Tokyo-based Itochu Corporation was one of the first to invest in the Vietnamese biofuel industry, but it is now attempting an early departure by bargaining away its entire stake of an ethanol fuel manufacturing plant when the facility has yet to start commercial operation.

The Japanese corporation holds a 49 percent stake of the Phuong Dong Biofuel Co Ltd, set up to operate an ethanol plant based in southern Binh Phuoc Province.

Other shareholders include Vietnam’s oil giant PV Oil, which owns a 29 percent stake, and mechanics firm Licogi 16, which possess 22 percent of the company.

Phuong Dong Biofuel Co Ltd obtained the investment license for its US$84 million project from Binh Phuoc authorities as early as May 2009, and the facility has been on a trial run since early last year.

The plant, which is capable of producing 100 million liters of ethanol fuel per year, is expected to embrace a national program in which the country will switch to using biofuel.

But the plan has been repeatedly delayed. It is not until the end of next year that ethanol fuel will be used in seven major cities and provinces, while the current biofuel facilities are suffering steep losses.

Phuong Dong Biofuel Co remains on a trial run instead of beginning commercial operation as there is little demand from the domestic market, while exporting the product would only bring losses, its director Nguyen Huu Khoa told Tuoi Tre.

The company’s annual losses have amounted to nearly VND270 billion, including operation and maintenance costs and bank loan interests.

This is what prompted Itochu to attempt to get rid of its Vietnamese project.

Itochu began to seek buyers for its 49 percent stake in the project last year, when it learned of the news that E5 fuel, a blend of 5 percent ethanol and 95 percent gasoline, can only be officially marketed in December 2014.

The Japanese investors criticized that the timeframe is too late compared to the previously expected 2013 mark. Even worse, many fuel wholesalers are fighting to delay it by another year, to December 2015, to protect their sale of A92 and A95 gasoline.

But it is not easy for Itochu to complete its sellout, even at a price that is only 35 percent of what it invested in the project.

Both PV Oil and Petrolimex, Vietnam’s largest fuel wholesaler, refused to acquire Itochu’s stake, saying they already have other losses they must handle.

Licogi 16, which has sunk more than VND90 billion into the company as of the end of the second quarter, has also considered divesting from the project.