Associated British Foods has announced plans to build a GBP200m (US$399.8m) biofuel plant in the UK.

The company, which owns grocery brands including Twinings tea and Kingsmill bread, will hold a 45% stake in the venture. BP will hold an identical stake with US chemicals group DuPont holding the remaining 15%.

The plant will produce bioethanol at BP's chemicals site at Saltend, Hull. The plant will produce 330,000 tonnes of bioethanol a year. ABF said it expects to make a return on the site, which is expected to be up and running by 2009, in the first full-year of operation.

The move is ABF's latest venture into bioethanol production. The company's British Sugar arm has also moved to build a plant in Norfolk.

ABF chief executive George Weston said: ""This exciting project will make ABF the major producer of biofuel in the UK. Its announcement reflects our confidence in our sugar and agricultural businesses, in our partners BP and DuPont and in the Government's commitment to biofuel production."