A few years ago, an ambitious company reinvented itself by producing a clean burning fuel from used cooking oil. Many thought it was a flash in the pan. But Edible Oil has exceeded all expectations by selling 1.4 million litres of bio diesel so far this year. Michael Carabott caught up with company owner PIPPO PSAILA, who explained the process and gave details of the results Edible Oil has achieved
The early days
Edible Oil was set up in 1954, making it 51 years old. It started out as an oil refinery in partnership with Danish market leaders Aarhus, Pippo Psaila began.
“We started evolving and we were lucky that in the late 1950s, Egypt’s leader Abdul Nasser closed down the Suez Canal. He was arguing with the British and imposed toll fees on the canal,” Mr Psaila said.
This meant that there weren’t any refineries in the southern Mediterranean basin, so Edible Oil suddenly found itself in the limelight.
“The oil used to come from the Far East and we would refine it. At that point in time, somewhere around 1958, it was just the right niche opportunity. We have been exporting oil since the late 1950s to places such as Rhodes, Crete, Italy, North Africa and mainland Greece,” he explained.
In 1960, Edible Oil began its association with Unilever, which lasted until 1996 and still represents a few of their products. Mr Psaila continued: “We moved to detergents – producing shampoos, toiletries and others. We had about 125 Unilever products on our portfolio at times, believe it or not.”
He said that the company then moved into the poultry market and began its association with brands Ross and Sykes. “We set up a fully-integrated industry – we had our own rearing and breeding facilities, hatcheries and slaughter houses,” said Mr Psaila.
He said that the company also took to producing fat to complement its oil refining activities and began to churn out brand names such as Stork, Blue Band and Flora.
“We’ve exported to some quite far away places like Cuba, Jamaica, South Africa, both Yemens, the Virgin Islands as well as other established countries such as the UK, Holland, Spain and Saudi Arabia,” said Mr Psaila.
“About three years ago, we realised that liberalisation of the market and globalisation meant that we would lose a sizeable share of our market. The strategy to have an export business is to have a strong local market component and with Malta being small, it was even more important,” he said.
Mr Psaila said the company realised that losing its local market share would hit it hard and would mean that Edible Oil would no longer be competitive. “We realised we needed an alternative, then it hit us there was something right up our street. It was glaring,” he said.
Mr Psaila said it occurred that one of the most natural progressions was to produce bio diesel from oils and fats.
Bio diesel is born
“We have been in the business for donkey’s years, so all we needed was to find size and the expertise to convert fat and oil into fuel,” he said.
After various studies, the company started trials in 1999 and production runs began in 2000 and 2001. “We then spent one year and a half field testing on our 45-strong fleet of vehicles, which includes trucks, fork-lifters, cars and various other bits and pieces,” he said.
“Towards the second half of 2003, we were happy with the product and so we started an awareness campaign. We knew it would be a culture shock – the question on everyone’s lips was: ‘How can you turn fat from a frying pan into fuel in your petrol tank?’”
“As it is, heavy duty vehicles run on anything. But when you start to think about sophisticated Euro 3 and Euro 4- type engines, it takes quite of convincing that vegetable oil and fat can be a safe and reliable fuel,” he said.
Mr Psaila said Edible Oil was not targeting the market at that point. “We just needed to sensibilise people and show them there was clean burning alternative fuel. We wanted to let people get used to the idea first. We had features on television, we organised conferences, we set up programmes in schools and seminars. Through this process we managed to create awareness,” he said.
Mr Psaila said he was not kidding himself or others. “This will not halt climate change and global warming. But it will help us, at least, decelerate the process,” he said.
He also said that the company’s most important strategic partner was the Rural Affairs and Environment Ministry. “They said it was an interesting project and they gave us their full cooperation. They began using our product to operate their fleet and other government entities and corporations followed suit,” he said.
Mr Psaila said that this year, Edible Oil set up its own selling point in Marsa. “This year, we have sold 1.4 million litres of bio diesel and that includes government fleets. In fact, the government set us a target to acquire 0.3 per cent of the local market and as things stand, we have 0.9 per cent of the total market,” said Mr Psaila.
Why people should use bio diesel
Mr Psaila said that low-sulphur content fuel has lubricity properties and this can affect engine parts. “Bio diesel has 600 times the lubricity properties that zero sulphur fuels have. You also save on miles per gallon as well as it being cheaper than diesel.”
He said that the company has about 3,000 customers per week. “We only have one pump – so one can envisage the potential of this project.
“Liberalisation of the fuel supply market will terminate Enemalta’s monopoly. Bio diesel should find its way to other selling points,” said Mr Psaila.
He said that bio diesel was becoming a recognised fuel. “In fact, the EU recognises that low-sulphur diesel EN590 causes engine wear. As a result, normal diesel is allowed a five per cent bio diesel component without even having to advertise the fact. This is to help with lubricity of engines,” explained Mr Psaila.
Facts and figures
Mr Psaila said that one could expect an 86-90 per cent recovery in fuel from oil. “It depends on its quality – the number of times it’s been fried, fragments, and also the quality of water used.”
He said that after refining, one is left with glycerin as a byproduct, which is used in some 2,500 products. “So you have a totally exhaustive cycle – waste oil produces a cleaner burning with zero sulphur and a useable byproduct,” he said.
Mr Psaila continued: “We recycle cooking oil – it’s a win-win situation because you are also getting rid of waste. The Water Services Corporation calculated that Lm300,000 per year is needed to clean drains and 4,000 tonnes of used cooking oil is thrown away. This year we recovered about 1,000 tonnes of the stuff.”
Mr Psaila said that Edible Oil’s refining plant had a capacity of 15,000 tonnes or 15 million litres.
“This year, we are close to 10-11 per cent capacity. The only down side is that these plants cost a bomb – you are talking close to Lm21 million,” he said.
He said that the company had no intention of setting up points of sale.
“We don’t want to be intruders but we want strategic partnerships. We think that it’s about time that the product is diffused more widely and that people should not have to come all the way to Marsa when there are petrol pumps on their doorstep,” said Mr Psaila.
He said that in his opinion, most clients used bio diesel because they wanted to be more environment conscious, as any saving that is made on fuel costs is consumed by the trip here.
He said that one of the company’s next priorities was to try and have Gozo Channel as a customer. “Bio diesel is very interesting for operators of large machines. The Freeport, for example, could use it on their cranes – they have a consumption of 6,000 tons of diesel a year. Multiply that figure by a saving of 1c2 per litre and you have a saving of close to Lm60,000,” he said.
Asked how well the company has performed, Mr Psaila said: “We have been overwhelmed. Last year we sold 200,000 litres and so far this year, we have already shifted 1.4 million litres of bio diesel.”
The BBC World Challenge
Last month, Edible Oil placed second in this competition which had over 500 entry projects from 86 countries. Mr Psaila said the company’s placing in the competition raised the bar. “People saw the programme and the awareness that has arisen as a result is phenomenal to say the least. The past three months in particular have been amazing,” he said. He said that Edible Oil was extremely proud to have placed second in such a prestigious competition.
One can read up on the BBC’s profile about Edible Oil entitled Fat Chance on website http://www.theworldchallenge. co.uk/finalists6.html