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Expansion of palm oil mill effluent treatment business in Southeast Asia — Electricity generation using biogas recovered in palm oil mill effluent treatment —

March 19, 2015

Kubota Corporation (Head Office: Naniwa-ku, Osaka, Japan; President and Representative Director: Masatoshi Kimata; hereinafter referred to as "the Company") is currently contributing to environmental preservation activities by palm oil manufacturers through the installation of palm oil mill effluent (hereinafter called "POME") treatment systems in Malaysia and Indonesia.
The Company will also be starting a new business in Malaysia for the selling of electricity to recover the initial investment in POME treatment systems. This electricity is efficiently generated through the biogas recovery process from POME.
The Company will undertake wide range of work from the construction of the POME treatment systems to the biogas power generation and will aim to further expand the Company's POME treatment business.

1. Overview

Details A special purpose company (hereinafter called "SPC"), will generate electricity using the biogas recovered from POME and sell the electricity. The Company will propose schemes to utilize the revenue from the sales of electricity for the recovery of the initial investment required for the introduction of POME treatment systems.
The Company is going to make an investment in the SPC that was established by SUL in July 2013 for the purpose of selling electricity. SUL is a company operating palm oil production and sales business in Malaysia.
Capital 2.8 million Malaysian ringgit
Investment ratio Kubota 49%, SUL 41%, AQUAKIMIA 10%
Investment timing March 2015
Location Dengkil, Selangor, Malaysia

2. Background

  • Palm oil is a major export product of Malaysia and Indonesia. The effluent discharged from the palm oil mills is often treated in ponding system (open lagoons) and this causes water pollution and the release into the air of a greenhouse gas (methane). Environmental improvements are therefore a major concern.
  • In recent years, increasing demands for environmental conservation from the consumers of palm oil have prompted the palm oil manufacturers to start implementing POME treatment systems. These systems consist of biogas plants*1 and polishing plants*2
  • The Company received its first order for POME treatment system in Malaysia in October 2012 and is continuing proposal activities. However, the initial investment required for the systems is a large burden, especially for small and medium-scale palm oil manufacturers.
  • In order to reduce the financial burden on the palm oil manufacturers, the Company will propose schemes to use the biogas recovered from POME to generate electricity. The revenue from the sales of electricity can then be used for the recovery of the initial investment.
  • Through the SPC that implements the renewable power generation business, the Company will contribute to environmental protection activities of the palm oil industries.
  1. *1.Facilities to recover biogas from POME
  2. *2.Facilities to further purify the effluent after biogas recovery for compliance with water quality regulations

3. Electricity generation business schemes

  1. *3.Feed in Tariff

4. Orders received to date

  1. Malaysia
    For BBC Biogas Sdn.Bhd.
    1 each of biogas plant and polishing plant
  2. Indonesia
    For Asian Agri Group
    5 biogas plants
  • This is the first project of power generation for the Company.

5. Future developments

  • By accumulating expertise through activities in the POME treatment business, the Company intends to develop a complete system to offer from plant construction to operation and maintenance and to further expand the Company's biogas business in Asia.
  • The Company aims at solving the worldwide problems of "food", "water", and "the environment" and is determined to contribute toward this goal through its active involvement in POME treatment business.

< For reference >

[Outline of SUL]

Company name Seri Ulu Langat Palm Oill Mill Sdn.Bhd.
Location Sepang ,Selangor, Malaysia
Establishment 1979
Capital 7.8 million Malaysian Ringgit
Business description Manufacturing and sales of Palm Oil

[Outline of AQUAKIMIA]

Location Subang Jaya, Selangor, Malaysia
Establishment 1989
Capital 1.0 million Malaysian Ringgit
Business description Sales and engineering of water treatment equipment
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