Vuthwa Biofuels is a wholly BEE compliment company located in KwaZulu-Natal. The energy and merit of this project is the result of a partnership between GC Biofuels and Vuthwa Investments. This came about after the respective directors realised that each company held half of the required resources to make an impact in the fledgling South African biofuels industry. Vuthwa Investments, through its dealing with government and municipal structures, possesses valuable knowledge in the area of rural economic development initiatives. GC Biofuels, as an innovative engineering firm specialising in the production of sustainable and environmentally friendly liquid fuels, brings the technical expertise required for this project.
Vuthwa Biofuels, through its relationships, and with the support of local municipal structures, is acquiring the cooperation of communities with underutilised agricultural land available to them. With the support of extension officers, these communities will grow the trees that will produce the feedstock (seeds) for biodiesel production on their own land. The feedstcok will then be transported to Vuthwa's localised processing facility that will produce biodiesel and glycerine as a by-product. This facility will have a generator set attached to it that will produce electricity from a combination of the left over crush cake and small amount of the biodiesel produced.
This project differentiates itself from others that have been attempted in three fundamental areas:
The Moringa Oleifera tree meets the varied demands for success in a project of this nature. It is an amazing tree that can survive in relatively unfavourable conditions, does not form a staple food source and does not require sophisticated and expensive farming methods or inputs. It grows vigorously and matures quickly.
It is resistant to extended dry periods and flourishes in marginal lands. The leaves are highly nutritious and provide and excellent natural multivitamin supplement and immunity boost for both human and animal diets. The seeds yield a high volume of vegetable oil that is extremely stable and excellent for the production of biodiesel.
Through the use and refinement of its pilot facility in Pinetown, Vuthwa has managed to simplify the entire process to such an extent that the company wholeheartedly believes this production process to be viable in low technology rural settings with staff that have limited formal education. This facility has been operating on a commercial basis for over two years, supplying commercial grade biodiesel to a petroleum wholesaler and running vehicles exclusively on the product, manufactured from used cooking oil.
It is important to realise that although Vuthwa Biofuels' core business is the production of commercial grade biodiesel, all biofuels have an agricultural component that cannot be ignored or neglected. The supply of the raw materials at the correct price and in sufficient quantities is essential for this, and any other biofuels project, to be sustainable and commercially viable. As such, implementing the correct agricultural strategy - one that evades the moral issues currently surrounding biodiesels debates, whilst simultaneously being able to deliver the required feedstock in sufficient quantity at satisfactory quality and appropriate price - is as important as having the correct processing technology. For success in this industry, the two must go hand-in-hand. Because Vuthwa Biofuels already has the processing technology operating on a commercially sustainable platform, the company has placed significant emphasis on the structure of the agricultural model that will be necessary to make this project succeed.
Vuthwa Biofuels is deliberately positioning itself to partner with various government institutions and departments on all levels as the company is aware that the scale of this project is too vast to achieve its full potential without its collaboration. This partnership ensures that the efficiency of the private sector is combined with the scale and reach of the public sector to form a synergy that has the ability to positively influence communities on a broad scale. In acknowledging that the company lacks the necessary resources to achieve all the vast goals of this project, it recognises the need for the importance of the strategic partners in both the public and private sectors.
Much of the groundwork for this project has already been undertaken with foundations laid in terms of local government support, land acquisition through relevant local tribal authorities, research of the feedstock tree through nursery and out-planting tests, commercial operation of a processing facility and initial acquisition of seed from international suppliers. Thus the company makes the project profitable for both the company and beneficial to the partnering communities.
As coordinators of this project, Vuthwa Biofuels requests that in each district the three hundred cooperatives are formed receive direct grant financing in the order of R50 000 per cooperative. This would provide a financial base from which the cooperatives would be able to enter this project and begin the process of raising trees. In addition to this grant, the cooperatives will each take out loan finance of approximately R95 000.
Through this project, a total of 3 000ha of "community gardens" will be established and a sustained income to more than 1500 families will be achieved. Over the 30-year lifespan of the trees, the R14 500 establishment cost per hectare, or R484 per hectare per annum, will realise an average benefit in excess of R5 000 per hectare per annum or R10 000 per family every year.
Vuthwa Biofuels and the local community, through their cooperatives, will combine to take out a separate loan from the construction of the nursery, biodiesel processing plant and by-product beneficiation facility. The community cooperatives will assume responsibility for a portion of this loan, proportional to their shareholding in these facilities. This repayment will be made from the dividend payable to the community.
