M2 Capital Sdn. Bhd

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    Overview

    • Founded Date March 4, 1984
    • Sectors Restaurant / Food
    • Posted Jobs 0
    • Viewed 15

    Company Description

    Central Asia’s Vast Biofuel Opportunity The recent discoveries of a International Energy Administration whistleblower that the IEA may have misshaped crucial oil forecasts under extreme U.S. pressure is, if true (and whistleblowers rarely come forward to advance their professions), a slow-burning atomic explosion on future international oil production. The Bush administration’s actions in pressuring the IEA to underplay the rate of decline from existing oil fields while overplaying the possibilities of discovering new reserves have the potential to toss governments’ long-lasting preparation into turmoil. Whatever the reality, rising long term worldwide demands seem certain to outstrip production in the next years, specifically given the high and rising expenses of establishing brand-new super-fields such as Kazakhstan’s overseas Kashagan and Brazil’s southern Atlantic Jupiter and Carioca fields, which will require billions in investments before their very first barrels of oil are produced. In such a scenario, additives and replacements such as biofuels will play an ever-increasing role by extending beleaguered production quotas. As market forces and increasing costs drive this innovation to the forefront, among the richest prospective production locations has actually been absolutely neglected by financiers up to now – Central Asia. Formerly the USSR’s cotton “plantation,” the area is poised to become a significant player in the production of biofuels if sufficient foreign financial investment can be obtained. Unlike Brazil, where biofuel is manufactured mainly from sugarcane, or the United States, where it is mostly distilled from corn, Central Asia’s ace resource is an indigenous plant, Camelina sativa. Of the previous Soviet Caucasian and Central Asian republics, those clustered around the coasts of the Caspian, Azerbaijan and Kazakhstan have seen their economies boom because of record-high energy prices, while Turkmenistan is waiting in the wings as a rising manufacturer of gas. Farther to the east, in Uzbekistan, Kyrgyzstan and Tajikistan, geographical isolation and relatively little hydrocarbon resources relative to their Western Caspian neighbors have actually largely inhibited their ability to capitalize increasing international energy needs already. Mountainous Kyrgyzstan and Tajikistan stay mostly reliant for their electrical needs on their Soviet-era hydroelectric infrastructure, but their increased requirement to create winter season electrical power has actually resulted in autumnal and winter water discharges, in turn badly impacting the agriculture of their western downstream next-door neighbors Uzbekistan, Kazakhstan and Turkmenistan. What these 3 downstream countries do have nevertheless is a Soviet-era legacy of agricultural production, which in Uzbekistan’s and Turkmenistan case was largely directed towards cotton production, while Kazakhstan, starting in the 1950s with Khrushchev’s “Virgin Lands” programs, has ended up being a major manufacturer of wheat. Based upon my discussions with Central Asian federal government authorities, offered the thirsty demands of cotton monoculture, foreign proposals to diversify agrarian production towards biofuel would have great appeal in Astana, Ashgabat and Tashkent and to a lower degree Astana for those durable investors happy to wager on the future, particularly as a plant native to the area has actually currently shown itself in trials. Known in the West as incorrect flax, wild flax, linseed dodder, German sesame and Siberian oilseed, camelina is attracting increased clinical interest for its oleaginous qualities, with several European and American companies already examining how to produce it in industrial quantities for biofuel. In January Japan Airlines undertook a historical test flight using camelina-based bio-jet fuel, ending up being the first Asian carrier to explore flying on fuel originated from sustainable feedstocks throughout a one-hour demonstration flight from Tokyo’s Haneda Airport. The test was the culmination of a 12-month evaluation of camelina’s operational efficiency ability and prospective commercial viability. As an alternative energy source, camelina has much to advise it. It has a high oil material low in saturated fat. In contrast to Central Asia’s thirsty “king cotton,” camelina is drought-resistant and unsusceptible to spring freezing, requires less fertilizer and herbicides, and can be used as a rotation crop with wheat, which would make it of specific interest in Kazakhstan, now Central Asia’s significant wheat exporter. Another benefit of camelina is its tolerance of poorer, less fertile conditions. An acre sown with camelina can produce approximately 100 gallons of oil and when planted in rotation with wheat, camelina can increase wheat production by 15 percent. A lot (1000 kg) of camelina will consist of 350 kg of oil, of which pushing can draw out 250 kg. Nothing in camelina production is wasted as after processing, the plant’s debris can be used for animals silage. Camelina silage has a particularly attractive concentration of omega-3 that make it a particularly great animals feed candidate that is just now gaining acknowledgment in the U.S. and Canada. Camelina is quick growing, produces its own natural herbicide (allelopathy) and completes well against weeds when an even crop is established. According to Britain’s Bangor University’s Centre for Alternative Land Use, “Camelina might be a perfect low-input crop appropriate for bio-diesel production, due to its lower requirements for nitrogen fertilizer than oilseed rape.” Camelina, a branch of the mustard family, is native to both Europe and Central Asia and barely a brand-new crop on the scene: historical proof suggests it has been cultivated in Europe for a minimum of 3 centuries to produce both grease and animal fodder. Field trials of production in Montana, presently the center of U.S. camelina research, showed a wide variety of outcomes of 330-1,700 pounds of seed per acre, with oil material varying in between 29 and 40%. Optimal seeding rates have been identified to be in the 6-8 lb per acre range, as the seeds’ small size of 400,000 seeds per pound can produce problems in germination to achieve an optimum plant density of around 9 plants per sq. ft. Camelina’s capacity might permit Uzbekistan to begin breaking out of its most dolorous legacy, the imposition of a cotton monoculture that has warped the country’s attempts at agrarian reform considering that accomplishing independence in 1991. Beginning in the late 19th century, the Russian government determined that Central Asia would become its cotton plantation to feed Moscow’s growing textile industry. The process was sped up under the Soviets. While Azerbaijan, Kazakhstan, Tajikistan and Turkmenistan were also bought by Moscow to sow cotton, Uzbekistan in particular was singled out to produce “white gold.” By the end of the 1930s the Soviet Union had actually become self-sufficient in cotton; five decades later it had ended up being a significant exporter of cotton, producing more than one-fifth of the world’s production, focused in Uzbekistan, which produced 70 percent of the Soviet Union’s output. Try as it may to diversify, in the absence of alternatives Tashkent stays wedded to cotton, producing about 3.6 million tons every year, which generates more than $1 billion while constituting around 60 percent of the country’s tough currency earnings. Beginning in the mid-1960s the Soviet government’s regulations for Central Asian cotton production mainly bankrupted the region’s scarcest resource, water. Cotton utilizes about 3.5 acre feet of water per acre of plants, leading Soviet organizers to divert ever-increasing volumes of water from the area’s two primary rivers, the Amu Darya and Syr Darya, into ineffective watering canals, resulting in the significant shrinking of the rivers’ last destination, the Aral Sea. The Aral, when the world’s fourth-largest inland sea with a location of 26,000 square miles, has shrunk to one-quarter its initial size in one of the 20th century’s worst eco-friendly disasters. And now, the dollars and cents. Dr. Bill Schillinger at Washington State University recently described camelina’s organization design to Capital Press as: “At 1,400 pounds per acre at 16 cents a pound, camelina would generate $224 per acre; 28-bushel white wheat at $8.23 per bushel would garner $230.” Central Asia has the land, the farms, the irrigation infrastructure and a modest wage scale in contrast to America or Europe – all that’s missing out on is the foreign investment. U.S. financiers have the cash and access to the expertise of America’s land grant universities. What is particular is that biofuel’s market share will grow in time; less certain is who will enjoy the benefits of developing it as a practical issue in Central Asia. If the recent past is anything to pass it is unlikely to be American and European investors, focused as they are on Caspian oil and gas. But while the Japanese flight experiments indicate Asian interest, American investors have the scholastic expertise, if they want to follow the Silk Road into establishing a brand-new market. Certainly anything that lessens water use and pesticides, diversifies crop production and improves the lot of their agrarian population will get most cautious factor to consider from Central Asia’s federal governments, and farming and vegetable oil processing plants are not just much more affordable than pipelines, they can be developed quicker. And jatropha’s biofuel capacity? Another story for another time.

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