Vivergo Fuels gets set for future development

AS the £350m Vivergo Fuels plant gets ready to reach full capacity, what’s next for the East Yorkshire energy gem, one of Europe’s largest producers of bioethanol and protein rich animal feeds?

Managing director of the biorefinery, Mark Chesworth, said the business may have seen a challenging year, but he is looking forward to reaching full capacity in 2015 and seeing the business deliver.

The Vivergo plant, a joint venture between AB Sugar, BP, and DuPont, was opened last summer at Saltend Chemicals Park in East Yorkshire, and will produce 420m litres of bioethanol (a renewable transport fuel which is added to petrol) 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.

Chesworth took over the helm last December. Formerly of Associated British Foods as Ryvita’s supply chain director, Chesworth told TheBusinessDesk.com that Vivergo will potentially be looking at new investment opportunities in the years ahead.

“We are currently doing strategic work about what’s next,” he said.

Vivergo Fuels is ideally positioned for future technology deployment, both for alternative feedstocks such as cellulosic ethanol and advanced fuel molecules, like biobutanol.

“This year has been a ramp up year. We’ve had operational challenges during 2013, but we are ready for lift off. Next year is very much about the business delivering,” Chesworth, who described the operation as the “jewel in the crown” of the energy cluster in East Yorkshire, added.

“I am looking forward to the year ahead, but we need to see more government support.”

Currently, up to 5% of bioethanol is blended with regular petrol at the pump. By 2020, the UK must ensure that 10% of transport fuel is sourced from renewable sources. Vivergo’s plant has been designed for the market it was expecting (figures to be slightly higher than just 5%) and at the moment, it’s not growing at the rate the industry anticipated it would. It is looking for support from the UK government to keep this moving.

“We’ve had our challenges but we’re working very hard to influence UK government,” Chesworth added.

The “challenging” year Chesworth discusses, includes the long-standing dispute with Redhall Engineering Solutions and a £48.9m loss for the year ended December 2013. Vivergo’s turnover reached £51.8m, however, the design and commissioning issues at the company’s plant in Hull led to lower than expected output volumes of Vivergo’s two commodity products – bioethanol and animal feed.

But the firm remains upbeat and is also focussed on boosting the fortunes of wheat farmers in the region to the value of £1m per month.

Historically, much of the feed grade wheat grown in the region has been exported into mainland Europe to feed animals and for use in European biofuel production. However, since Vivergo opened its plant, the region’s farmers have been taking advantage of an alternative and financially beneficial market for their wheat.

Given Vivergo’s location at the heart of the UK’s wheat belt, the company, based on a 25-acre site, the equivalent of 12 football pitches, aims to source animal feed grade wheat from local farms within a 50-mile radius, significantly boosting the agricultural sector.

Rick Taylor, commercial director at Vivergo, said: “The UK has historically had a wheat surplus, exporting between 2.5 and 3m tonnes a year. As the UK’s biggest wheat buyer, we offer a 365 day demand for local arable farmers, providing a new sales channel, often giving more competitive rates for their feed-wheat as opposed to the previous export of this commodity.

“Not only are we supporting local farmers, but we’re also bolstering the UK economy by creating around 2,400 jobs so far, with this figure set to increase to around 3,800 once the plant is at full production later this year. Many of those jobs will be in the agricultural sector.”

Taylor added that it is essential the UK government is supportive in terms of legislation to increase the current bioethanol blending ratio, so that Vivergo and other UK producers can continue to provide a long-term, sustainable and stable future market for UK farmers.

Vivergo’s bioethanol 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, or a traffic jam from the Saltend site to Manchester and back.

Once fully operational, the plant will contribute £600m a year to the UK economy.

The company has around 150 employed on site, 37 of which have been employed just this year.