biodiesel project [compatibility mode]

8/4/2019 Biodiesel Project [Compatibility Mode]

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BIODIESEL PROJ ECT OVERVIEW

Presented B

G.D.KAMESWARA RAO



PROJECT GOALS

• First Biodiesel manufacturing facility in thecountry to cater to the European Markets.

• ro uce o ese to meet t e str ngent uropeanquality standards.

•

• Promote Jatropha / Pongamea Plantations in thecountry for the social justice and upliftment of

poor armers.

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BIODIESEL PROJECT

New Millennium projectRenewable source of Energy

Agro-based Energy development

Pioneering Effort

xpor r en e n

Chennai Location

-

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PRODUCT

Mono Alkyl Ester (Biodiesel) Conforms to Euro Norms

EN 14214 Standards

Li ht Yellow / Colorless li uid

Additive for lubricity in # 2 Diesel

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PROBLEMS

• Crude Petroleum prices sky rocketing• 90% of transport industry depends on

etro eum pro ucts

• Vehicle population increasing many fold all over

• Petroleum products cause lot of pollution andcontribute for Global warming leading to natural

ca am t es.

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OPPORTUNITIES

Biodiesel is a potential replacement for # 2Diesel.

e uces t e po ut on an green ousegases

Used as an additive to increase lubricityand increase vehicle life

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ADVANTAGES - BIODIESEL

Reduced Emissions

Higher Flash Pointco- r en y

Nontoxic

Competitive Price

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EMISSIONS

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DISADVANTAGES

Congeals between 15O

C to – 8O

C. Additives needed during winter in Europe.

7.5% - 12.5% Lower Calorific Value than

# 2 Diesel. u a es

- 3000 MT for Exports

-

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MARKET SUMMARY

• Vast Market potential• Biodiesel otential com etitor

• Government support required initially

• Chea ve etable oil ma or constraint

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DIESEL CONSUMPTION

S.No Region 2001 2002 2003 2004 2005*

1 North America 279 280 286 293 296

3 India 38 37 37 37 38

4 Total World 1094 1103 1128 1166 1190

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DIESEL DEMAND

(In Million MT). o eg on

. . .

. . .

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BIODIESEL DEMAND

(In Million MT). o eg on

o r m er c a . . .

. . .

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. . .



BIODIESEL SUPPLY

S.No Region 2005 2010 2015

1 North America 0.30 2.28 17.31

2 Europe 3.00 13.45 21.663 India 0.03 0.22 1.67

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DEMAND SUPPLY GAP

(In Million MT)

1 N o r t h A m e r i c a 2 .6 6 1 3 .6 7 1 7 .0 72 Eu r o p e 5 .1 1 4 .2 2 1 0 .3 3

. . .4 Wo r l d m a j o r m a r k e 9 .7 2 2 2 .3 6 3 4 .0 4

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SELLING ARRANGEMENTSExport MarketsDirect Oil Companies

Accredited MarketersLarge Fleet OwnersRetailers

Indian MarketsRailwaysOil Companies

Large Fleet Owners

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BIODIESEL PRICES

S.No Region n n s.

1 USA US$ 0.88 40.48

. .

3 India Rs 58.00 58.00

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PRICES - USA

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PRI E - ERMANY

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COMPETITIVE ANALYSIS

• Competitors – Large number of Biodiesel plants are

com ng up n urope an .

– Four large Palm Oil based Biodiesel

– Many Biodiesel plants are in planningsta e in India

– A small 30 TPD plant is underconstruction in Hyderabad.

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COMPETITIVE ANALYSIS CONTD..

• Strengths – Biodiesel market is very large.

– It can accommodate any number of new plants

– Cheap Industrial labor force in India – e eve ope n an n us r a n ras ruc ure

facilities

– Low Ca ital cost for Biodiesel Plant in India

– Jatropha / Pongamea oils give superior qualityBiodiesel compared to CPO/ RBD Palm Olein

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COMPETITIVE ANALYSIS CONTD..

• Weaknesses – Additional transportation and handling of CPO/

a m e n n t e s ort term

– Dependence on imported oils

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COMPETITIVE ANALYSIS, CONTD..

• CPO based Competitors- Mala sia

- Indonesia

• Stren th of Com etitors

- CPO / RBD Palm Olein availabledomesticall

- Palm Diesel Technologies are welldeveloped in Malaysia

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COMPETITIVE ANALYSIS, CONTD...

• Weaknesses- Biodiesel from CPO / RBD Palm Olein

is more suitable for tropical countries.

- Jatropha / Pongamea Biodiesel is moresuitable for cold climates.

- Jatropha / Pongamea plantations are

under development in India.

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PROJECT FEATURES

100% Export Oriented Unit (EOU)50% of Ex ort Sales ermitted as DTASales with concessional duty.

Imported Oils as FeedstockSwitchover to indigenous Jatropha /Pongamea oil gradually in 3-5 years period

De-bond / Add Capacity to cater to IndianMarkets in the long run.

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CAPACITY

33,000 TPA Biodiesel

-

Product)

easily expanded

Minimum Economic capacity 10,000 TPA inIndia

Minimum Economic size 33000 TPA

Global sizes 100,000 TPA

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PROCESS

• Crude oils pretreatment to remove gums,coloring matter, odoriferous materials.

• Methanol and Catalyst added to treat

refined oil• Transesterification carried out

• Solvents / Catalysts removed and recycled

• Methyl ester purified

• Crude Glycerol purified

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TRANSESTERIFICATION PROCESS

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PROCESS

Batch process - not selected

• Low pressure reaction process

• High pressure reaction process

nergea

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PROCESS

Batch process - not selected

• Low pressure reaction process

• High pressure reaction process

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TECHNOLOGY

• Twelve technology suppliersidentified

• Four Suppliers regretted

• Lurgi, Desmet and Energea are

s or s e

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TECHNOLOGY

• Lurgi AG, Germany represented byChemical Construction International,Delhi

• Desmet Ballestra, Italy represented byesmet em oo s, anga ore

• Energea, Austria

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LURGI AG, GERMANY

• Maximum number of reference plants• Indian partner handles upto 125 TPDp ants

• Strong in Edible oil Processing and

• Use low pressure, low temperaturerocess.

• Total solution provider.

• Semi-turn ke im lementation.

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DESMET, BALLESTRA, ITALY

• Large number of reference plants• Stron in Edible oil Processin and

Glycerol purification

• Use Low Pressure, Low Temperatureprocess.

• Total solution provider.

• Semi-turn key implementation.

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ENERGEA, AUSTRIA

• R&D Based company• A few ood reference lants

• No Indian partner

• Oil retreatment and Gl cerol urificationneed to be tied up with other suppliers.

• Use Hi h ressure, Hi h tem erature

process.• Semi-turn key implementation.

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SPECIFICATIONSSPECIFICATION UNITS EUROPE GERMANY USA # 2 DIESEL

EN 14214:2005 DIN V 51606 ASTM 6751-03 EN 590:1999

Density 15°C g/cm³ 0.86-0.90 0.875-0.90 0.82-0.845Viscosity 40°C mm²/s 3.5-5.0 3.5-5.0 1.9-6.0 2.0-4.5

Flashpoint °C 120 min 110 min 130 min 55 min

* country

summer 0

spr/aut -10 * country-

Sulphur mg/kg 10 max 10 max 15 max 350 max

Water mg/kg 500 max 300 max 500 max 200 max

°

Cetane number 51 min 49 min 47 min 51 min

Acid value mgKOH /g 0.5 max 0.5 max 0.8 max

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. .



COMPANY MANAGEMENT

• Professionally managed by Board•

inducted

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PROJECT MANAGEMENT

• Semi turnkey for ISBL-Main plant• Cost plus for OSBL plant

• Reputed vendors and contractors will beinvolved

• ec no ogy supp er- ong ermrelationship will be established

• .

• Keep up tight control on project cost /time schedules

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IMPLEMENTATION SCHEDULE

• 12 Months after financial closure

• 9 months from down payments to the Technology

• 2 Months for Pre-project activities

• Company to be incorporated• Site recommended (Gummidipoondi).

• Decision to buy the land need to be taken.

• Financial closure to be arranged

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IMPLEMENTATION SCHEDULES.no Particulars Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07

1 Land acquisition and Developme nt

2 Building3 Plant and Machinery

-

- Deliver y at Site

4 Ar range m e nt for pow e r

5 Arrangement fo r Water6 Erection of Equipments

7 Com m is sioning

8 Trial Run

rocure m en o aw a e r a

10 Training of Personnel

11 Comm ercial Operations

M ar-06 A r-06 M a -06 Jun-06 Jul-06 Au -06 Se -06 Oct-06 Nov-06 De c-06 Jan-07 Fe b-07 M ar-07 A r-07

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PROJECT COST(Rs. In Million)

.

1 Land and site development 20.222 Buildings: 19.06

3 Plant & Machinery 251.72

4 Technical know-how and Consultancy fee 19.43

6 Misc-fixed assets 44.14

7 Preliminary and Capital Issue expenses 1.00

- .

9 Provision for Contingencies 19.02

10 Margin money for working capital 51.13

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Total 450.75



SOURCES OF FUNDS.

S.No Particulars Sub-total

A Total Capital outlay 450.75

-Equity Capital 150.25

a. Indian Promoters, friends and relatives 90.15

c. Technology Provider

d. Raw material supplier

e. Marketin Distributor

60.10

f. Preferential Shares / NRI Funds-Term loan 300.50

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A HFL W PLANNINMar 06- Jul 06- Oct 06- Jan 07-

(Rs. In Million)

.

1 Promote rs Equity 90.15 90.15 0.00 0.00 0.002 Othe r Inve sters 60.10 60.10 0.00 0.00 0.00

. . . . .

4 T ota l 450.74 176.75 88.10 76.86 109.02

QUARTERLY FUND REQUIREMENT

39% 1

20%17%

24% 2

3

4

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RAW MATERIAL SUPPLY

• CPO/ RBD Palm Olein from Malaysia /Indonesia

• Imported Jathropha Oil from African

Countries• Domestic sourcing of Jathropha /

Pongamea oils

for Jathropha / Pongamea cultivation forsupplies

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MATERIAL CONSUMPTIONUNIT COST

S.No Ma t e r ia l

Requ i re

m e n t

o f

Ma te r ia l

BioDiesel

Europe

BioDiesel

DTA Glyc e ro l

K /MT er K Rs./MT Rs./MT Rs./MT

1 CPO 1100 18 .97 17129 15294 19726

2 Me t han o l 110 22 .05 1991 17 78 2293

3 Ca t a lys t 18 42 .00 620 554 7154 Ac e t ic ac id 6 47 .31 233 208 268

5 Cit r ic Ac id 0 .1 5 0 .60 4 4 5

6 Pho spho r ic ac id 3 40 .23 99 88 114

.

8 Ac iva t ed c a rbon 5 59 .71 245 219 282

To ta l Ma te r ia l cos t

er MT of Bio-d ies el

20362 18180 23448

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UTILITIES

Rs./ ption Rs./

1 Power KWH 3.50 120 420

2 Maximum Demand Charges KVA 300 750 823 Steam requirement MT 500 2 1000

4 Water KL 31.25 3 94

ue requ remen .6 Total utility cost / MT 2382

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PRODUCTION COST BREAKUP



PRODUCTION COST BREAKUP(YEAR 3)

(Rs. In Million)

S.No Particulars Amount %

1 Expected sales/Realization 997.18 100.00%2 Raw Materials and Chemicals 736.81 73.89%

3 Utilities 51.75 5.19%

4 Factory wages and salaries 9.61 0.96%

5 Factory overheads 7.10 0.71%m n s ra ve expenses . .

7 Total Sales expenses 1.99 0.20%

8 Financial expenses 41.65 4.18%

eprec a on . .

10 Preliminary expenses written-off 2.14 0.21%

11 Provision for tax 11.72 1.18%

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. .



FINANCIAL HIGHLIGHTS(Rs. In million)

. o ar cu ars

1 Sales realisation 886.38 941.78 997.18 997.182 Total Cost of Operations 724.37 770.66 816.98 819.35

ross pro . . . .

4 Income Tax 7.54 9.48 11.72 12.70

5 Profit after Tax 72.82 79.42 89.44 91.07

arn ngs per s are . . . .

7 Reserves and surplus 57.79 114.68 174.07 235.09

8 Cash at hand 95.17 161.11 204.51 252.58

.

10 Average DSCR 2.42

12 Total Payback period 40.28 Months

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. . . .



VARIENCE ANALYSIS

S.No Particulars IRR DSCR PBP1 Base Case 26.23% 2.42 40.28

2 Increase in Raw material cost by 5% 20.69% 1.98 50.72

3 Decrease in Selling price by 5% 20.70% 1.97 51.04

4 ncrease n aw mater a cost y 5%+

Decrease in sales by 5%

15.14% 1.53 69.5

- -

PBP - Payback Period

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CONCLUSIONS

• Pioneering effort in Oil Industry• Economic viability established• ec n ca capa y ava a e• Meeting highest quality standards in the

world• Market tie ups possible• Raw materials management planned

• Professional management to keep the costand time schedules•

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KEY POINTS FOR DECISION

• Near term

– Company Capital Structure

– 100% EOU Registration

– Selection of Technical Collaborator

– scuss on w ar e ng agenc es n urope/ USA for Buyback and Product specifications

– Decide on lant confi uration

– Order Placement for Basic and DetailedEngineering Designs and Equipment supply

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• Near term

– Selection of Local Civil and Electricalontractors

– Port Tankage facilities arrangements

arrangements

– Jathropha / Used Vegetable oil importation

arrangements

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• Long term

– Domestic sourcin strate forJatropha / Pongamea oils

– Contract farming strategies – Plantation strategies

– De-bondin / Ex ortin strate ies after

domestic oils supplies are established

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RISKS AND SOLUTIONS

overnment po c es, ut es an axes

- Developed Countries actively promoting.

incentives. Reversal chances are less.

Acceptability of High Cold Filter Plug Point(CFPP) of CPO / RBD Palm Olein

- In Europe and USA anti-freeze additives are.

- Necessary technologies are already availablefrom Malaysia for low pour point palm diesel

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uc ua on n a m e n pr ces

-Sourcing and developing domestic vegetable

Glycerol glut in the long run

- R&D work going on in Developed Countriesfor development of new applications forGlycerol

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biodiesel project [compatibility mode]

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