Multinational food, ingredient, and retail group, Associated British Foods (ABF) has declared a £98 million write down on Vivergo Fuels, its bioethanol joint venture with BP and DuPont in the UK, because of a weakening of the euro against sterling, and falling crude oil prices. Global oil prices have fallen to half of what they were over the past eight months, landing at below $50 per barrel for Brent crude oil and below $48 per barrel for U.S. crude oil. At the same time the euro has fallen to an 11-year low against the dollar in January after the recent elections in Greece. Greece’s Syriza-led government has pledged to renegotiate its bailout with Brussels, leading to unease over the possible undermining of the euro if Greece defaults.
Once at full capacity, Vivergo will be the UK’s biggest producer of bioethanol, and although market conditions have been termed as being ‘extremely challenging’, shareholders remain supportive and Vivergo pledges that it will maintain efficiencies, and ensures operations across its business.
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