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FutureFuel Corp (FFU)

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Friday 19 January, 2007

FutureFuel Corp

Biodiesel Capacity Increases

FutureFuel Corp
19 January 2007




          THIS ANNOUNCEMENT IS NOT FOR RELEASE INTO THE UNITED STATES.

THE FOLLOWING DOES NOT RELATE TO AN OFFER OF SECURITIES FOR SALE IN THE UNITED
STATES. THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE 'SECURITIES ACT'). THE SECURITIES MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO U.S. PERSONS EXCEPT
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.



                                FUTUREFUEL CORP.

            Delay in Implementation of Biodiesel Capacity Increases


FutureFuel Corp. (the 'Company') announced today that it has delayed its planned
expansion of biodiesel production capacity at its Batesville, Arkansas plant.
The plant is currently capable of producing 24 million gallons of biodiesel per
year. As announced on October 6, 2006, the Company planned to increase that
capacity to 40 million gallons per year by May 2007 and to 160 million gallons
per year by November 2007, with substantial complementary expenditures on
infrastructure to support this increased capacity.

Since closing on its acquisition of the Batesville plant on October 31, 2006,
the Company and, to the Company's knowledge, the industry as a whole have
witnessed a rapid erosion in margins for producing biodiesel. The spot price of
soybean oil (the primary feedstock for biodiesel in the U.S.) has increased
approximately 2c per pound (14.8c per gallon) while the spot price of diesel
fuel has decreased approximately 10.75c per gallon. Futures prices of diesel
fuel have decreased even more. This has resulted in a total reduction in
biodiesel margin of over 25c per gallon since closing. The margin reduction has
been substantially greater when compared to October 6, 2006, the date that the
Company initially announced its intentions to expand the plant capacity.

As a result of these decreased margins, the Company has determined that it is
not in its shareholders best interest at this time to proceed on an accelerated
basis to increase capacity. The Company does intend to continue with certain
core infrastructure projects, including additional storage capacity, expanded
rail lines, improved rail loading and unloading stations, methanol recovery and
glycerine refining. These projects are expected to bring efficiency, operational
flexibility and cost savings to the existing biodiesel and chemical business
lines. Until such time as industry conditions again warrant a substantial
investment in capacity expansion, the Company will remain one of the larger
biodiesel producers in the U.S. Furthermore, through its infrastructure
expansion and its continuing research and development efforts in the biofuels
area, the Company will be well positioned to respond quickly to changing market
conditions.

The Company believes the decrease in biodiesel margins is an industry wide issue
and is not exclusive to the Company or its Batesville plant. The Company's
current biodiesel production is substantially hedged and the Company enjoys
advantaged feedstocks through most of 2007 at the current production capacity of
24 million gallons per year.

The Company's common stock is traded on AIM under the symbol FFU and its
warrants are traded on AIM under the symbol FFUW.


Enquiries:
Lee Mikles, CEO        FutureFuel Corp.              +1 805 565 9800

Adam Hart/             KBC Peel Hunt Ltd             +44 20 7418 8900
Matt Goode


The statements and discussions contained in this announcement that are not
historical facts constitute forward-looking statements, which can be identified
by the use of forward-looking words such as 'believes,' 'expects,' 'may,'
'intends,' 'anticipates,' 'plans,' 'estimates' and analogous or similar
expressions intended to identify forward-looking statements. The Company wishes
to caution the reader of this announcement that these forward-looking statements
and estimates as to future performance, estimates as to future valuations and
other statements contained herein regarding matters that are not historical
facts, are only predictions, and that actual events or results may differ
materially. The Company cannot guarantee that any future results described in
this announcement will be achieved, and actual results could vary materially
from those reflected in such forward-looking statements.

Information contained in this summary has been compiled by the Company from
sources believed to be credible and reliable; however, the Company cannot
guarantee such credibility and reliability. The forecasts and projections of
events contained herein are based upon subjective valuations, opinions and
analyses.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
                                                                                                                                                                                                                                     

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