business models to attract investment into jatropha

8/8/2019 Business Models to Attract Investment Into Jatropha

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Biofuels - a risky investment in a

rapidly changing market?


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Some recent investment

experiences in biofuels D1 Oils had an oil refining model but changed

their business model to incorporate feedstockproduction

This attracted new investment (BP), but it

seemed that expectations of ease / speed inestablishing jatropha oil production were over-estimated

Jatropha business model changed again nowwith extra focus on crop improvement


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Fundamentals still strong for

investment into biofuelsSummary of reasons to invest in biofuels

High costs of fossil oil importation. Demand will be underpinned by national mandates for

renewable fuels and market growth from China andIndia.

Biofuels can be integrated into existing markets withouthigh cost changes to infrastructure. Biofuels can also bedispensed just as gasoline is today.

From The European Biofuels Challenge: Developments in European

Union Policy and Industry Drivers By Urmila Doraswami. August

2008


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5.1.4.2 Multi-cri teria Analysis of Suitable Biofuel Feedstock alternatives

Biofuel feedstocks have been ranked in terms financial sustainability for small holder

producers, energy balance, GHG emission reduction, environmental impacts, habitatconversion, land and soil degradation, water pollution, and contamination fromprocessing effluents and agrochemicals, ease of environmental mitigation, human foodchain biofuel feedstock competition, compatibility with existing farming systems, waterand labor marginal productivities and market demand.

Rank Feedstock#1 Jatropha Curcas#2 Cassava#3 Sugarcane#4 Soybean#5 Maize

Other feedstocks (like palm oil) were deemed not to meet minimum qualifications forsustainability.

WWF/SNV Biofuel Study


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There is increasing commercial

interest in jatropha oilAir New Zealand to power plane w ith nut oil

AIR New Zealand will trial flying a jumbo jet partly powered by nutoil later this year. With oil prices soaring, the company is testingthe power of the jatropha curcus, a nut which grows in tropical,semi-arid regions.By Brad CrouchAugust 03, 2008

Toyota eyes diesel optionsToyota and PTT, in collaboration with Kasetsart University, have

been conducting experiments to develop biodiesel from the fruit

of jatropha. Santan Santivimolnathttp://www.bangkokpost.com/Business/28May2008

Bio Energy Plantations Pte. Ltd has signed its first Jatrophaoff-take MoU with leading bio-diesel producer Van Der Horst

Biodiesel Pte. Ltd.
http://www.bangkokpost.com/Business/28May2008http://www.bangkokpost.com/Business/28May2008


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Jatropha is the preferred feedstock

Conclusions from global market study*:

Jatropha is on the move on large scale expect

investments of >$1bn annually in the years tocome

Jatropha can be made sustainable if the rightmodels are chosen

Need to support research and the development

of showcase models

* By GEXSi from JatrophaWorld 2008 Miami


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To be attractive, business models

must now recognise:

The need to secure affordable feedstock

That investment in jatropha production is morethan securing access to vast areas of land

The importance of social and environmentalsustainability in feedstock production

The uncertainties and timescale in jatropha

production

That supply chains need to be established and

fostered.


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Jatoil Ltd

Jatoil is a sustainable global businessproducing renewable fuels with social &

environmental responsibility.


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Jatoil Corporate (ASX:JAT): a public

company Conduit for further development and delivery of

renewable energy technologies

Collaborate/partner with like-minded businesses

Perennial Bioenergy AS and Imperium Renewables, Inc

Service subsidiaries and JVs: loan & finance facilities

business planning

governance and systems

financial management

market development

technical development


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Jatoil development is based on:

Jatoils investment into jatropha businesses

Jatoil mandated to engage jatrophabiodiesel projects and businesses fordevelopment and co-investment

Attracting new investment in order to growJatoils jatropha businesses

Jatoil focused on staged growth with co-investors


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Jatoil structure provides for investment atvarious levels:

Jatoil LtdSydney

PT Biodiesel AustindoIndonesia

GreenEnergy BiofuelsVietnam

Newco

NT HBBT

Corporate Level

Country / Regional Level

Jat-Venture Stages 1, 2 & 3

Alliance partners

Alliance partners Alliance partners


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GreenEnergy Vietnam Biofuels JSC

Jatoil Ltd and GreenEnergy Biofuels Joint VentureAgreement May 2008

Initial Pilot project in Ninh Thuan approved byVietnamese Provincial Peoples Committees

Platform for future raising Competent local management

Test viability before major expansion/investment

Quality networks SNV Dutch NGO guidelines on win/win commercial relationships

Center for Biotechnology in Forestry expertise/technical relations

Ministry of Agriculture and Rural Development approval of best

use land allocation

Further investment on milestones achieved.


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Jat-Venture Stage 1

Agri-station that both proves the businessconcept and develops essential infrastructure forgrowth

Central office and warehouse

50-100ha model jatropha plantation

Plant propagation and nursery Refinement of jatropha varieties and associated

agronomy and crop management

Seed and oil processing facilities R&D facility

Local field training


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Jat-Venture Stage 2

Stage 2 expansion proves the commercial scale

Contract farming neighbouring Agri-station

Up to 5,000 ha in 2 year periodAgri-station now also for seed collection, processing

and possible refining

Local farmers supported with training, seedlings,fertilizer and management advice


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Jat-Venture Stage 3

Stage 3 commercial expansion to optimumplantation scale

Contract farming from 5,000 ha to 25,000 ha

Agri-station expanded and additional processingcapacity installed

Satellite centres established

Revenues within years 3-4


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Key features of attractive jatropha

business models: Secure access to CJO that is both affordable and

certified for social & environmental sustainability

Advanced value chain planning

Advanced supply chain development (preferably

with long term supply chain partners) High standard of management and corporate

governance

Plans with flexibility to respond to market changesyet with certainty for further investment.


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Attractive plans address the key

business risks Management

Production

Political

Market


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Our understanding of the risks in a

jatropha business plan is imperfect but growing!

Financial investors wary

Need more certainty and proof

Strategic investors ready

Need to secure feedstock

Prepared to share risks


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business models to attract investment into jatropha

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