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Green product ideas for export
AMITY SCHOOL OF BUSINESS, NOIDA
o Sachin Sharma(E-44
Hans Khari (E-22) Dhruv Tayal(E-18)
o Siddhant SahniE-48)
The following project has been prepared on new green product ideas under the subject of INTERNATIONAL MARKETING. A great amount of efforts have been used to bring a contrast on this area. We feel it to be our sincere duty to express our deep sense of gratitude to those who inspired and helped us to conduct the study with knowledge and expertise. We express our inner gratitude to the AMITY SCHOOL OF BUSINESS, Noida for providing us an opportunity to work on innovative field and preparing this report. We would like to acknowledge our sincere gratitude and respect to Mrs. RUCHI KHANDELWAL, our Faculty guide-International Marketing, BBA Department, ASB. We would like to thank:
o o o IFFCO, AONLA (MARKETING DEPARTMENT) HINDUSTAN PETROCHEMICALS, NOIDA (MARKETING DEPARTMENT) BHARAT HEAVY ELECTRONICS, NOIDA (Assistant Technical MANAGER)
As under their guidance we got aware about the various system and procedures which took while trading bio-chemicals or compounds. They guided me with norms, certain laws and how can we decide which product is marketable and which is not. And lastly we thank everyone who helped us in making this report. Thank you
ACKNOWLEDGEMENT....................Error: Reference source not found PROJECT: GREEN PRODUCT IDEAS FOR EXPORTS......Error: Reference source not found BACKGROUND:.............................Error: Reference source not found PROJECT BRIEF:............................Error: Reference source not found BGSL- BioGreen Solutions limited..Error: Reference source not found GREEN PRODUCT CHECKLIST.........Error: Reference source not found BLENDING OF BIO-DIESEL.............Error: Reference source not found PRODUCTION OF BIO-DIESEL: PROCEDUREError: Reference source not found PROCESS OF BIO-DIESEL PRODUCTION....Error: Reference source not found Supply base and Manufacturers....Error: Reference source not found LEADING BIO-DIESEL PRODUCING NATIONS:. .Error: Reference source not found Bio fuel certification:....................Error: Reference source not found Export of Bio Diesel- THE UNITED MEXICAN STATES..Error: Reference source not found EXPORT to-NAFTA (NORTH AMERICAN FREE TRADE ASSOSCIATION) ...................................................Error: Reference source not found
EXPORT OF BIO-DIESEL- THE BOLIVORIAN REPUBLIC OF VENEZEULA ...................................................Error: Reference source not found Marketing mix.............................Error: Reference source not found PRICING OF BIODIESEL.................Error: Reference source not found TRANSPORTATION OF BIODIESEL. .Error: Reference source not found Promotional strategies.................Error: Reference source not found Future Promotional Strategy of BGSCL. . .Error: Reference source not found Bio Diesel in India is virtually a non-starterError: Reference source not found Corporate Strategy Suggested for Big Indian Companies..........Error: Reference source not found FEASIBILITY ………………………………………………………………………………………………………… …………..Error: Reference source not found
PROJECT: GREEN PRODUCT IDEAS FOR EXPORTS
BACKGROUND: Depending on the nature of the product itself, raw materials used or manufacturing process, the term ‘Eco-friendly’ lends itself to multiple connotations: a. Resource-saving or contamination-control products: These include energy-saving electrical appliances or air-purifiers, the use of which directly benefits the environment. b. Organic materials: Examples include garments made from organic cotton (cotton grown in a chemical free ambience - without the use of pesticides and chemical fertilisers) and re-usable cotton shopping bags that substitute plastic bags. c. Cleaner manufacturing processes: These refer to manufacturing processes that have become more energy efficient or less contaminating and hence the end-product is deemed as eco-friendly. It must be noted that Eco-friendliness is a relative term. A regular cotton bag is ecofriendly. If it is made from organic cotton, it becomes eco-friendlier. The manufacturing of gypsum boards (used in the construction industry) releases a lot of contaminants. New production methods have reduced the level of contamination but not eradicated it completely – yet the output from the new process may be deemed as eco-friendly.For the purpose of this project, we will construe eco-friendliness in its broadest sense. The project is also not limited to any specific industry. Products that do not meet green requirements currently but can be adapted to meet a green criterion are of particular interest. New product ideas are more critical than identifying products that are already being exported in bulk and do not present a unique opportunity. PROJECT BRIEF: Identify and analyze green products (or services) that are exportworthy. Specific issues that need to be analyzed are: a. What makes these products green? Are they commercially viable for exports, after factoring freight costs & customs duties? b. Is the supply base for these products stable? Who are the manufacturers? What is their production capacity? c. Current export destinations, volumes of exports and price indications? d. Do such products require certification from importing countries? Can suppliers provide such certifications?
e. Is there a direct or indirect substitute of this product? Are substitutes being manufactured in other countries? If yes, can Indian manufacturers sustain their export competitiveness? f. How are manufacturers marketing these products?
BGSL- BioGreen Solutions limited
BGSPL’s mission lays down following aspect: We at Bio-Green Solutions believe in products that are manufactured with
all of the eco friendly materials that can lend to durability, comfort and performance gear and outdoor wear without compromising these purposes. After all, durable eco friendly outdoor wear and gear that can be reused over and over again promotes sustainability. And if eco friendly outdoor wear can be recycled at the end of its term, it makes it an investment for the planet. BGSL’s Approach • Green Products may seem to be odd or depict low business opportunities .But in the long run; we all have to find substitutes for the current product lines. The products currently being used are exhaustible and very limited in quantity. To achieve our mission, BGSPL’s understands corporate responsibility, undertakes several activities covering a broad spectrum of areas to promote welfare of business associates and customer’s. The activities envisaged to be covered are exhaustively defined in BGSL’s Bye-laws.
Our thirst for ever improving the services to customer’s and business associates is insatiable, commitment to quality is insurmountable and harnessing of mother earths' bounty to drive hunger away from India in an ecologically sustainable manner is the prime mission. All that BGSPL’s cherishes in exchange is an everlasting smile on the face of International consumer who forms the moving spirit behind this mission.
BGSCL is a multinational company. The operations and Production of Bio-diesel will be carried out in two nations. These are: REPUBLIC OF VENEZUELA
THE UNITED MEXICON STATES, We will produce Bio-diesel in these two
nations Reasons for Selecting Venezuela It is the seventh largest producer of crude oil whereas sixth largest exporter of oil. Economic Policies are flexible enough and our company will work as per norms and standards of the legislative body. It has good relation with Latin America and United States. It will give us Price competitiveness because of cheap raw material. From Venezuela we will export Bio-Diesel to Sothern American nations in PhaseI. But as our production will increase in upcoming years we will target European Unions, African nations and Asian countries. Reasons for selecting MEXICO Mexico is the fifth largest producer and tenth largest exporter of crude oil. It is a member of NAFTA(NORTH AMERICAN FREE TRADE NATION) United States and Canada have high demand for Bio-diesel which we can meet. We will somewhat adversely affect exporters from European union. They are currently the biggest exporters to this nation. No tariff barriers within the area It is a newly industrialized country It has twelfth largest in economy in terms of GDP The entire Energy Production of Mexico comes under Federal Commission of energy. But it allows companies to produce crude oil, obtain petroleum products and convert them to Bio-diesel.
They are aiming at Sustainable environment.
GREEN PRODUCT CHECKLIST
MANUFACTURER: Bio-Green Solutions Cp-operative Product: BIODIESEL Biodiesel refers to a non-petroleum-based diesel fuel consisting of short chain alkyl (methyl or ethyl) esters, made by transesterification of vegetable oil or animal fat (tallow), which can be used (alone, or blended with conventional petrodiesel) in unmodified diesel-engine vehicles. Biodiesel is distinguished from the straight vegetable oil (SVO) (sometimes referred to as "waste vegetable oil", "WVO", "used vegetable oil", "UVO", "pure plant oil", "PPO") used (alone, or blended) as fuels in some converted diesel vehicles. "Biodiesel" is standardized as mono-alkyl ester and other kinds of diesel-grade fuels of biological origin are not included. BASIC GRITERIA FOR GREEN PRODUCTS (ECO-FRIENDLY)
a. Resource-saving or contamination-control products: These include
energy-saving electrical appliances or air-purifiers, the use of which directly benefits the environment.
b. Organic materials: Examples include garments made from organic
cotton (cotton grown in a chemical free ambience - without the use of pesticides and chemical fertilisers) and re-usable cotton shopping bags that substitute plastic bags.
c. Cleaner manufacturing processes: These refer to manufacturing
processes that have become more energy efficient or less contaminating and hence the end-product is deemed as eco-friendly. SPECIFIC CRITERION FOR GREEN PRODUCTS
1. SUSTAINABILITY: Is there a written, working environmental
policy in place? Products come under this category only and if they meet norms and standards of an individual nation. It is important that
during International Trade other country looks and makes and effort to comprehend the product. There are Different environmental policies .These are in written form .If a product abides by the policies it is termed as a GREEN PRODUCT.
2. USAGE: Does this policy strive to make important
improvements in manufacturing, reducing and reusing first, then recycling? This includes lots of things. It begins from the initial stages i.e.; manufacturing and ends after the product is disposed. It talks about reducing pressure on existing resources and using them a bit more judiciously.
3. TESTING: Do they comply with their industry’s voluntary testing
programs? There are certain policies, standards and norms of any industry. Labelling a product requires various types of test and hence it becomes a crucial stage.
BLENDING OF BIO-DIESEL
Blends of biodiesel and conventional hydrocarbon-based diesel are products most commonly distributed for use in the retail diesel fuel marketplace. Much of the world uses a system known as the "B" factor to state the amount of biodiesel in any fuel mix fuel containing 20% biodiesel is labelled B20, while pure biodiesel is referred to as B100.It is common to see B99, since 1% petrodiesel is sufficiently toxic to retard mold. Blends of 20 percent biodiesel with 80 percent petroleum diesel (B20) can generally be used in unmodified diesel engines. Biodiesel can also be used in its pure form (B100), but may require certain engine modifications to avoid maintenance and performance problems. BGSCL BLENDED BIO-DIESEL BLENDED BIO-DIESEL produced by our company has different labels i.e. • 20 % BIO-DIESEL(B 20)
B 20 is a bio-diesel that blends 20 % of bio-chemical with 80 % of petro-diesel. This will be used in for following: AUTOMOBILES : MINI CARS,SUVs, TRACTOR,MINI-TRUCK 9
ENERGY PRODUCTION GENERATORS DOMESTIC SUPPLY
40 % BIO-DIESEL
B 40 is a bio-diesel that blends 40 % of bio-chemical with 60 % of petro-diesel. This will be used in for following: AUTOMOBILES : MINI CARS, SUVs, TRACTOR, MINI-TRUCK ENERGY PRODUCTION, GENERATORS and DOMESTIC SUPPLY
75 % BIO- DIESEL
B 75 is a bio-diesel that blends 75 % of bio-chemical with 25 % of petro-diesel. This will be used in for following:-
ENERGY PRODUCTION SMALL –SCALE INDUSTRIES DOMESTIC SUPPLY
100 % BIO-DIESEL
B 100 is a bio-diesel that blends 99.2 % of bio-chemical with .8 % of petrodiesel. This will be used in for following: GOBAR-GAS PRODUCTION SMALL –SCALE INDUSTRIES DOMESTIC SUPPLY
EXAMINING THE PRODUCT’S COMPOSITION
This is done to label a product as a “green product”. We have a general methodology used by certain industries to accept a product which would result in Sustainable development. S.NO. 1 CHECKLIST PRODUCT ATTRIBUTE
What are the raw materials BIO-DIESEL is a resource-saving GREEN used to create the product? PRODUCT hence: Diesel is the main component. But it is blended with bio molecules or biochemical that helps us in reducing burden on existing petroleum product. And where do they come Bio-chemicals come from cultivation of from? culture, farm products and through vegetative propagation. Did the materials come from Yes, the blended bio-diesel is renewable resources? characterised by products that are renewable source of energy. Is the manufacturing process Yes, the process is energy efficient. energy efficient? Does the manufacturing Since blending is done with natural process release harmful product , residuary is used as manures substances? in fields.
Are adhesives needed to No. make the product viable?
Are coatings or finishes No. needed to make the product viable?
EXAMINE OTHER ASPECTS OF THE PRODUCT S.NO. 1 CHECKLIST PRODUCT ATTRIBUTE is altogether a different
Does the product nurture Bio-Diesel
the health and well-being of product. It affects occupants indirectly. its occupants? But, it is still far better than petroleum products. 2 3 4 Does the product do the job Yes well? How much energy does it It uses very less energy but very time use? consuming. Does the product release Volatile organic Compounds are released VOCs? At what rate? both at manufacturing and while product is used. But it is 35% less than normal petroleum product. How is the product Pipelines packaged and transported? Can the maintained manner? product be Yes in a benign
Using safe products?
cleaning Yes, the company is emphasizing on using only those product that do not harm nature
EXAMINE STRATEGIES FOR DISPOSAL S.NO. 1 2 3 4 CHECKLIST PRODUCT ATTRIBUTE bio-
Is the product durable? Product is durable, partly Biodegradable? Recyclable? degradable and recyclable. Can the parts be separated Yes. for recycling? Can it be made something else?
into It can be made into Bio-Fertilizer and manures.
Can the product be returned NO. to its manufacturer at the end of its useful life?
COST CONSIDERATIONS S.NO. 1 2 CHECKLIST PRODUCT ATTRIBUTE
What is the price range for --the product? Does the manufacturer ---provide life cycle cost analysis on this product?
PRODUCTION OF BIO-DIESEL: PROCEDURE
PRODUCTION of Bio-Diesel or alkyl esters is done by three ways. These are as follows:•
Base catalyzed:-Transesterification of the oil with alcohol. Direct acid catalyzed etherification of the oil with methanol. Conversion of the oil to fatty acids, and then to Alkyl esters with acid catalysis.
The majority of the alkyl esters produced today are done with the base catalyzed reaction because it is the most economic for several reasons: *Low temperature (150 F) and pressure (20 psi) processing. *High conversion (98%) with minimal side reactions and reaction time. *Direct conversion to methyl ester with no intermediate steps. *Exotic materials of construction are not necessary. The general process is depicted below. A fat or oil is reacted with an alcohol, like methanol, in the presence of a catalyst to produce glycerine and methyl esters or biodiesel. The methanol is charged in excess to assist in quick conversion and recovered for reuse. The catalyst is usually sodium or potassium hydroxide which has already been mixed with the methanol.
ALCOHOL FERTILIZ ER GLYCERINE METHYL ESTER
ALCOHOL CATALYST OIL
ALCOHOL-12% CATALYST-1% GLYCERINE-9% Oil-87% METYL ESTER-87%
OIL USED: PALM OIL OR ZATROPHA OIL Palm oil consists of the glycerides of long-chain fatty acids. The carbon chain in these fatty acid residues are comprised of an even number of carbon atoms (typically from 12 atoms (lauric acid) to 20 atoms (arachidic acid) in length) with roughly half of the oil molecules showing some unsaturated carbon-tocarbon bonds. Typically nine major fatty acid residues are found in the glycerides which make up palm oil (see Table 1). Because glycerol is a trihydric alcohol, up to three of these fatty acid residues can be attached to the glycerol structure. But there is no reason to suppose that the three attached to any one molecule are identical. There are therefore many different molecules available for the reaction with methanol in the transesterification reaction which produces the palm-oil methyl esters (POME). And it can be anticipated that due to variable saturation,
variable chain length and steric hindrance within the glyceride molecule that each reacts at a slightly different rate.
Chemical reaction for process:
PROCESS OF BIO-DIESEL PRODUCTION
COMPLETE READY TO RUN BIO-DIESEL PROCESSOR
Diesel has been used to produce electricity. Our various variants can be used in generators to produce electricity.
o Temporary backup petroleum diesel-fuelled generators typically operate in emergencies without the benefit of exhaust aftertreatment to reduce emissions. Using alternative fuels for these necessary backup power sources is a cost effective method of protecting the environment. Fuelled on 100% biodiesel (B100), these generators help reduce emissions compared to petroleum diesel in several key areas. Hydrocarbons, a contributing factor in the localized formation of smog and ozone, and sulphur emissions, a major component of acid rain, are essentially eliminated with the use of B100. The exhaust emissions of carbon monoxide, a poisonous gas, are about 50% lower in biodiesel than carbon monoxide emissions from petroleum diesel. Particulate matter, a human health hazard, is reduced by a third, with the smaller particulates reduced by over two thirds. FARMING Biodiesel on the Farm
Farmers are becoming a strong customer base for biodiesel. Biodiesel provides an opportunity for farmers to create demand for the crops they grow through on-farm use.
o BGSCL has encouraged all farmers to ask their fuel distributors to carry biodiesel in at least a twenty percent blend (B20). Building demand at a grassroots level is critical to the addition of biodiesel to terminals on a large national scale. Although biodiesel is compatible with existing diesel technology, including diesel tanks and other infrastructure, some petroleum distributors may choose to have separate tanks for biodiesel. Adding those tanks now to
meet farmer demand will help ensure that the infrastructure is in place to meet future demand from the general public. MARINE
Biodiesel is an obvious candidate for use in marine applications. Independent tests have found that pure biodiesel is non-toxic, readily biodegradable and essentially free of sulphur and aromatics. Biodiesel will not harm fish. The 96-hr. LC50 (lethal concentration) for Bluegills for C16-18 methyl esters was greater than 1,000 mg./L. Concentrations above 1,000 mg/L are deemed "insignificant" according to NIOSH (National Institute for Occupational Safety and Health) Guidelines in its Registry of the Toxic Effects of Chemical Substances.
Biodiesel may offer safe, practical applications in underground mining applications. Biodiesel is made from renewable fats and oils, such as vegetable oils, through a simple refining process. One of the main commodity sources for biodiesel is soybeans grown worldwide. Biodiesel is safer to use than petroleum diesel. The flash point for biodiesel in its pure form is a minimum of 200 degrees versus about 125 degrees Fahrenheit for regular #2 diesel. Although fires are not a frequent occurrence in mines, they can be devastating and diesel equipment is often involved. Biodiesel can help eliminate that concern.
PASSENGER VEHICLES o Biodiesel blends operate in diesel engines just like petroleum diesel. B20 works in any diesel engine, usually with no modifications to the engine or the fuel system. B20 also provides similar horsepower, torque, and mileage as diesel. o Biodiesel further enhances the advantages of diesel by reducing vehicle emissions. B20 – a 20 percent blend of biodiesel and
conventional diesel – reduces emissions of hydrocarbons by 20 percent and carbon monoxide and particulate emissions by 12 percent. It reduces sulfur on average by 20 percent and is nontoxic and biodegradable. Biodiesel is also a domestically produced, renewable resource that contributes to the U.S. economy and independence from foreign oil.
Supply base and Manufacturers
The supply base for the product is stable. The essential product that company requires is Petroleum Diesel. The main objective hence is to satisfy the supply and demand equation. Other requirements for production of Bio-Diesel VEGETABLE OIL ANIMAL FAT (TALLOW) ALGAE AGRICULTURAL PRODUCTS. So, what we can do is: Controlling the production of critical inputs for Bio-diesel. This our company BGSCL is do through: SETTING UP OIL REFINERIES OFF-SHORES IN MANY PARTS OF THE WORLD 20,000 ACRES OF LAND THAT WILL PRODUCE ESSENTIAL AGRICULTURAL INPUTS. OUR RESEARCH AND DEVELOPING(DEPARTMENT) HAS BEEN MADE POWERFUL AND A VERY IMPORTANT PORTION OF OUR INCOME GOES INTO : DEVELOPING NEW CRITICAL INPUTS CULTIVATING CULTURES. Worlds leading Biofuel companies:
Alcard Chemical Group Inc., New Britain Palm Oil Limited, Pacific Ethanol, Inc., Australian Biodiesel Group (ABG) Limited, Bio-Extraction Inc. Biofutures International plc, BlueFire Ethanol Fuels, Inc. China Clean
Energy Inc., Australian Renewable Fuels Limited, Green Plains Renewable
Energy, Inc., H2Diesel, Kreido Biofuels, Mission Biofuels Limited, NexGen Biofuels, Panda Ethanol Inc., Southridge Enterprises, U.S. Sustainable Energy, Pure Biofuels, Rentech Inc. Syngas International, Diversa Corporation, Earth Biofuels Inc,EOP Biodiesel AG, Ethanex Energy, Inc. Green Star Products, Inc. Imperial Petroleum, Inc. International Fuel Technology, Inc., Methanex Corporation, M.P. Evans Group PLC, US BioEnergy Corporation.
LEADING BIO-DIESEL PRODUCING NATIONS:
S.N O. 1 2 3 4 5 6 7 8 9 10 11 COUNTRY Germany France United States Italy Czech Republic Austria Spain Denmark Poland Spain United Kingdom PRODUCTION (mn ltrs) 1,921 557 284 227 136 85 84 80 80 74 74 PRODUCTION (mn Gallons) 507 147 75 60 36 22 22 21 21 20 20 FEEDSTOCK Rapeseed Rapeseed Soy beans Rapeseed Rapeseed Rapeseed Rapeseed Rapeseed Rapeseed Rapeseed Rapeseed
12 13 14
Brazil Australia Sweden
70 57 7 102 3,762
18 15 2 27 994
Rapeseed Soyabean Soyabean
Other Countries World
Bio fuel certification:
Laws of the World Trade Organization Relevant to the Biofuels Industry Within the emerging Biofuels trade context, three crucial sets of issues concerning the law of the World Trade Organization (WTO) are relevant both for countries that are providing significant amounts of support to their bio-fuel industries as well as countries that would be interested in exporting bio-fuels. These are: • How should bio-fuels be classified – are they agricultural, industrial or environmental goods, and what are the implications of each for WTO members’ obligations? What are the options for reach-in a more uniform classification and for possible trade liberalization? • How should subsidies to promote the production or consumption of Biofuels be considered from the perspective of existing or any planned WTO rules? How should possible “cross-subsidization” (the increase in by-products as a result of subsidies to Biofuel production or consumption)be evaluated? • What is the consistency of domestic regulations and standards—for example, mandates requiring the use of Biofuels or fuel content requirements—with WTO rules on international regulations and technical barriers to trade? This section will also address how WTO rules apply to Biofuels preferences and mandates in public procurement. • What is the consistency of domestic regulations and standards—for example, mandates requiring the use of Biofuels or fuel content requirements—with WTO rules on international regulations and technical barriers to trade?
IBB: INTERNATIONAL BIO-DIESEL BOARD
Produced biodiesel can not be directly supplied to the market. It is supplied to the market through the certified biodiesel producers and contracted importer companies. Importer companies harmonise diesel oil and biodiesel in their warehouse and than supply to the market. Importer companies have to harmonise biodiesel and diesel oil and than sell. Harmonisation has to be realised under control of Custom Office International certification systems have two major elements: 1) Rules that describe needs and performance of the certification and 2) The standards and accreditation procedures The standards define the aim of certification and describe the product or production, Process specific requirements to be fulfilled for certification. Standards are either developed by the highest-level body, i.e. the international panel, or by an expert panel, which is appointed by the international panel. The more generic international standards are often specified for the national level taking specific (national) conditions into account 18 by the help of the national representatives. In the following chapter different kind standards and the process of formulating sustainability standards are described. The most common used certification used for product such as BIODIESEL is AMERICAN SOCIETY FOR TESTING AND MATERIAL I.e. ASTM. Then these products are labelled as D 6751.Where “D” is the product code while the number shows parameters in which quality has been measured. Another important aspect in this is BQ-9000 OBJECTIVES OF BQ-9000 To promote the commercial success and public acceptance of biodiesel To help ensure that biodiesel fuel is produced to and maintained at the industry standard, ASTM D 6751 Program requirements are complementary to ASTM D 6751. These requirements are generic and independent of any specific organization or process
Tells you WHAT...not how Allows YOU to determine level of complexity
SAY what you do! ... DO what you say! Applies to a wide range of company sizes
Who and What are Accredited Two accreditations possible for companies: BQ-9000 Accredited Producer BQ-9000 Certified Marketer BQ-9000 accredits companies, not fuel.
There is no such thing as 'BQ-9000 Biodiesel'
BQ-9000 does, however, help ensure that biodiesel produced and sold will meet D 6751.
To outline a system for monitoring the production of biodiesel to the ASTM D 6751 SPECIFICATION The manufacturer or supplier provides an importing country with the product attribute, product specification, product performance etc. The host nation then collects sample of the product and then subjects it to supervision and nature of the product. SAMPLING Product samples are collected and sent either to laboratories or to some other that will check and measure product attribute and its specification. Here primary objective is to collect maximum samples. TESTING
The Product is then tested through the measures and apparatus that they have to carry out such process. In case of chemical and Hazardous product it is done in well-equipped laboratories. STORAGE Storage varies from product to product. In case of bio-diesel it becomes critically important because it is somewhat volatile in nature and too much humidity affects its quality. RETAIN SAMPLES Some samples are retained for further studies or references. SHIPPING In simple terms it is organised transfer of goods through water to a specific position.
FORMAT FOR BQ-9000 CERTIFICATION
Property ASTM Method Limits Units
Magnesium, EN 14538 )
Flash Point (closed cup)
Alcohol Control (One of the following must be met) 1.Methanol Content EN14110 0.2 Max . % volume
2. Flash Point
Water & Sediment
. % vol.
40 C , D 445
1.9 - 6.0 mm
Sulfated Ash .
Sulfur S 15 Grade
0.0015 max. (15) % mass (ppm)
SULPHUR S 500 Grade
0.05 max. (500)
% mass (ppm)
Copper Strip Corrosion .
D 130 max D 2500
No. 3 Cetane D 613
100% sample D 0.05 max 4530* D 664 0.50 max
. % mass
Total Glycerin . Phosphorus Content .
D 6584 D 4951
0.240 max 0.001 max
% mass % mass
T90 AET 1160 EN 14538
D 360 max
Free of undisclosed water, sediment, & suspended matter
BOLD = BQ-9000 Critical Specification Testing Once Production Process Under Control The carbon residue shall be run on the 100% sample.
Export of Bio Diesel- THE UNITED MEXICAN STATES
PROCEDURE—JOINT VENTURE SETTING UP PRODUCT BASE
Two oil refineries in Mexico and produce petroleum products on
our own. If we buy crude oil or even diesel it will add on to our cost .It will make us less competitive in International market. So we will acquire semi-operational oilrefineries. This will give us opportunities to meet high demand of bio-diesel in NAFTA. From our Refineries we will obtain diesel and transfer it to our Bio-diesel plant. The diesel that we obtain from these refineries will be sent to our Bio-diesel plant where we will process it and convert it into bio-diesel. Bio-fuels are a great business opportunity and it would help Mexico’s economy.
Import vegetable oils from Venezuela.
BGSCL has a subsidiary running in Venezuela. Venezuela is one of the biggest producers of the vegetable oils. Venezuela is not too far from the importing nations, so the import from there will help us in our cost retention and minimization. BGSCL STAKE IN BUSINESS
Federal Commission of Energy Board, as one of our dominant
partner: FCEB is a legislative body that governs the entire regulation and production of electricity in the nation. Without involving FCEB it will
be very tough to operate in Mexico especially in Energy sector. So, we will have their stake in the Bio-diesel Company of ours to an extent of 35 %. This will keep us acquainted with legislative reforms and the policies formulated within the nation.
Second Partnership will be with a ABES Oil Ltd. Company which
has its origin in Mexico: We will also have stake or partnership of a local oil producing company i.e. ABES Oil Ltd. This will reduce some of our financial risk. As, they are from the same nation they will help us in maintaining Public Relations to an extent. Their share will be somewhere around 25 %. A good amount of local and technical expertise will be made available.
BGSL will still have the main share: Bio-Green Solution limited will
definitely have the main share i.e.45 %. We will work in accordance with policies and cultures of the nations
EXPORT to-NAFTA (NORTH AMERICAN FREE TRADE ASSOSCIATION)
The North American Free Trade Agreement is a trilateral trade bloc in North America created by the governments of the United States, Canada, and Mexico. In terms of combined purchasing power parity GDP of its members, as of 2007 the trade bloc is the largest in the world and second largest by nominal GDP comparison. DEMAND FOR BIO DIESEL IN NAFTA S.No. 1 2 NATION U.S.A. CANADA DEMAND Ltrs) 1,850 227 (Million DEMAND(Million Gallons) 488.384 60
DEMAND MET BY NATIONS FOR U.S.A. S.No. NATION SUPPLY (Million SUPPLY(Million
Ltrs) 1 2 3 4 5 6 GERMANY FRANCE AUSTRIA SPAIN BRAZIL OTHERS 700 230 85 120 80 635
Gallons) 185.18 61 22.48 31.74 21.16 167.98
DEMAND MET BY NATIONS FOR CANADA S.No. 1 2 3 4 NATION GERMANY FRANCE AUSTRIA OTHERS SUPPLY Ltrs) 125 80 15 7 (Million SUPPLY(Million Gallons) 33.06 21.16 3.96 1.85
BGSCL PRODUCTION CAPACITY: .8 Million Gallons or 3.02 Million litres. BGSCL will supply .57 Million Gallons to U.S.A. and .23 million gallons to CANADA.
ADVANTAGES FOR BGSL IN TERMS OF TRADE Mexico is the fifth largest producer and tenth largest exporter of crude oil. It is a member of NAFTA(NORTH AMERICAN FREE TRADE NATION)
United States and Canada have high demand for Bio-diesel which we can meet. We will somewhat adversely affect exporters from European union. They are currently the biggest exporters to this nation. No tariff barriers within the area will make us more price competitive. We will get support from Mexican govt. stake in our Mexican subsidiary. in terms of trade. They have
Production is predicted to increase by 22 % in every financial year.
We have huge market demand and good retail network within the region.
EXPORT OF BIO-DIESEL- THE BOLIVORIAN REPUBLIC OF VENEZEULA
PROCEDURE—GROUND FIELD OPERATION. SETTING UP PRODUCT BASE
Acquire one oil refineries in Venezuela and produce petroleum
products on our own. If we buy crude oil or even diesel it will add on to our cost .It will make us less competitive in International market. So we will acquire semi-operational oilrefineries. This refinery will be setup in Sant Cristobal (STATE-TACHIRA). From our Refineries we will obtain diesel and transfer it to our Bio-diesel plant. The diesel that we obtain from these refineries will be sent to our Bio-diesel plant where we will process it and convert it into bio-diesel. Bio-fuels are the best non-conventional source of energy. Hence, we would emphasis on technical aspects of cost reduction without compromising with nature. We will buy vegetable oils from PRODUCERS Venezuela is one of the biggest producers of the vegetable oils. We will export Vegetable oils from here to Mexico because here we will get in bulk and at a cheap price. BGSCL STAKE IN BUSINESS
BGSCL will operate independently Bio-Green Solution Co-operative will perform operation independently in Venezuela. Reason being it is neither obligatory nor do we think we would want to get in any sort of joint venture.We will emphasis more on Production efficiency and meeting market demand within South America.
EXPORT TO –BOLIVIA, CHILE, EUCADOR:
In Phase I we will cover only three counties of South America i.e. Bolivia, Chile Ecuador.
DEMAND FOR BIODIESEL IN :Bolivia, Chile, Ecuador: S.No. 1 2 3 NATION BOLIVIA CHILE EUCADOR DEMAND Ltrs) 25 30 15 (Million DEMAND(Million Gallons) 6.61 7.96 3.968
DEMAND MET BY FOLLOWING NATIONS FOR BOLIVIA S.No. 1 2 3 4 NATION BRAZIL PERU SWEDEN OTHER’s SUPPLY (Million Ltrs) 15 7.5 2.0 .5 SUPPLY(Million Gallons) 3.96 1.98 .529 .13
DEMAND MET BY FOLLOWING NATIONS FOR CHILE S.No. NATION SUPPLY (Million Ltrs) SUPPLY(Million
Gallons) 1 2 3 PERU SWEDEN OTHER’s 10 2.5 17.5 2.64 .66 4.62
DEMAND MET BY FOLLOWING NATIONS FOR EUCADOR S.No. 1 2 3 4 NATION CZECH REPUBLIC SURIAME BRAZIL OTHER’s SUPPLY(Million Ltrs) .1 .18 .2 .02 SUPPLY(Million Gallons) .0264 .047 .052 .0052
BGSCL Production capacity is .47 million gallons or 1.766 million litres.
TARGET DISTRIBUTION: BOLIVIA - .26 million gallons
- .16 million gallons
EUCADOR -.05 million gallons
ADVANTAGES FOR BGSCL IN VENEZEULA It is the seventh largest producer of crude oil whereas sixth largest exporter of oil. Economic Policies are flexible enough and our company will work as per norms and standards of the legislative body. It has good relation with Latin America and United States. Very Cheap Vegetable Oils. From here we can also export vegetable oils to our subsidiary In Mexico.We will have two Advantage
We can export in bulk. This will be done at a cheaper rate because of law tariffs within the two nations.
PRODUCT PRODUCT DESIGN FEATURES • Bio-diesel is a blend of Diesel and Vegetable oils. It is a green product that would protect environment from increasing Suspended Particulate matter in air. It would reduce burden on the current use of Petroleum products. ----BIO-DIESEL CHEMICAL
PRODUCT QUALITY ----BQ-9000 Certification, ASTM and other National environment policies. PACKAGING PRODUCT VARIANTS IN BIO-DIESEL •
B-20(Blended Biodiesel 20) B-40(Blended Biodiesel 40) B-75(Blended Biodiesel 75) B-100(Blended Biodiesel 100)
We have discussed about these product attributes earlier. These are Product variants that we are offering to Consumers.Non-Conventional Source of Energy
are $ 1 Trillion opportunity. It is a time where we are facing an immense pressure on our current Petroleum Product. It is said that these Products would last in a period of 50 years. We have to do something for our environment and future generation. We have to utilize our resources judiciously so that Natural resources are not exhausted.
PRICING OF BIODIESEL
PRICING METHOD : MARKET PENETERATION We have to use this Pricing strategy because there are lots of substitutes available for Bio-diesel.For Example :Diesel,CNG and other Petroleul Product line would give us completion and would make our survival in market impossible. COST OF BIO-DIESEL PRODUCTION(IN USD) : FOR FIRST FINANCIAL YEAR
PLANT COST LABOUR COST @ $ 5/hr 2000 labour CERTIFICATION AND PATENT COST SETTING UP LABS 220,000 25,000 75,000
VARIABLE COST WORKING CAPITAL SALARIES PAID MATERIAL CONSUMPTION SELLING AND DISTRIBUTION CHARGES IMPORT OF TECHNOLOGY 3,000,000 1,800,000 300,000 800,000 200,000
TOTAL COST =FIXED COST + VARIABLE COST TOTAL COST=33,085,622+6,100,000 = $40,185,622
BGSCL PAYMENT METHOD: METHOD PAYMENT GOODS AVAILABLE TO BUYER AFTER PAYMENT OUR RISK RISK IMPORTER TO
CASH ON CREDIT
OUR RESPONSIBILIT Y OUR RESPOSIBILITY
OF When goods AFTER shipped and PAYMENT documents comply AFTER PAYMENT
SIGHT On DRAFT,DOCUMEN Presentation T AGAINST of draft PAYMENT
BUYER CAN MODERATE REFUSE GOODS RELIES ON MODERATE BUYER TO PAY DRAFTS Relies Buyer on None
TIME On maturity BEFORE DRAFT,DOCUMEN of draft PAYMENT T OPEN ACCOUNT As agreed Before Payment
PLACE : WHERE TO SELL ?
Several marketing channels are in operation to carry out the business. The existence of level of marketing channel depends on the population and living standards of people. But more emphasises is on our target market on the basis of end use of product.
Production unit 1: The Bolivarian republic of Venezuela EXPORT TO - BOLIVIA ,CHILE,EUCADOR Production unit 2: THE United of Mexican States EXPORT To- CANADA and UNITED STATES OF AMERICA
TRANSPORTATION OF BIODIESEL
Inter-Regional Transportation Issues Although most logistical issues should be overcome with proper planning, there are concerns regarding capital costs for expanding the current infrastructure, congestion, spatial constraints at terminal facilities, and availability of equipment. We will initially transport Biodiesel to Latin and NAFTA countries.
The promotional strategies have been divided on the basis of operations and consumption pattern. The marketing tools will be employed to enhance the perception and usage of the alternative fuel. Following steps would be done: For industrial Sales (Bulk sales):
Large scale industrial contact campaign will be launched. This would be done through company’s associates. This will also help in enhancing the awareness level of users. Company will use slogan of “CHANGE IS GOOD” for its industrial buyers. Initially a massive participation would be done in industrial trade fair. Being an alternative fuel, government subsidy and mass scale promotion with change in policies will benefit us. Government will support our technological advancement as we are providing environmental and economic impact at much lesser cost. Our cost effectiveness will allow units to considerably reduce their power bills. The company will get in technical collaboration with BOSCH to provide bio diesel conversion kits. Industrial units will be provided technology up gradation to convert their conventional power genset into Bio diesel run generators. This will be done at minimum cost to provide minimum installation cost. A minimal amount of multimedia advertising would be done to create publicity. As initial offer, company can offer free installation for complete installation. Plus, all the consumers would be provided lifetime back up service provision. Bulk discount on major bulk sales would be given.
For mass Retailing:
As per the market base, company will initially aim at the target market for creation of mass consumption pattern. Awareness will be given preference than sales. This will be done keeping in mind that our product is here to stay for long term. State transport corporations will be fitted with minimal of cost bio diesel conversion kits. Once the public transport goes green, even common people will start considering the bio diesel as serious alternative to petrol/ diesel. The benefits to be derived from bio green fuel will be propagated through multi-modal advertising. This will range from print media, audio-visuals to internet. Special dedicated BlogSpot and social networking sites will be used. This is different because younger generation have tendency and potential to understand the environmental impact of bio-diesel. For the domestic purposes, a good amount of bio diesel conversion kit display will be done. A high level of participation in technology advancement will be propagated. All automobile related events, from rally car racing to drag car racing will considered to start using bio diesel. Personal boats, yachts, miniature aircrafts, automobiles to be fitted with bio diesel conversion kits. The concept of Cult branding to be introduced to create a long lasting relation with the bio diesel user. Engineering colleges will assigned to work on certain project; this will create curiosity among young engineers to adapt to bio diesel run application. After the considered designs a small power generator will launched in the market. This is best bet of company as many people especially in country sides will go for it. Slowly and steadily conversion kits will be made available along with new products ranging from bio diesel run LAWN MOVERs, fuelled motor axe,
In the second phase, the company will go for collaboration in certified conversion kits to bio diesel for passenger vehicles. The main objective will be of to get in strategic alliance with automobile manufacturer of 4 wheelers and build a bio diesel compatible engine. In the third stage, two wheeler manufacturers would be alliance with to produce bio-fuel run 2 wheelers. Fuel junctions will be placed to provide at petro/ Gas stations for bio diesel. This will be done in accordance of strategic alliance with fuel retailing giants. It will provide mass retailing for consumer to get optimum demand supply continuum and cost minimizing for company.
The main objective of promotional strategies would be to replace petrol and diesel everywhere.
PROMOTIONAL MIX OF BGSCL AND BIO-DIESEL OUR MESSAGE;
BGSCL's total marketing communications programme is called the "promotional mix" and consists of a blend of advertising, personal selling, sales promotion and public relations tools. The four key elements of the promotional mix in more detail. It is helpful to define the four main elements of the promotional mix before considering their strengths and limitations.
Any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform. The two basic aspects of advertising are The message (what you want your communication to say) The medium (how you get your message across)
(2) Personal Selling
Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale". Personal Selling is an important aspect of our Promotional strategy because biodiesel is a product that requires Product consideration and there are limited buyers at international level. Though we are targeting various segments of the market we would like to target industrial consumers in future.
Two markets or regions that we are targeting will require technical compatibility as these are one of the most developed nations. Our Unique Characterstic is : Our green Products .This is the message that we will send across. (3)
Providing incentives to customers or to the distribution channel to stimulate demand for a product.
Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers). Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions. Some sale promotions, particularly ones with unusual methods, are considered gimmick by many. Our sales promotion Techniques :
We will have contesets for our sales team who opeartes in our Trade regiona and enhance our Sales or Trade relations.This would motivate them to work for organisation much harder.
Those who perform well ,we will give them certain relaxation on the price at which w had earlier offered them the product. This would increase their Profit Margin.
Free travel, such as free flights
It is nothing more than a Thanks From our side to people who have worked for the welfare of the organisation and our Planet
Earth.They are the people who have aligned to our organisation goals and have helped us in attainment of such goals.
The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly. otherwise known as "public relations" or PR.
SHIRTS THAT WE WILL USED TO PROMOTE OUR IDEAS
KEY CHAIN FOR PROMOTIONS
GENERATING AWARENESS ABOUT GLOBAL WARMING GREEN-FUELS :FUTURE OF WORLD GREEN PRODUCTS AND INFRASTRUCTURE DEVELOPMENT
“Think Green,Live Green,Go Green” “Everyday Is Earth Day”
Advantages and Disadvantages of Each Element of the Promotional Mix
Mix Element Advantages Advertising Good for building awareness Effective at reaching a wide audience Repetition of main brand and product positioning helps build customer trust Personal Selling Not good at getting customers to make a final purchasing decision Disadvantages Impersonal - cannot answer all a customer's questions
Highly interactive - lots of Costly - employing a sales force communication between the buyer and has many hidden costs in addition seller to wages Excellent for communicating complex / Not suitable if there are thousands detailed product information and of important buyers features Relationships can be built up important if closing the sale make take a long time
Can stimulate quick increases in sales by targeting promotional incentives on particular products Good short term tactical tool
If used over the long-term, customers may get used to the effect Too much promotion may damage the brand image
Often seen as more "credible" - since Risk of losing control - cannot the message seems to be coming from a always control what other people third party (e.g. magazine, newspaper) write or say about your product
Cheap way of reaching many customers - if the publicity is achieved through the right media
Future Promotional Strategy of BGSCL
1. STUDYING CRITICAL INPUTS BIODIESEL as one of the inputs will continue to play a dominant role in the Alternative fuel consumption. The potential for increasing Biodiesel use exists in the international market which need to be exploited by strengthening promotional programmes. WE have to emphasise on reducing cost of biodiesel .Blending Bio-diesel with Vegetable oil would also be environmentally feasible. The programmes will have linkages with the sales of Biodiesel particularly in areas with low alternative fuel consumption which need further efforts of market development. 2. SPECIFIC SITE DEVELOPMENT Area development approach with site specific Biodiesel Consumption programmes like watershed management, well water recharging, increasing water use efficiency, development of dry farming areas, crop diversification, soil reclamation etc. will receive greater attention. This would be done to produce Vegetable oil efficiently. Jatropha, a plant that is primarily used in feedstock and Bio-diesel production would help us in attainment of our future goals. 3. COLLABORATIVE EFFORT As the large number of agencies is now related to Biofuel consumption which indirectly contribute to Biodiesel promotion it is becoming imperative to implement collaborative programmes to bring in qualitative improvement and new innovations in the existing programmes.
4. ENHANCING TECHNOLOGY USAGE Promotional programmes also need backing of services like ASTM techniques in Production of Biodiesel, Purification of Bio-diesel and managing Supply chain,soil testing, input application, information access etc. The Bio-diesel sale points will be required to function as service centres. BGSCL is marketing fertiliser through various channel.
5. SEGMENT-BASED APPROACH BGSL and Biodiesel cater to various segments of society. So ,we will emphasise on Production and marketing of Bio-diesel as per segment demand. Segment refers to Breaking or separating consumers on the basis of the usage of product. Various segments that we cater are: ELECTRIC GENERATION MINING FISHERIES PASSENGER VEHICLE FARMING
Hence, our marketing plan would depend on the needs of various segment of the market. EXAMPLE: If Passenger Vehicle require Bio-diesel we will Produce more of B-20 than other variants.
For electric generation we would produce more of B-75 so that we
can meet up with the demand of electricity generation. We will emphasise on a Segment-Based approach in coming future, and will try achieving optimum demand and service continuum. We would try and attain equilibrium and avoid Over-Production and under-production.
NEW PRODUCT DEVELOPMENT LAUNCH OF BIO-DIESEL GENERATORS
NEW Product Development Process1) IDEA GENERATION The biodiesel powered generator facility can produce and sell electricity into the Power Grid. The power plant will run entirely on biodiesel, a renewable carbon neutral fuel produced from vegetable oil and animal fat. There will be a biodiesel-fueled electric generator-5 Megawatt Generator. That will be powered by biodiesel locally produced by Safe-Fuels. The station-wagon sized generators are expected to produce enough power to supply 1,500 homes on constant basis. The idea is
to provide electric city supply in south asian countries as to comer over blackouts. Ideas for new products can be obtained from basic research using a SWOT analysis Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, may also be used to get an insight into new product lines or product features.
2) Idea Screening Our plant will be emerging as one of the leading biodiesel producers and marketers in South America. It supplies biodiesel fuel that meets current power generation. The biodiesel generator produces 90% less smoke, making it nearly emission free and will not reduce air quality. It burns cleaner than petroleum diesel, emits less cancer-causing carbon monoxide, and zero sulfur dioxide which contributes to acid rain. Power output from biodiesel is equivalent to petroleum diesel, and with a few additives, emissions are reduced. Today's diesel engines are fully capable of running on Biodiesel without any modifications; they can run on petroleum diesel one day and biodiesel the next. The target market for these generators will be those who have this problems Are you tired of outrageous gas and electric utility bills?
Does your power go out often? Are you looking to install a backup emergency power system? Many people are facing these problems in today`s life, so our electric biofuel generator will provide them electricity at low cost and will give them backup of their electricity.
The object is to eliminate unsound concepts prior to devoting resources to them. The screeners must ask at least three questions:
Will the customer in the target market benefit from the product?
What is the size and growth forecasts of the market segment/target market? What is the current or expected competitive pressure for the product idea? What are the industry sales and market trends the product idea is based on? Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the target price?
3) Concept Development and Testing
The electric generators running on biofuel will be developed using latest technology. The market will be developing countries where there are electricity problems and people are facing problems with their high electricity bills. The future of diesel generators has a good outlook due to technological advances in making diesel fuel less pollutant and our increased research in biodiesel. Biodiesel is a new fuel that uses natural oils from products like soybean oil combined with a catalyst to create a fuel that can be burned for energy. Biodiesel runs great in diesel engines and has many advantages like longer engine life and cleaner burning. A diesel generator currently has many advantages but one that can run biodiesel as well will increase its value tenfold. With more and more research being done on biodiesel; the fuel can become very accessible and cheap for electric generators. Generators will be environment friendly. Customers will find them best they will be cheap. The generators will produced and will be fitted into electric grid of the target country and it will be cost effectively as we will be providing biodiesel, produced in our plant only. The concept really sounds good to the people as These are small steps towards a larger goal towards creating fewer emissions. Some people believe in global warming, some people don't. What we are doing is for cleaner air. The generators are scheduled to be added to the Electric Grid and afterwards, should the grid go down, all of the homes on the grid would continue to have power until repairs were completed. The project is being funded by a $3.5 Million dollar investment.
Develop the marketing and engineering details
Who is the target market and who is the decision maker in the purchasing process? What product features must the product incorporate? What benefits will the product provide? How will consumers react to the product? How will the product be produced most cost effectively? Prove feasibility through virtual computer aided rendering, and rapid prototyping What will it cost to produce it?
Test the concept by asking a sample of prospective customers what they think of the idea. Usually via Choice Modelling.
4) Business Analysis
Mexico encourages biodiesel production. It will cost us cheaper to produce biodiesel. Mexico, with its serious air pollution, slow progress towards minimizing the sulfur content in its diesel fuel, and burgeoning fleet of cars, is in dire need of some clean fuels. Mexican President Felipe Calderon recently announced a $85 million pilot project to produce biodiesel from non-food crops like jatropha and castor oil plant. There will be a huge market guaranteed in Mexico as well as due to requirement for environment friendly fuel. Our Biodiesel generators are fueled by clean, renewable resources that are more environmental friendly. Estimate likely selling price based upon competition and customer feedback
Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock equation
Estimate profitability and breakeven point
5) Beta Testing and Market Testing STAGES
Produce a physical prototype or mock-up
Test the product (and its packaging) in typical usage situations
Conduct focus group customer interviews or introduce at trade show Make adjustments where necessary Produce an initial run of the product and sell it in a test market area to determine customer acceptance The demonstration run of the generators, held in Mexico, clearly showed few signs of the telltale smoke associated with diesel fuel. The operation of the generators was part of the weekly scheduled test to ensure readiness in the case of a blackout.
6) Technical Implementation
These are certain points that we will take into consideration while developing our Biodiesel Generator. New program initiation
Engineering operations planning
Department scheduling Supplier collaboration
Resource plan publication Program review and monitoring
7) Commercialization Launch the product The Product will be launched in the financial year 20112012.We will first wait for success of Biodiesel and then initiate our launch of generators.
Produce and place advertisements and other promotions
This would depend on the market situations and market variables post-two financial years.
FEASIBILITY STUDY FOR BIO-DIESEL
FINANCIAL In the First Financial Year we are incurring a cost of $ 40,185,622.In the next Financial year it will drop by $ 34 mn.Because of the Fixed Cost of Plant. Average annual cost would increase by 20 % as well Our Production Capacity in the first year itself is 1.27 million gallon or 4.8006 million litres. Price of Our Bio-Diesel is $ 2.68/gallon. In Second Financial Year Our Productivity will be 8.5 million gallon In Third Financial Year Our Productivity will be 12.5 million gallon In Fourth Financial Year Our Productivity will be 15 million gallon In Fifth Financial Year Our Productivity will be 18 million gallon From here ,Our productivity will increase by 20 % annually.
BREAK EVEN ALALYSIS YEAR 0 1 2 3 4 5 6 7 8 9 CASH FLOW -40,185622 -4,000,000 +1,264,000 +5,583,000 +6,700,000 +8,040,000 +9,646,000 +10,988,000 +13,042,666 +16,080,000
BREAK EVEN CALCULATIOn
EXAMPLE :In 4 year we are Producing 15 million gallons. AVERAGE ANNUAL COST 6 million. Hence cost/gallon = =2.5gallon Profit = 15*2.68-2.5 =6,700,000 We are BREAKING EVEN after 7 years Till Seven Years we have Cash flow as (-40,185,622, -4,00,000, +1,264,000, +5,583,000, +6,700,000, +8,040,000 , +9646,000, +10,988000) =-$1,964,622 In the Eigth Year We have Sales of $ 55,263,666 Per Month It is $4,605,305 Per Day It is $153,510:::Hence Break even will take Place in Seventh day Of first Month. HENCE : BREAK EVEN is in 7 years ,I month,7 days.
RATE OF RETURN COST OF PROJECT = 44,185,622 AMOUNT AFTER EIGHT YEARS =55,263,666 AMOUNT=PRINCIPAL(I+r)(1+r)(1+r)…..8times/100 55,263,666=44,185,622(1+r)..8times/100 The Rate Of return comes out to be .192 or 19.2 %
The project stands true to is core objective of providing a world class solution in terms of organic fuel.
This characteristic of the fuel enables it to be produced in almost every location of the world. The feasibility of the bio-diesel is set to be defined on three different parameters. These are:
1. Product feasibility: This refers to the functional dependency of the
product where factors considering the product failure and success are evaluated. Different aspects for Resource-saving or contaminationcontrol, Organic materials, Cleaner manufacturing processes are considered. This is done to foresee the sustainability and usage of the output and product in commercially viable market.
2. Commercial viability: In the intense competition of world trade, only
those survive who have adapted their products and strategies as per the world trade order. It is very eminent to understand the fact that only innovation of product, marketing strategies and political relations drive these growths. A product has to be commercially successful because of its characteristics and differentiated features. The product here sought will be available in market in different stages. Starting with urgent requirement of providing alternative source of power to the industries. This will further move on to the mass production by making biodiesel run power generators available for masses. This phase is sought to be most viable for the economies which are fast becoming a developing nations. Our product will help them reduce their input costs to a considerable cost.
BIODIESEL stands true to its nature as an alternative source of power to the petroleum. Many nations have taken the biodiesel prospects as major contributor to their power generation capacity. The process employed for the production of the biodiesel makes it feasible for production. The success rate entirely depends on the usages sought of the product. The core objective is aimed at providing industrial units a breather. This will enable them save millions spend on petroleum fuel which is fast becoming a luxury.
3. Export competitiveness: The aspect of favourism has always and will
be a strategic tool for the success of products in markets abroad. The export competitiveness entirely depends on two aspects. First is the commercially viable product which meets the importing company needs
and secondly the trade relations between the two nations. The exporter should have the competitive advantage over and above its competitors in order to curb the competition. As per the market scenario there are no major exports taking place in terms of biodiesel, it gives us immense opportunities to gain over other nations in terms of foreign exchange.
4. Economic impact on Exporters and Importer: The importing nation
will always give importance to those countries which provides cost benefits. With our product, all the duties and plus the cost involved have been minimized to provide cost effectiveness to the importing nation. The refineries have been set up at such a location which allows us to drive cost effectiveness with speedy documentations. The importing institution has to only make payment and rest is assured from our side. Importer should not be made to pay for the freight and other charges. It is the duty of the exporters to identify and minimize the cost involved from the procurement to packaging and freight, insurance and other duties. All these features allow us provide cost effective operations with time saving. Above every thing the product offered makes every thing look small.
impact: This is the most important aspect of petrochemical business. Biodiesel needs are rising day by day. Simultaneously the production of petroleum products is drying up. It is expected that with the current consumption of petroleum products world wide, there will be immense shortage of petroleum. In order to sustain that time we have to act now. This is possible by switching on to alternative fuel as soon as possible. Biodiesel is one of the most sought after alternative.
The production of biodiesel would be done through process which is highly efficient in energy conservation and does not result in any kind of waste. The residue left after the process is further utilized into different relevant process. There are no harmful emissions into the environment. In fact there are large amount of carbon credits being made. This allows cleaner response to the energy efficiency where alternative fuel is produced without any environmental hazards. The production is carried out of jatropha and castor oil. These are non food crops hence there is no load on general plantation of these plants.
6. Demand and supply continuum: The specific target market heads the
demand and supply continuum. The service delivery platform will enable the large evasion of any kind of gap arising between the expected demand and supply of output. The target markets have immense potential for the biodiesel; this enables the green solution provision for the alternative fuel. NAFTA region has different consumption pattern than the production nation. Northern states are fully developed; this means a great amount of awareness is possible without making any special efforts. The gestation period of biodiesel will be reduced through the efficient delivery platform or retailing pattern. In order to reach the optimum level, all the factors have to be implied. This will be possible through adjusting the demand pattern and supply quotient. Our product will shift the focus from petroleum to biodiesel keeping in mind that long term benefits have to be derived. All kind of industrial units will adopt our power generation strategy and domestic buyers will move to passenger cars for getting highly fuel efficient engine.
7. Legal impact on Biodiesel:
World wide need for alternative fuel has enabled the governments to understand the effect. The cartels of petroleum producing nations have controlled the supply of fuel. This in return has created pressure on smaller nation to adapt to the alternative fuel. In response to this governments have collectively and individually formed various bodies to allow cropping up of biodiesel production. Importing as well as the exporting can avail the benefits in the form of tax exemption and duties evasions.
This has further made WTO to frame a body on alternative fuel production. It aims at research and development for cleaner fuel producing process and units. International Biodiesel board has been framed look after every trade aspect of this golden fuel. Free trade agreements between the countries are also giving importance to this alternative source of power. Biodiesel is fast seeking benefits from many countries. It is because of this that many international players are coming up to tap this opportunity which stands for more than trillion dollar business world wide.
Bio Diesel in India is virtually a nonstarter.
There are many reasons for that. The Main Reasons are non-availability of vegetable oil and government's policies. 1. Non Availability of Oil
In India Edible oils are in short supply, and country has to import up to 40% of its requirements (It is now partly offset by Bumper Crop of Soy). Hence prices of edible oils are higher than that of Petroleum Diesel. Due to this, these are not viable and use of nonedible oils was suggested for Bio Diesel manufacture. Even though the consumption of Edible oils in India is high, the availability of used cooking oil is very small as it is used till the end. Indian Culture uses vegetable oil lamps for lighting in homes and in temples (like candles in other cultures). When prices of edible oil shot up, some people turned to a bit cheaper non-edible oils. The requirement of this sector is more than 15 million tons (Bio Kerosene). Since seeds can be collected and crushed in a small scale in far flung villages, the use of non-edible oils for lamps is picking up very fast. This is the best way of use for millions of Rural Indians. This is depriving Bio Diesel industry its supply of oil. All over the world Edible oils are used for manufacture of Biodiesel. These are Rape seed in Europe, Soy in Americas and Palm in South East Asia. Rape seed and soy are used for its de oiled meal as cattle feed and oil is not that important. Hence these were in excess, and had to be disposed off at lower prices. Hence initially it was a viable raw material for Biodiesel manufacture and a lot of manufacturing units came up based on these oils. Now excess oil is committed, and fresh sources need to be developed.
Collection of non-edible oil seeds is a manual operation, and for large Biodiesel plant it is a logistical nightmare. In a day, a person can collect up to 80 kilograms of seeds, which can produce 20 to 23 litres of oil. The collection is done for 3 months, once or twice a year. For a 100 tons per day (8 million gallons per year) plant, you need 15,000 people to collect it. Collecting and organizing such a large manpower is a challenge. The price of Seeds of Jatropha is currently very high because most of it is used for plantation purposes. At this price, the manufacturing cost of Biodiesel is 3 times the pump price of Petroleum Diesel. Most of the edible oils used currently are Stable (do not get rancid). These do not decompose much on storage. Hence these are preferred for Trans-Etherification Process. Non-Edible oils are not that stable, and need a lot of pre-treatment adding to the cost of manufacture of Biodiesel. If these are used as lamp oil, even oils with 50% free fatty acids can be used. The use of lamp oil is increasing rapidly in India, as there is no electrical power supply for 10 to 14 hours a day in rural areas. Soon people will face shortage of these oils for lighting purposes. Cottage soap industry can use vegetable oils with high free fatty acid contents. Since prices of edible oils have doubled, many soap manufacturers in unorganized sector are using these oils as these are a bit cheaper. There are billions of other trees (Karanj, Mahua, Neem), all over India, with oil bearing seeds. Traditionally Karanj (Pongamia Pinatta) is planted along the highways. Petrol Pump owners along the highways, should be encouraged to collect the Karanj seeds. Neem (Azadirachta Indica) is planted everywhere for purification of air. Mahua (Madhuca Indica) and Sal ( Shorea robusta) grows wildly in Forests. Collection and processing mechanism for these seeds is not yet developed. Hence a most of these seeds lie on the ground (and ultimately get converted into Bio Fertilizer).
2. Government's Policies Government of India started Bio Fuel mission in 2003, but it announced Bio Fuel Policy on 11th September 2008. The Union Cabinet in its meeting gave its approval for the National Policy on Biofuel prepared by the Ministry of New and Renewable Energy, and also approved for setting up of an empowered National Biofuel Coordination Committee, headed by Prime Minister of India and a Biofuel Steering Committee headed by Cabinet Secretary. Ministry of New and Renewable Energy has been given the responsibility for the National Policy on Biofuels and overall co-ordination by Prime Minister under the Allocation of Business Rules. A proposal on “National Policy on Biofuels & its Implementation” was prepared after wide scale consultations and interMinisterial deliberations. The draft Policy was considered by a Group of Ministers (GoM) under the Chairmanship of Shri Sharad Pawar, Union Minister of Agriculture, Food & Public Distribution. After considering the suggestions of Planning Commission and other Members, the Group of Ministers recommended the National Biofuel Policy to the Cabinet. Salient features of the National Biofuel Policy are as under:
An indicative target of 20% by 2017 for the blending of biofuels – bio
ethanol and bio-diesel has been proposed. Bio-diesel production will be taken up from non-edible oil seeds in waste / degraded / marginal lands. The focus would be on indigenous production of bio-diesel feedstock and import of Free Fatty Acid (FFA) based such as oil, palm etc. would not be permitted. Bio-diesel plantations on community / Government / forest waste lands would be encouraged while plantation in fertile irrigated lands would not be encouraged. Minimum Support Price (MSP) with the provision of periodic revision for bio-diesel oil seeds would be announced to provide fair price to the growers. The details about the MSP mechanism, enshrined in the National
Biofuel Policy, would be worked out carefully considered by the Bio-fuel Steering Committee.
Minimum Purchase Price (MPP) for the purchase of bio-ethanol by the Oil Marketing Companies (OMCs) would be based on the actual cost of production and import price of bio-ethanol. In case of biodiesel, the MPP should be linked to the prevailing retail diesel price.
The National Biofuel Policy envisages that bio-fuels, namely, biodiesel and bio-ethanol may be brought under the ambit of “Declared Goods” by the Government to ensure unrestricted movement of biofuels within and outside the States. It is also stated in the Policy that no taxes and duties should be levied on bio-diesel.
Oil companies have declared their own Bio Diesel Purchase Policy. These
companies offer a price of Rs. 26.50 per litre of Bio Diesel, which is less than half the current manufacturing cost of Bio Diesel. Large patches of land are required for plantation of Jatropha. Government holds large tracts of land as Forest Lands and Revenue lands. In some states, like Chattisgarh, these are leased to State owned Oil Company like IOC. UP Jatropha mission of Uttar Pradesh is a Joint venture of BPCL, Nandan Biomatrics and Shapoorji Pallonji and is supported by UP Government. Presently, they are going to tie-up with every Panchayat (Local Body) of selecetd Districs to plant Jatropha on Panchayat lands. Jatropha seeds will be bought back by BPCL in long run. Operation of this mission may be very slow due to Government's and Panchayat's involvement and because it is implemented through National Rural Employment Guarantee Scheme. IOC is also planning to enter in UP as well as some others. Individual farmers are ready to plant Jatropha in their useless and waste lands and want buy-back agreement like contract farming with good price (But price offered is generally very low). Bundelkhand has lots of waste land (600,000 - 700,000 hectares) which are best suited for Jatropha and on the other hand Districts of Eastern UP have saline and waste lands which are also suitable for plantation.
Corporate Strategy Suggested for Big Indian Companies
Many Big Companies have their grass root plants in rural areas. They have a big fleet of Vehicles, and they consume large quantities of Diesel Oil for their Diesel Engine Vehicles and Diesel (Electric) Generating Sets. These companies also have many activities for Rural Development. They can combine Rural Development Activity to get Oil (and Biodiesel) for their captive use. Here is a suggestion. 1. They should Start buying seeds of Karanj, Mahua, Sal and Neem from local people around their unit and from Adivasis staying in Forests. Local NGOs and Self Help Groups should be encouraged for the same. Since seeds of these plants are not used much for plantation, the prices of these seeds are reasonable. If these seeds are bought at factory gate for Rs. 10 per kilogram, oil extracted from it can cost Rs. 30 per liter (considering sale price of seed cake). 2. This will develop a supply chain. This then can be expanded to district level and then to state level. 3. The seed cake is more valuable than oil. BioGas can be produced from it, and it can be used as fuel in factory. Almost 50% of the weight of seed cake is converted into Biogas, which is a clean fuel.
4. The fermented seed cake can be sold to local people for conversion into
Bio Fertilizer. Bio Fertilizers will be most sought after soil nutrients in future.
5. There are many BioDiesel producers in the country, which are facing
shortage of raw material. These can convert the Company's oil into
BioDiesel, and give BioDiesel back to the company, on contract basis. Conversion cost for a small scale BioDiesel plant is around Rs. 7 per litre. Hence it will be cheaper than Petroleum Diesel.
6. Since it is used captivity by the company, it need not be sold at meagre
price to oil companies. This will start like a movement (similar to Milk revolution by Amul and NDDB) and will spread rapidly. 7. It is a win-win situation for all. 8. If the company has to offer a price that is more than Rs. 10 per kilogram, the extra expenses incurred will not exceed even 1% of the entire fuel bill of the company
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