Biofuel firm Nandan targets 25 percent sales rise
LONDON (Reuters) - India-based biofuel producer Nandan Cleantec expects to grow sales by at least 25 percent every year till 2014-15, on the back of strong demand for its high yielding variety of oilseeds, a top executive said.
Nandan develops hybrid varieties of Jatropha, an oilseed plant with a high oil yield and an ability to grow on marginal land. Trading in the company's stock started in London on Wednesday. Its shares were placed at 60 pence apiece, raising 16.1 million pounds and valuing the company at 166.1 million.
The company has a 275,000 metric tonne per annum biofuel processing plant, as well as a Jatropha feedstock plantation base of about 51,000 hectares. It expects to use proceeds from the share issue to further develop its Jatropha supply.
Executive chairman Prasad Moturi says the company's in-house plant could process yields from up to 125,000-150,000 hectares of land, helping grow group sales by 25-30 percent annually.
"We should be doing close to $400 million in revenue in three years time," he said, if the company processes its yield target.
Moturi said Nandan has the processing facilities to handle all the Jatropha it procures up to 2014-15, at which point it would reach capacity and the group would build another plant.
Moturi said the company, which generated $100 million in revenues last year, should touch $200 million in sales by 2012.
While Jatropha is an attractive crop, some experts say its commercial promise is overstated as it needs fertilizer to thrive and its harvesting and processing are energy-intensive.
Moturi said Nandan countered that by developing a hybrid variety that has improved yields. "There has been at least 150 to 200 percent increase in yields," he said.
(Editing by Neil Maidment)