Greentech Lead Asia: Solid Energy, a New Zealand based natural resources energy provider, has sold its biofuel business to a consortium that includes two of its managers– Martin Johnson and Karl Hatton.
Martin Johnson, former fuel business manager, and Karl Hatton, former production manager, bought the company along with two silent partners.
Following the acquisition the company has been renamed Green Fuels, and specializes in converting used cooking oil into biodiesel under the brand name Biogold.
The new owners plan to boost its production level by some 66 percent. Under the guidance of the new team, the company will produce up to 1 million liters of biofuel annually from the current rate of 600,000 liters per year, Johnson said.
In its 2012 annual report, Solid Energy reported that biodiesel sales volumes were down 11 percent to 1.8 million liters largely due to the expiration of government subsidies in May 2012, although it had planned to increase sales of the fuel to 3 million liters.
According to former Solid Energy chief executive Don Elder, biodiesel is no longer profitable because government has stopped giving subsidies for the fuel.
The company also suffered after global coal prices slumped more than 40 percent last year. Elder has been under pressure following his inability to foresee the coal price collapse and spending millions on Solid Energy’s failed biofuel business.
Following the deal, Elder resigned on Feb 5.
In November, Solid Energy also sold its agribusiness division to Pure Oil New Zealand, owned by Southern Packers, Midlands Seed, and agronomist Roger Lasham and former division manager Nick Murney. Pure Oil New Zealand planned to develop the business and grow the amount of oilseed rape crop under contract.
Solid Energy valued the combined Biodiesel operation at $8.7 million in June 2012 after a $9m write down, Stuff.co.nz reported.