A Singaporean firm sealed a memorandum of understanding Wednesday with a Vietnamese sugar company to build an ethanol factory in the southern Tay Ninh province.

Under Fair Energy Asia’s agreement with the Bien Hoa Sugar Company, the factory would be designed to produce 50,000 tons of ethanol a year in an industrial park in Chau Thanh district.

The two companies will contribute equal capital to the project but they did not disclose the facility’s proposed total cost.

The factory will be fed by molasses obtained from processing sugarcane and cassava, of which Tay Ninh is the biggest national producer.

In other news, Japan's Itochu Corp. and state-run PetroVietnam subsidiary Petrosetco have signed a deal to build a US$100 million biofuels facility in Ho Chi Minh City’s Hiep Phuoc Industrial Park.

The facility, which would use tapioca chips to make the ethanol, is slated to open in 2009.

It is expected to produce 100 million liters of ethanol annually. The product will be sold in Vietnam to supply the manufacturing and transportation industries.

The new factory is expected to meet 10 per cent of existing demand for E10 – a fuel made of 10 percent ethanol and 90 percent gasoline – in the country. (VNA, Thanh Nien)