SPC Biodiesel Sdn Bhd is a wholly owned subsidiary of Sterling Biofuels International Limited. Its principal activities are:

• Construction and operation of a 100,000 tonnes per annum biodiesel manufacturing plant in Lahad Datu, Sabah; and
• To manufacture and sell biodiesel to global markets – in particular, Europe.

The biodiesel will primarily be made from palm olein (refined form of palm oil).

Despite various logistical challenges that needed to be overcome, the biodiesel plant was built in less than a year - within the time frame and under the budgeted cost specified in the prospectus. SBIL expects to commence production of biodiesel in 2007.

Strategic Location

To this end, SPC Biodiesel has acquired 10 acres of land within a purpose-built industrial park, known as the Lahad Datu Palm Oil Industrial Cluster, for the construction of the plant. This industrial park is being developed by the Sabah state government on the east coast of Sabah and is dedicated to palm oil related industries.

Feedstock & Offtake

• Abundance of palm-based feedstock
  The annual Malaysian production of palm oil is in the region of 16 million tonnes. Added to this, the long history of established agronomic and large scale estate management practices aids the efficient and stable production of palm oil by the palm oil industry. This contributes to ensuring security of supply for biodiesel manufacturers like SBIL. No other new alternative feedstock has yet to develop similar industry characteristics and deliver commercial quantities for consideration.
  
• Location of plant in heart of palm oil country
  Lahad Datu is the right choice of location as approximately a third of Malaysia's annual production comes from Sabah of which 90-95% is accessible from Lahad Datu.
  
• Rising demand for palm biodiesel
  The growing demand for renewable energy sources as a means of addressing the issue of global climate change has led to an increasing demand for palm biodiesel as an alternative to biodiesel produced from rapeseed oil or soy oil.

SPC Biodiesel has secured the sale of its entire production of Biodiesel to an international energy trader.

SPC Biodiesel utilises proven biofuels technology sourced from De Smet Engineering (SEA) Pte Ltd, part of the Desmet Ballestra Group, an international supplier of oleochemical equipment.

The plant utilized Desmet Ballestra as the technology supplier and this helped considerably as they have built and are building several biodiesel plants around Malaysia. With their experience from their earlier Malaysian plants of similar size and type, they implemented enhancements to the SBIL plant at no further cost.