D1 Oils goes for broke on idea as rest lose faith

Jun 24 2009 by Karen Dent, The Journal

BIOFUELS company D1 Oils is in talks to dissolve its joint venture with BP and revealed it may be unable to continue as a going concern if it cannot raise extra funds next year.

But the Middlesbrough company, founded by North East entrepreneur Karl Watkin to grow the biofuel crop jatropha, insisted it would be cash positive until the end of 2010 as it announced pre-tax losses of £33.6m for 2008, down from £46.1m in 2007. Excluding £7.1m in its BP joint venture, D1 had £11.3m cash at the end of May.

D1 altered its focus from biofuel production to jatropha growing last year when it closed refineries on Teesside and Merseyside with the loss of 90 jobs. Mr Watkin left the board in March last year. The company admitted this month it had failed to attract a third investor for its D1-BP Fuel Crops joint venture and now wants sole control of the planting project.

D1 chief executive Ben Good said: “Our discussions with BP to acquire its interest in the capital structure of D1-BP Fuel Crops for an interest in the long-term success of D1 Oils plc will allow us to consolidate our operations to focus on operational delivery and the effectiveness of our existing planting. Our activities will also focus on generating revenue through sales of products and services to the jatropha industry.”

One of these is developing animal feed from jatropha meal, a by-product of the plant, which is grown in Africa, India and Indonesia.

D1 director of corporate communications Graham Prince said: “We are now concerned about raising resources and using the plantations to generate revenue for third parties. We have put in place a strategy which aims to generate revenue through animal feed products from the japtropha meal and production of oil. If we can put those measures in place, we will look more attractive to investors in due course.”