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Biodiesel business plan
Transcript of Biodiesel business plan
Environmental and Social Impact & Safety control
Supply & Distribution
Research and Studies
Renew Fuels has secured 13 different food chains, including 107 individual collection locations
The total estimated oil collection per month is approximately 92,050 liters
Renew Fuels will supply its Feedstock suppliers with 300 litre reusable drums
Full drums will be collected by our vehicle, which runs on the biodiesel produced by Renew Fuels
Most of the raw materials will be coming from Dubai and Sharjah
Caustic soda (NaOH)
Health and safety
As the company grows, additional suppliers must be sourced
Limited to sourcing the used cooking oil locally
approximately 7000 restaurants are estimated to be currently in business in Sharjah & Dubai
Many more are expected to open in the future
Future Feedstock collection
Mitsubishi Fuso Canter
Hydraulic lift, capable of lifting 1200kg of weight onto the cargo area.
Up to 14 oil drums can be collected in one trip
Renew Fuels Collection Vehicle
Collecting the raw material (UCO) will be the most challenging and risky operation
Collected used cooking oil must be inspected for quality to ensure that the supplier has not tainted the used cooking oil
On-going operations challenge
The main ingredient in the production of biodiesel is used cooking oil (UCO), acquired from restaurants and fast food chains
It is easier to work with clean oil
Securing a sound feedstock supply is important
Supply Chain Management
Renew Fuels is Limited Licensed Company
founded by the MDX group in sponsorship with a citizen of Sharjah, IAW EDD
The MDX Management Group:
Khaled Hasan Ziyat
Hussaini Mohammed Sadiq
The main employee’s listed in the above organization chart are:
Finance and HR Manager
Marketing and Sales Representative
Plant Operators (3 nos)
Simulation & plant optimization
Renew fuels Biodiesel Comply with ASTM 6751 and EN14214 standards
CT-500 dosing, and processing machine
Buffering and storage tanks
Production process Diagram
Other Sources of Energy and their Advantages
Wind, Geothermal, Solar and Biomass
According to IEA Report, 2013
Capacity to meet future projected demands
Reduce adverse effect to the environment and Carbon Footprint
Economic and Social Development
Usage and Effects of Fossil Fuel
Global demand is at 67%
Intermittent fluctuations / increase in Price
Global Warming – United Nations IPCC Report 2013
High Demand of Energy
Electricity / Power Generation
Chemical Process & Mass Balance
CT-500 Ultrasound Processor Working Mechanism
A Business Plan for commercial production of Biodiesel that promotes economic, environmental, and social sustainability.
General overview of the region.
According to the MENA Renewable Status Report 2013
Rapid growth in renewable energy by 14% between 2007 and 2010
Growth in energy demand due to increase in population, urbanization
and economic progress
Water Scarcity, high fossil fuel prices and enhancement on energy security and environmental factors.
14% of the total energy consumption
3% in the industrialized countries and
35% in the developing countries, mainly Rural population
Analysis conducted by UNCED indicates that,
......Biomass can account for 50% of present energy demand by 2050
Board of directors
Excellence, Innovation, Integrity, Team work
Renew Fuels aims to be the leading producer of Biodiesel in UAE.
Aims to create a renewable fuel
Committed to help reduce carbon footprint.
Substitute 5% of diesel fuel demand of Sharjah with biodiesel by 2020
Using biodegradable material.
Commitment to follow the company’s mission and vision.
Tower Perin Model
ENERGY VS ENVIRONMENT
Emits harmful wastes on burning
On the verge of depletion
Leading to climate change
Petrol Based Diesel
Less Toxic than Diesel
Reduces particulate matter
Reduces carbon footprint
Safe to handle
No engine modifications required
Renewable Green Fuel
Solution : Biodiesel
Market Potential/ Analysis
High demand of energy for vehicular transportation
Political support for renewable energy
"Green Economy for Sustainable Development”
Supported by Dubai Global Energy Forum (DGEF 2013),
The Dubai Integrated Energy Strategy
Reduce Carbon footprint
Neutral Fuels and Lootah Biofuels
Diesel producing companies
Support of Sharjah Economic Department
First Movers Advantage
Most advanced technology in the market
First Movers Advantage.
Fully Automated plant equipment
Most advanced purification system
Support of the Sharjah Economic Development Department
Renew Fuels already has a buyer buying most of the producti
Lack of initial Capital
No competitors in Sharjah presently producing Biodiesel.
Reduce carbon footprint and a green substitute for diesel fuel.
Uncertainty in supply of UCO
Porters 5 Competitive Force Analysis
Period of Analysis (2014 – 2017)
Source of Finance
Budgeting and Cash-Flow Analysis
Cost-Volume Profit Analysis
Performa Income Statement
Source of Finance
Initial Capital Investment : AED2,000,000.00
Green gas emissions.
Health and saftey
precautions & safety equipments
Smoke / Methanol detectors
strict no smoking policy
Anti static footwear and clothing
Ultrasound reactors are safer than others......!
Business Setup approach:
Selection of location
Planning and Scheduling
Risk Management (Process)
Identification of risks
Analysis of impact/implication of risks
Preparation of response to minimize/mitigate the risk
Management of residual risk
Risk Management (Criteria)
Probability of the risk occurring
The impact of the risk on the project
The risk tolerance line
Price changes with Buyers or suppliers
contracts with the buyers and suppliers to prevent changes in prices
Direct competition may arise
Contracts with the buyers and suppliers to reduce the impact
Methanol leakages may cause explosions.
Storage of methanol to be in remote containers
Installation of methanol detectors
Biodiesel is not new!
First experimented with in the 30’s
1937, a technology called Transesterification was developed in Belgium, which converted the oil into smaller molecules.
Current technology for production formed in the 80’s
Originally used in remote areas where Petroleum based diesel was not available
It was only popular during WWII, and the oil crisis in the 70’s
Original diesel engines could run directly from pure clean cooking oil
Newer diesel engines could not work with this, due to the thick viscosity
Approximately 35% increase
Modern Biodiesel Production
Cost of biodiesel production has significantly decreased
Newest technology, using High Frequency Magnetic Impulse Reactor Processing Method (Ultrasound reactor)
Manufacturing facility ideal to be near the feedstock supply, and customer biodiesel fill
Other Sources of Biomass
early stages of technology
Facility is costly to setup
Current cost to produce a gallon of fuel is too high
Food Based Feedstock such as Corn & Soy
Biomass obtained from food crops has a higher value than food itself, which has in the past lead to food shortages, or increased food cost
Requires a lot of land to produce
Plants can only be grown seasonally
It is not a very profitable endeavor
Wood & Rubbish
Limited to producing energy on the spot
Cattle Manure (animal waste)
Used as a biogas by either burning it directly, or by producing methane gas by means of anaerobic digestion
Not efficient to transport the raw material long for biomass production elsewhere
Large scale project
Why is Renew Fuels going Green with Used Cooking Oil?
Biodiesel is a green fuel that emits less toxins into the atmosphere than traditional Petroleum based diesel, and lubricates the engine while doing so.
The industry is still in its early stages, a good time to enter the market
Biodiesel is quickly gaining popularity, it compliments the worldwide green initiative
Demand is on the rise.
RenewFuels Biodiesel can be sold for slightly less than the market value of Petrol based diesel
Why is Renew Fuels going Green with Used Cooking Oil?
It is easy to collect, store, and convert into biodiesel.
The Biodiesel produced can be used to service vehicles in the same vicinity from where the feedstock is collected
Producing Biodiesel from used cooking oil is an excellent and profitable solution
Other than sewage waste, it is the only other material abundantly available in the UAE
UCO Collection Supply Summary
The final product B100 biodiesel will be distributed amongst three clientele
The Logistics Company in Sharjah, accounting for approximately 65% of Renew Fuels biodiesel production
The Sharjah Transport Authority (STA), accounting for approximately 30% of Renew Fuels biodiesel production
The remaining 5% of the biodiesel will be sold to some of Renew Fuels UCO suppliers
Most trucks will be filled at the Renew Fuels production plant mini pump
The Sharjah Transport Company would need to have the diesel delivered to them via a rented Isuzu Diesel Tanker, capable of transporting 1000 gallons (3785 litres) in one trip
Supply Chain Feedstock & Biodiesel Fill diagram
Is the feedstock available in commercial quantity?
Is the technology and plant design operational?
Is the product commercially viable?
Does the company have potential for sustained growth?
Does the management have the ability to exploit the market potential and control the company through the growth phases?
Does the possible reward justify the risk?
Have all the risks associated with the business identified and mitigating factors developed.
Is the potential financial return on the investment justifiable?
Investing the sum of AED1,500,000 in Renew Fuels is surely a positive investment decision with good financial returns.
1,500,000 AED only