BIOFUELS company D1 Oils is to raise £48.7m with a share placing, part of which will be used to nearly treble the size of its Teesside site, creating about 15 jobs.

The Teesside group said the money, which could increase by £9.35m with the placing of future shares, would be invested in plant science and crop production and the expansion of its refineries in Middlesbrough and on Merseyside.

D1 is to increase the production capacity of its Teesside biodiesel plant, which produces 32,000 tonnes of fuel a year and employs about 65 people, by another 60,000 tonnes.

Together with its planned renewable fuels site at Bromborough, in the North-West, the group expects to produce 420,000 tonnes of biodiesel by the end of 2008.

D1 said that a substantial portion of the money raised would be invested in plant science and the growing of oil-bearing jatropha crops, which are used to make the fuel, at plantations in Asia and Africa.

Yesterday, D1 announced its intention to place 29,484,848 shares at 165p each, raising £48.7m before expenses. The move is expected to be approved at a meeting on December 28.

A spokesman said: "This will allow us to pursue our next stage - a substantial portion of that is in agronomy (crop production), but we are also investing in our refineries.

"Some of that is in our plans to increase the refinery capacity of Middlesbrough, which, as a result, will create about 15 jobs."

The group, which has its global headquarters in Middlesbrough, also has the option of placing a further 5,666,667 shares at a minimum of 165p a share, raising at least £9.35m.

D1 Oils chairman Karl E Watkin said: "The outcome of this placing and the significant levels of interest shown by the investment community demonstrate the market confidence in the company and its strategy to build a leadership position in the global biofuels industry."