Biodiesel launched by My Eco Energy is compatible with the existing diesel engines and requires no modifications, says Santosh Verma, Co-Founder, My Eco Energy.
My Eco Energy has launched imported biodiesel that is compatible with the existing engines with 25 pumps across India. How sustainable is your business that is entirely dependent on imported end product?
The (biodiesel) fuel, although imported, is produced using my own technology. We procure the raw material and convert it into the final product meeting the specified requirements. Its sustainability depends on various factors like supply ability, financial ability (which is your cost and duty tariffs), etc. If these are changed, then proportionately your risk also will increase. Considering all these factors, we are looking at setting up a domestic production unit. We are anticipating, by then, at least one assembly unit will be operational in India. In case of the raw materials, we will source from both internationally and domestically. That said, as we progress, a majority of the raw material sourcing in the range between 32-70 per cent will be from India. Right now, we are importing from Singapore and Malaysia.
What timelines are you looking for setting up production unit in India?
The first assembly unit or the first domestic manufacturing unit will be operational by the end of this year. We will be utilising existing infrastructure like the tanks and other facilities in the area. We will be putting up our own reactors in these sites for production. We have finalised two locations- Khandla and JNPT. However, the exact date of commissioning will depend on the necessary clearance from the authorities.
What will be the capacity? Is there a plan to increase the number of pumps from the current figure (50) that has been rolled out now?
The target is to add about a million metric tonne capacity per annum. The intention is to increase the number of pumps to 50 in the next three months and we have an order book of around 700 as of now. For a fuel station, even a company like Reliance, took five to seven years to build its network. My business doesn't have a pedigree or another balance sheet to bank on, so it will take time. I've been fortunate enough that a lot of the court judgments and the law has been favouring our side.
What kind of investments are you looking at to set up the production facility?
For the facility, I am renting most of the equipment, apart from my reactor (IP that is what is more important). So I'm not investing anything. Well, I can't afford to invest right now, unless and until my balance sheet starts growing. I have to sell something and earn revenue and then build it. Look at all the modern businesses today, they don't invest in building facilities but simply outsource it.
How supportive is the new biofuel policy for a business like yours?
The biofuel policy is encouraging, however, on the ground we will have to see how it will work in our favour. Considering it's a policy, it has nothing to do with enacting the acts or changing any acts. No one can claim a tax benefit because it is announced through a policy but it has to be enacted through an act.
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