Biodigester Inc.Biodigester Inc.

Mike McKevittMike McKevitt

Jimmy Wright Jimmy Wright

Iain StablesIain Stables

Dave PuechDave Puech

Business ProposalBusiness Proposal

Manure Biodigester – Manure Biodigester – incorporated into a incorporated into a 5,000 head feedlot5,000 head feedlot

Situated near Situated near Rosetown in west Rosetown in west central central SaskatchewanSaskatchewan

Project OverviewProject Overview

Process raw manure into two value Process raw manure into two value added productsadded products

Methane gas which will be burned to Methane gas which will be burned to generate electricitygenerate electricity

An enriched form of fertilizerAn enriched form of fertilizer

Methane GasMethane Gas

Produced during microbial breakdown of Produced during microbial breakdown of manuremanure

Used to create electricityUsed to create electricity

FertilizerFertilizer

More concentrated form than the raw More concentrated form than the raw productproduct

Can be classified as an organic fertilizerCan be classified as an organic fertilizer

Can be sold in bulk liquid form or may be Can be sold in bulk liquid form or may be dried and packageddried and packaged

Long-term BenefitsLong-term Benefits

EnvironmentalEnvironmental Reduction in air, soil and water pollution Reduction in air, soil and water pollution

associated with ILO’sassociated with ILO’s

Added jobs to the rural economyAdded jobs to the rural economy

Adding to the profitability and long term Adding to the profitability and long term viability of a farming enterpriseviability of a farming enterprise

Facility LayoutFacility Layout

Physical Product FlowPhysical Product Flow

Capital BudgetCapital Budget

Site Costs 178,000

Equipment Costs 1,626,694

Net Working Capital 43,873

Total Capital Required 1,848,567

MarketingMarketing

ProductsProducts

Energy will be marketed as environmentally Energy will be marketed as environmentally friendlyfriendly

Fertilizer will promoted as an organic fertilizerFertilizer will promoted as an organic fertilizer

Future MarketsFuture Markets

Dry packaged fertilizerDry packaged fertilizer

Needs addition of a water press to the facilityNeeds addition of a water press to the facility

Gives the opportunity to sell to gardeners, Gives the opportunity to sell to gardeners, greenhouses, etcgreenhouses, etc

Pricing StrategyPricing Strategy

Price received for energy will be Price received for energy will be controlled by SaskPowercontrolled by SaskPower

Fertilizer price will be determined by Fertilizer price will be determined by market forcesmarket forces

PromotionPromotion

Will take place through brochures, web Will take place through brochures, web page and word of mouthpage and word of mouth

Sales will be done directly without the Sales will be done directly without the need for distibutorsneed for distibutors

Fertilizer sales will be targeted at golf Fertilizer sales will be targeted at golf coursescourses

Marketing BudgetMarketing Budget

2006 2008 2010 2012 2014

Vehicle(Lease, Fuel & Insurance) 10,776 10,776 10,776 10,776 10,776

Telephone 2,160 2,247 2,338 2,433 2,531

Brochures 1,590 1,931 2,345 2,848 3,458

Webpage 2,500 306 318 331 345

Total Marketing Expenses 17,026 15260 15,777 16,388 17,110

Sales ForecastSales ForecastYear 2006 2007 2008 2009 2010

 

Sales 367,400 361,888 389,526 397,316 405,263

COGS 147,543 316,538 265,128 224,163 191,611

Gross Margin 219,857 65,351 124,397 173,153 213,652

Expenses 80,503 73,321 68,683 63,724 58,422

Net Income Before Tax 139,354 (7,970) 55,714 109,429 155,230

Income Tax 15,106 0 5,175 11,862 16,827

Net Income After Tax 124,248 (7,970) 50,539 97,567 138,403

Total Net Cash Flow to Equity 332,933 190,299 191,451 191,240 192,818

Financing BudgetFinancing Budget

Total Financing Required 1,795,335

Long Term Debt 897,677

Owners Equity 897,677

Total Financing 1,795,335

Dividend PolicyDividend Policy

Estimated dividends Estimated dividends paid to investorspaid to investors

2006 2007 2008 2009 2010

(268,303) 59,057 184,792 185,834 185,490

Sales Forecast - EnergySales Forecast - Energy

2006 2008 2010 2012 2014

Quantity Sold (kWh)

1,500,910 1,500,910 1,500,910 1,500,910 1,500,910

Price($/kWh) 0.11 0.11 0.12 0.12 0.13

Revenue($) $165,100 $171,770 $178,710 $185,930 $193,441

Sales Forecast - FertilizerSales Forecast - Fertilizer

2006 2008 2010 2012 2014

Quantity Sold (m3)

26,600 26,600 26,600 26,600 26,600

Price ($/m³) 5.50 5.72 5,95 6.19 6.44

Revenue ($) 146,300 152,211 158,360 164,758 171,414

Sales Forecast – Manure Sales Forecast – Manure RemovalRemoval

Year 2006 2008 2010 2012 2014

Quantity Sold (kWh)

28,000 31,500 31,500 31,500 31,500

Price($/m³) 2.00 2.08 2.16 2.25 2.34

Revenue($) 56,000 65,545 68,193 70,48 73,815

Organizational StructureOrganizational StructureSaskEnergy

(30%)Biodigester

Founders (70%)

Board of DirectorsSaskenergy(1) Biodigester(2)

President/CEO

Manager

Technician

EmployeesEmployees

General ManagerGeneral Manager Oversees day to day operationsOversees day to day operations MarketingMarketing General office dutiesGeneral office duties

TechnicianTechnician Perform required maintenancePerform required maintenance Fill and monitor digester tanksFill and monitor digester tanks

Employees – cont’dEmployees – cont’d

Temporary Maintenance crewTemporary Maintenance crew

Seasonal employeesSeasonal employees

Help with general upkeep of facilityHelp with general upkeep of facility

General AssumptionsGeneral Assumptions

Biodigester will be filled continuously and the Biodigester will be filled continuously and the fertilizer will be removed regularlyfertilizer will be removed regularly

Manure will be readily available year roundManure will be readily available year round

The loan will have a fixed interest rateThe loan will have a fixed interest rate

General AssumptionsGeneral Assumptions

Able to secure equity financingAble to secure equity financing

Inflation rates will remain at or near the Inflation rates will remain at or near the same levelsame level

Biodigester is able to contract the energy, Biodigester is able to contract the energy, fertilizer and manure removalfertilizer and manure removal

ConclusionConclusion

Employee training will be criticalEmployee training will be critical

Feasibility of a biodigester in Feasibility of a biodigester in SaskatchewanSaskatchewan