Reference no: EM131314530

Tata Chemicals, leading manufacturer of Caustic Soda in the country said today that it had bought a 35 per cent stake in JOIL Pte, a Singapore based jatropha seeding company. The stake buy will help the firm gain exclusive marketing rights for technology to develop the best seed varieties of the plant which yields bio-diesel. The Mumbai-based company has committed to invest Rs 80 crore in lieu of the stake in the next 4 years. Bio-diesel is one of the many alternatives being developed globally to achieve energy security. According to Tata Chemicals, the break even price for jatrophaused biodiesel is $ 55 - $ 60. The price crude oil is currently hovering around $ 52 a barral after dropping almost 65 per cent from its all time high of $ 145 a barral in July. `No one is expecting crude to remain at this level’ said Home, M. D. Tata Chemicals. `We have made the investment keeping 2-3 years in mind, when we expect crude oil to trade $ 100 a barral. He said. Joil a joint venture of Temasek Life Science Laboratory and other investors, has developed the technology to produce seedings, which gives standardized yield and consistent output from Jatropha. Currently, the Jatropha plant used for commercial production has an irregular pattern of production. “We will have an exclusive global marketing right to the research done by Temasek Life Science Laboratory,” said Homi. The company will be setting up a tissue culture lab to study the commercial potential of the project and it will take atleast a year before it is brought to the market.

Question :

1) What is the commercial viability of Jatropha used bio-diesel?

2) What is the profitability of this bio-diesel?

3) What is the future of this jetropha based bio-diesel as alternate energy security?

4) Explain the term Joint Venture in detail.