Magyar Bioenergetikai Zrt, a Hungarian energy company, said it will spend Ft 92 billion to build five ethanol plants in Hungary by 2010 to satisfy increasing demand for biofuels. Construction will probably start next year, the closely held company, also known as Mabio, said in an e-mail today. The factories will use 1.75 million tons of corn annually to make a combined 600 million liters of ethanol a year. They will employ 2,000 people after they reach full capacity, Mabio said.
Mabio, based in Kecskemét, central Hungary, has started technical planning and licensing of the plants and spent about Ft 1 billion on buying building plots for the units, the company said. It signed agreements with corn suppliers and has secured contracts to sell ethanol in the first five years of the factories' operation, it said, without naming customers.
European and U.S. companies have been building ethanol factories in Hungary as the European Union offers biofuel producers incentives and rising crude oil prices promote the use of cheaper fuels. Mabio said it wants to initiate talks with the government on potential subsidies for development.Ethanol, a form of alcohol, increases the oxygen content of gasoline. Mabio has selected the future sites for three of the five plants and is yet to decide where to build the remaining two units, the company said in the statement.
The company plans to finance the constructions from its own resources and loans and expects to have annual sales of Euro 75 million euros from each of the five ethanol plants in 2008. (Bloomberg)