Dubai Group buys stake in Malaysian biodiesel

The emirate-owned Dubai Group announced today that it acquired a 30 percent stake in Malaysian biodiesel company GBD Investment for $49.5 million.

The Dubai Group said GBD owns the largest biodiesel plant in the South East Asian region, a 200,000 metric ton biodiesel facility at Lahad Datu in the state of Sabah.

"Biofuels and renewable energy are preferred industry focus for Dubai Investment Group, and we intend to bring this technology to the geographic regions, specially Middle East, where we currently have a presence," said Abdulhakeem Kamkar, CEO of Dubai Investment Group, a subsidiary of the Dubai Group.

The Dubai Group said GBD is preparing start work on phase II at its biodiesel facility, which is expected to boost the plant's capacity to 500,000 metric tons per year.

GBD's plant uses both palm oil and jatropha as feedstock, producing biodiesel and pharmaceutical-grade glycerine.

Hwang Jong Sic, chairman of GBD, said, "With the mandatory blending of biodiesel into petrodiesel imposed by the governments from around the world, GBDI maintains a bullish outlook on the long term viability of the biodiesel market."

The Dubai Group said GBD plans to use the cash for working capital in the Lahad Datu plant and an investment in a jatropha plantation in the Philippines.

The plantation, which will cover up to 200,000 hectares, will have a potential annual production of 750,000 tonnes of crude jatropha oil, according to the Dubai Group.