ASSOCIATED BRITISH FOODS (ABF) is to take a £98m hit on its bioethanol joint venture with Vivergo Fuels.
In a statement, ABF said: “Associated British Foods plc today announces that, in light of the continuing fall in crude oil and bioethanol prices, and the further weakening of the euro against sterling, it has taken the decision to impair its investment in Vivergo Fuels Limited, its wheat-fed bioethanol joint venture with BP and DuPont in the UK. The interim results for the 24 weeks ending February 28 will include a non-cash exceptional charge of £98m.”
At full production, Vivergo in Hull will be the UK’s biggest producer of bioethanol and the largest single source supplier of animal feed.
A Vivergo Fuels spokesman said: “We currently face an extremely challenging market caused by a decline in bioethanol prices, a devaluation of the Euro and falling oil prices. In addition, the increase in the blend ratio of bioethanol in gasoline to meet the legislation for renewable transport fuels has developed slower than expected, impacting demand for the bioethanol that we produce.
“Our shareholders remain fully supportive and believe in the importance of bioethanol as a renewable transport fuel that delivers both economic and environmental benefits. We continue to work closely with them, and to focus on the things that are in our control, namely maintaining efficiencies plus safe and effective operations across our business.”