Evogene and Ormat unit team on biodiesel

Evogene Ltd. (TASE:EVGN) and Ormat Industries Ltd. (TASE: ORMT) subsidiary Orfuel Inc. have signed a cooperation agreement to supply raw materials for the production of biodiesel. Evogene is a plant genetic engineering company and Orfuel is an alternative fuel company. Ormat launched biofuel R&D a year ago, and opened negotiations with Evogene in this area.

In July, when the two companies announced their collaboration, they obtained a $1 million pledge from Israel-United States Binational Industrial Research and Development Foundation (BIRD-F), which would be paid when the companies signed a binding agreement. In the July announcement, the companies said that the project would have a $2 million budget.

IBI Investment House analyst Yuval Zehira estimates the biodiesel market at $4.5 billion a year, and predicts that it will grow to $9.5 billion a year by 2010.

Evogene and Orfuel will collaborate on a three-year project to develop oil-rich soy bean and canola rapeseed for the production of biodiesel. The plants will not be fit to eat and will be grown on non-agricultural marginal land, which will reduce the cost of raw materials used for the production of biodiesel.

Evogene will utilize its biotechnology techniques for locating genes and genetic markers to speed up growth of the designated plants with improved characteristics for the production of biodiesel. Orfuel will conduct field experiments for commercial production of the plants and test their effectiveness for biodiesel production. When the project is completed, the two companies plan to establish a joint venture to commercialize and market the plants they developed.

Published by Globes [online], Israel business news - www.globes.co.il - on September 24, 2007

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