DDGS

Dried Distillers Grain and Solubles or DDGS is a by-product of bioethanol production from maize, wheat, triticale, rye and grain sorghum and is currently sold in the US and Europe as animal feed. It is typically used to replace maize and soya meal in the animal diet. DDGS has about three times the protein content and the same energy levels as the original grain feedstock. Only the starch has been converted to ethanol and as such this is a valuable animal feed with high protein content.

Consequently, it receives a price in the animal feeds market of between 0.80 and 1.2 times the maize (corn) price. The South African animal feed market comprises approximately 7.3 million tons per annum. It is anticipated that DDGS will replace yellow maize in the animal feed market in South Africa as per international experience, and that the market will be capable of absorbing the entire production capacity of 107 00 tons per annum.

Mabele Fuels has entered into proposed off-take agreements (Sale of DDGS Agreement) The Sale of DDGS Agreements for the sale of the DDGS is for an ethanol plant in Bothaville and will come into effect once the plant is in operation. The proposed agreements will endure for a fixed period of three years.