Table of content
_______________________________ manufactures
biodiesel, renewable fuel from vegetable oils, in _________________________.
Purpose of the business plan is to attract financing into creation of biodiesel
production plant. We offer
fuel with the same performance as that of conventional diesel, at competitive
price and ecologically safe. Our markets expand rapidly all over the world due
to growing ecological concerns and limited energy supply. Our target customers
located in _____________________. Our team’s
skills cover all aspects of creating and managing the biodiesel production
project: organizing, financing, auditing, marketing, promoting business,
solving technical and organizational problems. The capacity
of the plant is ________________ gallons per year, the full capacity is
intended to be reached by the end of the fifth operational year. By that time
we plan _____________ $ turnover,
producing ___________
$ net profit and positive
cash flow of _________________ $. To
reach these goals, we need
_______________________ $ investment
to buy land, processing equipment, and finance working capital. 1.1.
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·
It is
a perennial crop, i.e. a tree, and thus requires far less fertilizer and
chemicals than annuals and qualifies for CERs
·
It can
provide additional income to rural communities in the tropics
· It can be used as a support for climbing
plants such as vanilla, etc., which augmenting its income potential
3.2.3. Rape oil.
Rapeseed oil now makes up
between 80%–85% of the EU biodiesel. Prices for Rape have been falling for the
last 2 years, because of record harvests, see the graph below. But it is
unlikely that these records would be repeated, and increase of demand worldwide
will keep prices higher. We expect average market price for Rape in 2006 – $250
per tone, and average price for Rape oil – $670 per tone, depending on season
(fall prices are usually lower than spring ones.
3.2.4. Palm oil.
The world largest suppliers of
Palm oil are
The strong growth in Palm oil consumption
over the last six years has resulted in Palm oil being the dominant oil in the
global market. As Soybean oil prices began to rise in 2001-02, the spread
between Palm oil and Soybean oil began to widen, increasing the competitiveness
of Palm oil in the world market. Since 2001-02, Palm oil consumption has
increased 13.2 million metric tone, compared to an 8.7 MMT increase in Soybean
oil consumption. This lower price, compared to other major oils, primarily
Soybean oil, has given Palm oil a competitive advantage in both these large oil
consuming countries. The rising trend is attributed also to making Trans Fatty
Acid (TFA) label effective in the
3.2.5. Soybean oil.
Soybean oil shipments are estimated to remain
unchanged, thus accounting for a lower share of total trade of oil seeds than
usual[4], with current trend
of gradual price increase for soybean oil futures[5]:
Date |
Price , cents per lb. |
March |
30.22 |
May |
30.59 |
July |
31.1 |
Conclusion: we proved in the plan
the following purchasing prices of raw materials:
-
Used cooking oil –
-
Jatropha oil-
Other important costs are
costs of raw materials, chemicals and energy: 1 ton of oil plus 0.12 ton of
methanol plus 0.01 ton of KOH. Please refer to Table 4 for summary. Energy
requirements were estimated under assumption that with technologically advanced
plant we need approx. 20 liter of biodiesel as energy to produce
1 ton of biodiesel. For other costs
please see Profit and loss statement.
Table 4. Costs per ton
calculation, USD.
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3.4. Future Products and Services
Glycerol is a by-product of our
technological process, but it needs further cleaning. The company is looking
into the installation of glycerol processing equipment. As the equipment requires an additional
investment and the Company wants to remain focused on the production of quality
Biodiesel as a flagship product, this investment might be forgone in the
immediate future.
3.5. Technology
The process of converting vegetable oil into
biodiesel fuel is called transesterification or neutralizing the free fatty
acids in oil, removing the glycerol, and creating an alcohol ester. This is
accomplished by mixing methanol (wood alcohol) with lye (sodium hydroxide) or
potassium Hydroxide, to make sodium (or potassium) methoxide. This liquid is
then mixed into vegetable oil. The entire mixture then settles. Glycerol is
left on the bottom and methyl esters, or biodiesel, is left on top. Finally,
the methyl esters is washed, filtered and refined.
Schematically, it can be described as follows
(see also Exhibit 2 Technology process):
100 kg of oil +
15 kg methanol + 1 kg KOH (or NaOH)
=
100 kg biodiesel
(methyl esters) + 10 kg (impure) glycerol
In case you use hydrodynamic cavitation
To carry out this chemical reaction, we use
innovative 2 stage hydrodynamic cavitation technology, which lead to more
effective biodiesel production process. Please refer to chapter Process
advantages for more detailed explanation of this effectiveness.
Chemical reaction in this manufacturing
process carries out on a molecular level.
All components inside of reactor are subjected to high pressure impulses
and advanced controlled hydrodynamic cavitation. While processing vegetable
oils with necessary components in reactor the molecules of fatty acids are
broken apart with micro explosions; it results in viscosity decrease, cetane
number increase, power parameters of
produced fuel improve and reaction takes shorter time (seconds versus one to
two hours in conventional technologies).
The final stage of the reaction is
performed in the cavitation pump HD. Intensive cavitation processes in the
hydrodynamic mixer and the cavitation pump lead to breakdown of fatty acid
molecules, which also significantly increases reaction speed and improves
quality of the fuel.
Fig.1.
Biodiesel fuel production system
Process description:
Vegetable
oil from the vessel 1 via mesh filter F1, flow heater PPÌ is fed to the hydrodynamic mixer ÑGD with H1 pump.
Oil flow is controlled
with the flowmeter P1. A pre-mixed solution of the catalyzer in methanol is fed
from vessel 3 to the vacuum chamber of the hydrodynamic mixer through the BP
regulator valve and the flowmeter P2. The solution mixing is performed by the
H2 pump. The solution is taken from vessels 3 in turn. The first stage of the
peretherification reaction is performed in the hydrodynamic mixer.
The
final stage of the reaction is performed in the cavitation pump HK. Intensive
cavitation processes in the hydrodynamic mixer and the cavitation pump lead to
breakdown of fatty acid molecules, which significantly increases reaction speed
and improves quality of the fuel.
After
the cavitation pump, the mixture goes to the settling columns 4, where it
separates into biodiesel and water-glycerin mixture. The fuel is discharged via
FÂÎ moisture separator filter by the pump H3.
4.2. Market prices.
Current price difference between diesel and
biodiesel is about 11 euro cents per liter: price of diesel on gas-station is 1.11 Euro (1.44 USD) per liter incl. petroleum tax, compared with
1 Euro (1.3 USD) / liter for biodiesel. We do not expect significant price changes
(see graphs below) in the future and plan selling price in this project $852 /
ton.
Graph
2. Biodiesel prices trends. (Source: UFOP)
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4.3. Competitors.
Here are your local competitors
4.4. Sales and marketing strategy.
The Company
will target operators of fleet and transportation companies.
Geographically,
the company will initially concentrate ________ .
To insure
rapid growth, the company plans to sell Biodiesel distributors at a small
discount compared to regular diesel. In the first 3 years, the Company's output
is expected to grow in accordance with the growth of the export market (around
30% yearly). The Company plans to start producing about _________- metric tons
per month in the first _______ months of operation. This output will be increased by .
5. Project competitive advantages are based on:
-
process advantages (see above for detailed explanation
of utilized technology);
-
product advantages;
-
company advantages.
5.1. Process advantages.
There is latest invention in
biodiesel production. But you may mention your supplier as a leading one or
smth like that. There should be advantages, otherwise project is uncompetitive.
Our technology employs “hydrodynamic cavitation”, an industrial phenomenon, produced by pressure variations
and obtained using the geometry of the system creating velocity variation.
Cavitation itself perceived as “a technology of future”[9];
use of cavitation in chemical processes reduces reaction time, increases
reaction yield and decreases consumption
of energy.
The conventional
techniques of biodiesel production typically utilize temperatures in the range
of 70 to 200°C, pressures in
the range of 6 to 10 atm and reaction times of up to 70 hours for achieving
conversions in the range of 90 to 95%based on the type of raw material used
(usually mixtures of fatty acids obtained as waste). Use of hydrodynamic
cavitation decreases reaction time and temperature to 70 min. and 30C
respectively[10]. So, use of cavitation reactor for
production of biodiesel allows save up to 10 times on electricity.
5.2. Product advantages.
In
ecologically sensitive segments and at equal pricing, Biodiesel will have a
competitive advantage against regular Diesel. Advantages of our Biodiesel are
based on it’s quality and costs. To illustrate product quality, we compare major
indicators of biodiesel manufactured with our technology (column Utilized
technology) and industry standards. Obviously,
manufactured product meets the highest industry standards and can be supplied
at the lowest possible costs.
Table Parameters of manufactured biodiesel.
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5.3. Company advantages.
Your company advantages
6. Management and personnel.
The starting project headcount is ___________employees
with future increase to _____________, see table Personnel plan. Our team members and their resumes listed
below; all team members have required experience and qualification to start and
manage the project.
6.1.Key members of management team:
resumes
We expect to start sales at ____________. Direct cost of sales includes costs of
purchased vegetable oils. All other costs indicated in income statement. All assumptions behind sales forecast were
explained in chapter Sales and marketing strategy.
8.
Financial Planning - does not make sence to present statements here, - please use this spreadsheet to make relevant calculations
Financial projections are
based on sales forecast. We do not expect changes in biodiesel production
technology which would make our product uncompetitive, because we are already
on leading position of this technology and plan developing it in future.
Offered technology is also protected by patents.
8.1. Project Financing
Summary of start-up
requirements presented in the table below.
laboratory unit 132 gal/hour) to be financed
by loan.
Annual
Break-even, plants to be sold |
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Assumptions: |
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Average
Per Plant Revenue |
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Average Per
Plant Variable Cost |
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Estimated
Annual Fixed Cost |
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Table 7. Profit and Loss Report
8.4. Projected cash flow
Cash collection period is approx. 1 quarter so we do not plan
outstanding bills at the end of year.
8.5. Sensitivity analysis.
In this project we used
assumptions proven by market analysis and research. However, we created also 2
scenarios with different assumptions. Summary of all scenarios show on the
table below.
9. Risk Management:
The
major type of business risk identified by the company is related to the
continuity and cost of raw materials. Explain in your risks
10. Future Plans.
As part of
its expansion plan, the company will be involved in R&D related to the
field
11. Exit Strategy
The Company's goal is to ____________
[1] Five tons of jatropha oil seeds can produce two tons of biodiesel.
[2] http://asia.news.yahoo.com/050505/3/20hjl.html
[3]
[4] Financial Express:
[6] http://www.greencarcongress.com
[7] UFOP: http://www.ufop.de
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