running a test plantation in southern China already. As for cultivating jatropha, "AMG believes that jatropha provides the ideal source of raw materials for biofuel," Lim said. "It can be easily grown on a large scale and on nonarable land," adding, "Southern China provides a large market, ideal climate plus a low-cost source of trained plantation workers that are essential to the operations." The cost of developing and operating the same plantation is low, relative to many other countries, Lim also said, while productivity of the plantations and its workers like the one in southern China are relatively higher than the rest of the world.

AMG plans to finance the plantation's acquisition via private placement of shares of the company, and also expects to receive the plantations by the end of the year. The two plantations are the first to be operated by AMG.
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