Slovnaft plans to set up a venture with Envien AS, a Slovak company, that will build a € 30m plant to make bio-components for diesel fuel, spokeswoman Hana Simkova said. Slovnaft will invest about € 1m to acquire 25% plus one share in the venture and cover a proportionate part of the project's investment needs. The plant will process rapeseed to make about 100,000 tonnes of bio-components a year and start production by early 2008.
Our view: This investment of MOL is directed to meet the European Union's requirements for higher sales of clean fuel. It is going to be a relatively large plant, and due to the current deficit of biofuel components in Europe could be an important supplier in the future. We expect the slight positive reaction from the market as any involvement of MOL to biofuel business is favoured.