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China New Energy Ltd

  • BY: Andrew Hore |
  • POSTED: 12/12/2011 |

Biofuels processing technology supplier China New Energy Ltd is acquiring 88.8% of Bengbu Boltech Bio-technology, which sells active yeast used in ethanol production.

China New Energy is trying to build up its recurring revenues so it is not so dependent on the timing of large contracts. One of the ways it will do this is by providing yeast management services. It plans to build plants supplying wet yeast next door to the main biofuel processing plant. Wet yeast improves the efficiency of the plants. Bengbu Boltech

China New Energy will pay RMB13m in cash and shares for the stake in Bengbu Boltech, which has annual supply contracts worth RMB22.4m. That includes a RMB15.6m contract with a subsidiary of COFCO China, a grain, oils and feedstuff trader. COFCO China has an annual capacity of 950,000 tons of ethanol.

Bengbu Boltech is in talks with Jilin Ethanol Industrial, which hopes to increase ethanol capacity to 1m tons by 2013 and it has a 25% stake in a further 500,000 tons of ethanol capacity. China New Energy already has a joint venture with Jilin.

Shareholders in the seller of Bengbu Boltech also control 66% of China New Energy.

At 6.5p a share, China New Energy is valued at £19.8m.

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