PARIS, Jan 22 (Reuters) - Sofiproteol is in talks with U.S. agribusiness giant Bunge to review their biodiesel joint venture in Europe, the French oilseed group said, as it aims to cut overcapacity at a time of weakening demand for the renewable fuel.
Sofiproteol, owner of the European Union’s biggest biodiesel maker, Diester Industrie, and Bunge have a 60-40 percent deal in a spinoff called Diester Industrie International (DII), which controls plants in Belgium, Germany, Italy and Austria.
“Our wish is to cut our risks and exposure on biodiesel,” Sofiproteol CEO Jean-Philippe Puig told Reuters in an interview.
“They (Bunge) are mainly present in Northern Europe and we are in France and southern Europe. So there are a number of talks going on with them,” he said.
He declined to give further details.
Bunge was not immediately available to comment.
DII, created in 2005, accounts for approximately a third of Diester Industrie’s overall capacity of 3 million tonnes of biodiesel. Diester Industrie also has seven plants in France.
DII halted production a year ago in Livorno, Italy, due to overcapacity and does not plan to restart it, Puig said.
Sofiproteol’s results were hit last year by weakness in the biodiesel sector, where EU producers faced harsh competition from cheap Argentine and Indonesian imports and now threatened by a change in EU policy that aims to limit the use in fuels.
Biodiesel is only one of several activities of the group controlled by French oilseed growers, along with vegetable oil, animal feed and green chemicals. The group had a turnover of around 7 billion euros ($9.3 billion) in 2012.
Diester Industrie brought a large chunk of the group’s profits in the previous decade when the EU was investing massively in the green technology but more recently struggled to break even.
As part of the group’s strategy to find alternatives to biodiesel for its rapeseed oil and sunflower oil output, Sofiproteol is also seeking new markets, mainly in Maghreb countries and the Black Sea, Puig said.
The group is in Morocco and in Tunisia through its vegetable oil branch Lesieur Cristal and in Romania with oilseed processor Expur.