Supply Chain Risk: Vivergo praises region

VIVERGO Fuels has praised East Yorkshire for providing the ideal location for its £350m plant as it ensures it conquers a diverse supply chain.

Opened earlier this year in east Hull’s Saltend Chemicals Park, among a cluster of world-class chemicals and renewable energy businesses, the business said the decision to locate here was very deliberate.

Vivergo ethanol sales manager, Mark Batte, said: “Our supply chain is the reason we are where we are.

“We have great access to the feedstock we need and we are purposely based on Saltend because we have access to other energy businesses and the jetty access to export  the ethanol. Our supply chain is so fundamental to our business and we don’t see that ever changing.

“We work with local farms and because the Humber is such a thriving renewables area, we want to share in that. We aim to source our produce within an 80 mile radius.”

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Batte emphasised that although Vivergo aims to source what it can locally, as the UK’s biggest bioethanol producer, it still has a “very wide” supply chain, both geographically and in volume.

He said: “Our supply chain is between two large industries – agriculture and energy-  it is really important to carve our own space between the two markets, so that is really quite interesting for the business.”

The plant will produce 420 million litres of bioethanol a year at full capacity, equivalent to a third of the UK’s current demand. Vivergo will also produce 500,000 tonnes a year of protein-rich animal feed for the UK market, which is sufficient to feed around a fifth of the UK’s dairy herd. Using animal feed grade wheat, which previously would have been exported, Vivergo will become the UK’s biggest wheat buyer, taking 1.1 million tonnes a year.

The company’s bioethanol, which is a renewable transport fuel added to petrol, will offer greenhouse gas savings in excess of 50% over standard petrol; this is equivalent to the current emissions of more than 180,000 UK cars a year.

Working with such a high volume of produce, Mr Batte said Vivergo has to constantly keep moving.

“It is not just about bringing the products in, it’s about moving them out, too,” he said.

For Vivergo, it also has to overcome problems working in both the UK and the wider European economy. The agricultural side of the supply chain is focused in the UK, but the ethanol is focused on wider Europe. 

“Our feed stock is dealt with in the UK market but ethanol is priced in Euros. So this adds an extra level of complexity to the business,” Mr Batte said. 

“It is really important to get good market data and intelligence so we can find out about what’s happening in the markets, rather than waiting until they have happened.”