WA-BASED industrial developer Indcor Limited this week released its long-anticipated bid to acquire construction giant Multiplex’s ethanol fuel production and marketing business.
Under the initial public offer, which closes next month, Indcor hopes to raise $5 million to acquire and develop Australian Biofuels’ (ABF) substantial ethanol projects.
Indcor says while current production of fuel ethanol in Australia is about 70 million litres a year, or about 0.4 per cent of the total petrol market, estimates put the potential Australian fuel market for ethanol at 1.8 billion litres a year, or 1,800 million litres.
The move marks a shift in the nature and scale of Indcor’s business activities, which started business with the TasMag Magnesium Metal project in Tasmania in 2001.
Indcor initially took over management of Australian Biofuels at the start of 2003 after it paid out a $1.5 million loan ABF owed its parent company, Multiplex.
Indcor has confidence in the growth of the ethanol sector, especially considering its strong environmental and government support.
The company is banking on ABF’s two most advanced projects – the wholly owned and Australian first Swan Hill multi-grain ethanol project in Victoria and its half-owned Coleambally ethanol project in New South Wales – to provide a springboard into Australia’s developing ethanol market.
A feasibility study has already begun on the Swan Hill project, of which stage one is reported to be worth $22 million.
Indcor says it has been encouraged by its biggest shareholder, Multiplex, which holds about 26 per cent of the company. Multiplex plans to subscribe for a minimum of $1.25 million under the Indcor IPO.