In reviewing the biofuel market, the Company decided that the best return on investment was obtained from the production of the Jatropha oil as feedstock for the biofuels industry , together with maximum use of by-products.
These by-products take the form of seed residues after the oil has been expressed, and branches form the regular pruning needed to keep the tree branching at a height compatible with harvesting of fruits by hand from the ground.
The seed residues may in future be converted to high-protein feed for farm animals or fish, but currently they contain toxins. When the process is developed to render the toxins harmless, this may be the most profitable use of the residues.
However, meanwhile, the high nutrient content of the seed residues provides value as an organic fertilizer. There is a large domestic market for organic fertilizers in Thailand, which aims to become the world leader in organic rice production.
The branches provide a continuous source of woody biomass. The Company’s studies and production tests show that the most profitable use of these branches is their conversion into dense wood pellets for export to the major world markets – Europe and Japan.
Should this change, the prunings can be sold as biomass to the many biomass power generators in Thailand , or the Company may elect to construct its own biomass power generating stations.
Each decision is made on the basis of best return on capital, with the proviso that all options are sustainable and socially constructive.
Seed Production Model
Thailand is a country with many millions of farmers with small land holdings. The Company has created an extensive network for the growing of Jatropha under contract.
Since many growers are subsistence farmers it is important that Jatropha is additional to their system of farming rather than replacing a food. This is achieved in nearly half the cases by growing the Jatropha as hedges, a practice already established in the north of Thailand.
In the remaining cases small areas of idle land are used, or the trees are integrated into a more profitable intercropping system. When intercropping is used a commercial legume is the choice , and the crop residue increases the nitrogenous organic matter in the soil. Over time the fertility of the soil is improved.
Bank credit is difficult to source for small farmers , but he Company has devised a system in conjunction with the government agricultural banks to allow the farmers access to credit for the intercropping model. Although the arrangement is without recourse to the Company, the Company plays in integral role and earns a commission which defrays costs. The farmer is the major beneficiary.