Southern Online eyes Rs 75-cr from biodiesel exports

Southern Online Biotechnologies Limited, a Hyderabad-based Internet services provider (ISP) and biodiesel manufacturer, is tapping the biodiesel export market and is expecting to garner Rs 75 crore forex revenues in the current financial year.

“We have already identified prospective buyers abroad and have recently closed two deals in Europe and Australia. We will start supplies from our Visakhapatnam plant from next month,” N Satish Kumar, managing director of Southern Online, told Business Standard.

Southern Online has set up its second biodiesel plant at the APIIC special economic zone in Visakhapatnam with an installed capacity of 75,000 tonne a year. The company intends to sell 25,000 tonne of the plant’s production this year. Set up with an investment of Rs 90 crore, with Rs 36 crore as equity component and the remaining through a term loan, the plant will generate revenues of Rs 100 crore this year, Kumar said.

Kumar said the company’s first biodiesel plant at Samsthan Narayanpur in Nalgonda district, with an annual capacity of 10,000 tonne, was currently functioning on 90 per cent capacity.

“The plant is catering to clients like the Andhra Pradesh State Road Transport Corporation, Indian Railways, Idea Cellular, Kirloskar Oil Engines and Tata Teleservices. At present, the utilisation capacity of our existing clients is much higher than our production,” he said, adding the Nalgonda plant was expected to bring in Rs 34 crore revenues this fiscal.

Southern Online reported a net profit of Rs 1.52 crore on revenues of Rs 38.32 crore (Rs 5.56 crore from ISP and Rs 32.76 crore from Nalgonda plant) in the fiscal ending March 2010. It expects its ISP business to contribute Rs 6 crore this year.

Stating that the usage of diesel in India is currently pegged at 150 million litre per day, the sixth largest diesel consumer in the world, he said the usage was growing at 6.2 per cent annually.

“Based on this data, the requirement of biodiesel is going to be in the range of 8.5 to 33.5 million litre per day subject to the biodiesel blend of 5 per cent to 20 per cent per litre,” he said.