Identifier
Created
Classification
Origin
07TEGUCIGALPA1694
2007-10-23 19:42:00
UNCLASSIFIED
Embassy Tegucigalpa
Cable title:  

HONDURAN FIRM PRODUCES BIODIESEL FROM TILAPIA

Tags:  ENRG ECON EIND EINV SENV HO 
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VZCZCXYZ0000
RR RUEHWEB

DE RUEHTG #1694/01 2961942
ZNR UUUUU ZZH
R 231942Z OCT 07
FM AMEMBASSY TEGUCIGALPA
TO RUEHC/SECSTATE WASHDC 7051
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
UNCLAS TEGUCIGALPA 001694 

SIPDIS

SIPDIS

WHA/EPSC FOR FAITH CORNEILLE, EEB/ESC FOR MATT MCMANUS,
EEB/CBA

E.O. 12958: N/A
TAGS: ENRG ECON EIND EINV SENV HO
SUBJECT: HONDURAN FIRM PRODUCES BIODIESEL FROM TILAPIA

UNCLAS TEGUCIGALPA 001694

SIPDIS

SIPDIS

WHA/EPSC FOR FAITH CORNEILLE, EEB/ESC FOR MATT MCMANUS,
EEB/CBA

E.O. 12958: N/A
TAGS: ENRG ECON EIND EINV SENV HO
SUBJECT: HONDURAN FIRM PRODUCES BIODIESEL FROM TILAPIA


1. (U) Summary: Aguafinca, a Honduran firm with Swiss
capital and an Israeli manager, claims to be the only company
in the world producing biodiesel from tilapia. It produces
3,000 gallons of biodiesel a day, which powers its entire
vehicle fleet and meets 50 percent of its power generation
needs. The company sells or uses 100 percent of the fish it
raises. Additionally, the company provides 1,500 badly
needed jobs in the rural areas of Yojoa and Cajon. End
summary.


2. (SBU) Aguafinca, which raises tilapia in Yojoa Lake in
West-Central Honduras, prides itself on its environmental
consciousness, social responsibility, ingenuity and tenacity.
No parts of the fish are discarded. Scales are sold to a
pharmaceutical company in Japan. Fillets are sold to U.S.
supermarkets. The remaining biomass is separated into dry
and wet components. The dry biomass is ground into fishmeal
and sold to Cargill's Honduran operation. The wet parts
produce glycerin, which is sold to a soap factory, and fish
oil, which in turn is either turned into biodiesel or sold to
Cargill as an animal feed ingredient. The company has an
extensive reforestation project, which helps protect the
water quality in the lakes.

--------------
Biodiesel from Tilapia
--------------


3. (U) The idea of creating biodiesel from Tilapia came
from Israel Snir, the Aguafinca general manager. The
enormous quantity of tilapia biomass was creating a landfill
issue; additionally Snir said he saw an opportunity to help
the environment while cutting energy costs. The raw material
is fish skin, bones, heads, tails and organs. This biomass
is pressed to separate the liquid portions, which are then
heated to separate most of the glycerin from the oil. Over
the next two hours the remaining tilapia oil undergoes a
chemical and thermal process which turns it into biodiesel,
removes the remaining glycerin, and filters the fuel.


4. (U) Aguafinca runs its fleet of delivery trucks, employee
busses and company cars on 100 percent biodiesel.

Contractors doing business with Aguafinca are also allowed to
purchase the fuel at the company pump, paying 45 Lempiras per
gallon (about USD 2.50),or a savings of USD 0.50 over normal
diesel. The company's cost of production is 11
Lempiras/gallon (about USD 1.05). According to multiple
company employees no/no vehicle modifications were required.
Half the company's power generation needs are met with the
remaining biodiesel. However, even if Aguafinca is able to
expand production as planned, Snir said the company could
possibly provide fuel for the nearby town of Yojoa, but that
would be all. Aguafinca currently holds a two-thirds market
share of tilapia in Honduras. Even if they were to expand
production up to 50 percent (the current maximum plant
capacity) and share the technology with their competitors,
the amount of excess biodiesel produced would double at best.
Biodiesel from tilapia, while sufficient for Aguafinca, is
not the solution to Honduras' energy needs.


--------------
Protecting the Lakes
--------------


5. (U) Since water quality affects the taste of the fish
and health of the consumer, Aguafinca pays attention to
vegetation surrounding Yojoa and Cajon lakes, where the
tilapia are raised. The principal concern is illegal
logging, since a healthy forest filters incoming water and
protects against erosion and mudslides. The company provides
instruction, technology and financial resources to the local
community to raise tilapia. In return, the local communities
protect the forest. Aguafinca hires all its employees from
the surrounding towns and educates both the employees and the
communities about the importance of preventing illegal
logging.

--------------
Export Oriented Business Model
--------------


5. (SBU) Located in a Honduran "tax free zone," Aguafinca
does not pay Honduran import duties or income taxes. In
return it is required to export at least 95 percent of its
production. In practice, virtually all its product is
exported to the United States. Current plant capacity is 1.6
million pounds of fresh (never frozen) tilapia per month,
with actual production of 1.1 million pounds. This makes
Aguafinca the largest fresh tilapia producer in the world,
according to the company. Aguafinca sells to Costco and
major U.S. supermarkets.


6. (U) Snir said competition from China had prevented
Aguafinca from increasing production as much as planned. He
said Chinese companies had a cost advantage and employed a
number of techniques that Aguafinca refuses to copy,
including the use of carbon monoxide to add red color to the
fish, injection with chemicals to make the fish meat retain
25 percent of its weight in excess water, and labeling the
fish as "Fresh Fish, Previously Frozen." Snir is hopeful
that some U.S. supermarkets may drop Chinese tilapia given
recent concerns about production techniques.


7. (U) Most of Aguafinca's product is shipped by air to the
U.S., though it recently began to ship tilapia by sea to
Miami. Snir also mentioned that it would be helpful to use
the joint Honduran / U.S. Soto Cano Air Base for air
shipments during the few days that San Pedro Sula airport is
closed due to low visibility due to slash-and-burn
agriculture.

--------------
Comment
--------------


8. (U) Honduras may be the only country in the world making
biodiesel from tilapia. This technology has allowed one
mid-size company to run it's vehicle fleet, and provide half
of it's power generation needs, on biofuels. Further
effeciency gains may be possible with second-generation
biodiesel production technology, and a limited expansion in
production expansion may be economically justified. Even so,
biodiesel from tilapia, while an interesting technology, is
not likely to make a substantial contribution to meeting
Honduras' energy needs in the foreseeable future.
FORD