Biofuels on schedule with UK plant

Biofuels Corporation Plc, a UK maker of diesel fuel made from vegetable oil, is on schedule with its new Teesside plant, where production is at 65% of capacity, Edison Investment Research said. The progress at the plant in northeast England may halt a slide in the company's share price, said Nigel Harrison, an analyst at the London-based investment research company in a report yesterday. Edison predicts the UK market for biodiesel, which is made from vegetable oil, will triple by 2010 to 10 million tons a year from 3.2 million tons. Interest in biodiesel and other so-called biofuels is growing after oil prices soared. Crude oil prices have gained 22% this year, and traded at a record $78.40 a barrel in New York last month. Biofuels Corporation, which supplies 10% of the European market for biodiesel, last week reported a loss for the year ending March 31 of £ 72.9 million ($135 million), from £ 10 million a year earlier. Shares of Biofuels rose 3.5 pence yesterday, or 3.1%, to close at 115.5 pence in London. They have dropped 33% in the past year, valuing the company at £ 57.2 million. Two of the five analysts tracked by Bloomberg have „sell” ratings on the shares. One has a „hold” rating and one a „sell.” Morgan Stanley initiated coverage in July 28 with an „equal weight” rating. „A financial restructuring has been foreshadowed, while management is already looking to raise capacity with a further major investment,” Harrison said. The Teesside plant is expected to produce 250,000 tons a year at full capacity. (Bloomberg)