BIODIESEL PROJECT OVERVIEW

Presented By

G.D.KAMESWARA RAO

PROJECT GOALS
First Biodiesel manufacturing facility in the country to cater to the European Markets. P d Produce Biodiesel to meet the stringent European Bi di lt t th t i tE quality standards. Leader in Biodiesel manufacture in India Promote Jatropha / Pongamea Plantations in the country for the social justice and upliftment of poor f farmers.

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BIODIESEL PROJECT
New Millennium project Renewable source of Energy Agro-based Energy development Pioneering Effort 100% E Export O i t d U it t Oriented Unit Chennai Location T E F R Presentation - Dec 2005

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PRODUCT
Mono Alkyl Ester (Biodiesel) Conforms to Euro Norms EN 14214 Standards g q Light Yellow / Colorless liquid Additive for lubricity in # 2 Diesel

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PROBLEMS
Crude Petroleum prices sky rocketing 90% of transport industry depends on Petroleum products P t l d t Vehicle population increasing many fold all over the world Petroleum products cause lot of pollution and contribute for Global warming leading to natural calamities. l iti

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OPPORTUNITIES
Biodiesel is a potential replacement for # 2 Diesel. Reduces th pollution and green house R d the ll ti d h gases Renewable energy source Used as an additive to increase lubricity and increase vehicle life

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ADVANTAGES - BIODIESEL
Reduced Emissions Better lubricity and engine life Higher Flash Point Eco-friendly E f i dl Nontoxic Competitive Price Specific Customers
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EMISSIONS

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DISADVANTAGES
Congeals between 15O C to 8 OC. Additives needed during winter in Europe. 7.5% - 12.5% Lower Calorific Value than # 2 Diesel. Bulk Sales B lk S l - 3000 MT for Exports 500 MT for Domestic markets

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MARKET SUMMARY
Vast Market potential p p Biodiesel potential competitor Government support required initially p g j Cheap vegetable oil major constraint

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DIESEL CONSUMPTION
(in Million MT)

S.No Region
1 2 3 4
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2001 2002 2003 2004 2005*

279 280 286 293 296 286 286 290 293 295 38 37 37 37 38 1094 1103 1128 1166 1190
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North America Europe India Total World

DIESEL DEMAND

(In Million MT)

S.No Region SN R i

2005 2010 2015

1 North America 296 24 319 13 343 80 296.24 319.13 343.80 2 Europe 295.26 307.41 320.06 295 26 307 41 320 06 3 India 39.65 46.86 55.38
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BIODIESEL DEMAND

(In Mil ion MT)

S.No Region SN R i
1 N th A i North America 2 Europe 3 India
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2005 2010 2015

2.96 15.95 34.38 2 96 15 95 34 38 8.11 17.68 32.00 8 11 17 68 32 00 1.98 4.68 1 98 4 68 8.31 8 31
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BIODIESEL SUPPLY
(in Million MT)

S.No Region
1 2 3 North A i N h America Europe India

2005 2010 2015

0.30 2.28 17.31 0 30 2 28 1 31 3.00 13.45 21.66 0.03 0.22 1.67

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DEMAND SUPPLY GAP

(In Million MT)

S.No Region
1 2 3 4
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2005
5.11 1.95 1 95

2010

2015

North America Europe India

2.66 13.67 17.07 4.22 10.33 4.46 4 46 6.64 6 64

World major marke 9.72 22.36 34.04

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SELLING ARRANGEMENTS
Export Markets Direct Oil Companies Biodiesel Importers Accredited Marketers Large Fleet Owners Retailers Indian Markets Railways Oil Companies Transport Corporations Large Fleet Owners

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BIODIESEL PRICES
S.No Region
1 2 3 USA Germany India

Unit U it
US$ Euro Rs

Unit/ U it/ Lit

0.88 0.93 0 93 58.00

Rs./ R / Lit
40.48 52.08 52 08 58.00

Note: Pump Prices

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PRICES - USA

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PRICES - GERMANY

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COMPETITIVE ANALYSIS
Competitors Large number of Biodiesel plants are coming up in Europe and USA. i i E d USA Four large Palm Oil based Biodiesel plants coming up in Malaysia Many Biodiesel plants are in planning stage in India g A small 30 TPD plant is under construction 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 W ll developed Indian Industrial infrastructure Well d l d I di I d t i l i f t t facilities Low Capital cost for Biodiesel Plant in India p Jatropha / Pongamea oils give superior quality Biodiesel compared to CPO/ RBD Palm Olein
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COMPETITIVE ANALYSIS CONTD..

Weaknesses Additional transportation and handling of CPO/ RBD P l Ol i i th short term Palm Olein in the h t t Dependence on imported oils

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COMPETITIVE ANALYSIS, CONTD..

CPO based Competitors y - Malaysia - Indonesia g p Strength of Competitors - CPO / RBD Palm Olein available domestically y - Palm Diesel Technologies are well developed 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 more suitable for cold climates. - Jatropha / Pongamea plantations are under development in India.

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PROJECT FEATURES
100% Export Oriented Unit (EOU) 50% of Export Sales permitted as DTA p p Sales with concessional duty. Imported Oils as Feedstock Switchover to indigenous Jatropha / Pongamea oil gradually in 3-5 years period De-bond / Add Capacity to cater to Indian Markets in the long run.
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CAPACITY
33,000 TPA Biodiesel 3300 TPA Pharma Grade Glycerol (By (ByProduct) Offsite / Utilities and main plant can be easily expanded Minimum Economic capacity 10,000 TPA in India Minimum Economic size 33000 TPA (Exports) 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 Continuous process being evaluated Low pressure reaction process (Lurgi & Desmet) High pressure reaction process (Energea) (E )

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PROCESS
Batch process - not selected Continuous process being evaluated Low pressure reaction process (Lurgi & Desmet) High pressure reaction process (Energea)

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TECHNOLOGY
Twelve technology suppliers identified Four Suppliers regretted Seven Suppliers responded Lurgi, Desmet and Energea are short listed h t li t d

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TECHNOLOGY
Lurgi AG, Germany represented by Chemical Construction International, Delhi Desmet Ballestra, Italy represented by Desmet Ch f d B D t Chemfoods, Bangalore l Energea, Austria

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LURGI AG, GERMANY

Maximum number of reference plants Indian partner handles upto 125 TPD plants l t Strong in Edible oil Processing and Glycerol purification Use low pressure, low temperature p process. Total solution provider. y p Semi-turn key implementation.
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DESMET, BALLESTRA, ITALY

Large number of reference plants g g Strong in Edible oil Processing and Glycerol purification Use Low Pressure, Low Temperature process. Total solution provider. Semi-turn key implementation.

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ENERGEA, AUSTRIA
R&D Based company g p A few good reference plants No Indian partner p y purification Oil pretreatment and Glycerol p need to be tied up with other suppliers. g p , g p Use High pressure, High temperature process. Semi-turn key implementation.
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SPECIFICATIONS
SPECIFICATION Density 15C Viscosity 40C Flashpoint Fl h i t UNITS g/cm mm/s C EUROPE EN 14214:2005 0.86-0.90 3.5-5.0 120 min i * country specific 10 max 500 max 51 min 0.5 max 0.20 0 20 max GERMANY USA # 2 DIESEL DIN V 51606 ASTM 6751-03 EN 590:1999 0.875-0.90 0.82-0.845 3.5-5.0 1.9-6.0 2.0-4.5 110 min i 130 min i 55 min i summer 0 spr/aut -10 * country winter -20 20 specific 10 max 15 max 350 max 300 max 500 max 200 max 1 1 3 1 49 min 47 min 51 min 0.5 max 0.8 max 0.3 0 3 max
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CFPP Sulphur Water Cu corrosion max Cetane number Acid value Methanol
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C mg/kg mg/kg 3h/50 C 3h/50C mgKOH /g %mass

COMPANY MANAGEMENT
Professionally managed by Board Professional Directors will be inducted Systems and Procedures are in place

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PROJECT MANAGEMENT
Semi turnkey for ISBL-Main plant Cost plus for OSBL plant Reputed vendors and contractors will be involved T h l Technology supplier-long term li l t relationship will be established closure Orders placed only after financial closure. 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 Partner 2 Months for Pre-project activities Company to be incorporated Site recommended (Gummidipoondi). Decision to buy the land need to be taken. Technology to be decided Financial closure to be arranged

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IMPLEMENTATION SCHEDULE
S.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 Development 2 Building 3 Plant and Machinery - Placement of Order - Delivery at Site 4 Arrangement for power 5 Arrangement for Water 6 Erection of Equipments 7 Commissioning 8 Trial Run 9 P Procurement of R M t i l t f Raw Material 10 Training of Personnel 11 Commercial Operations 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 p y g p p
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PROJECT COST
(Rs. In Million)

S.no S no
1 2 3 4 5 6 7 8 9 10
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Details
Land and site development Buildings: Plant & Machinery Technical know-how and Consultancy fee Expenses on Training Misc-fixed assets Preliminary and Capital Issue expenses Pre-operative Pre operative expenses Provision for Contingencies Margin money for working capital Total

Cost
20.22 19.06 251.72 19.43 1.00 44.14 1.00 24.02 24 02 19.02 51.13 450.75
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SOURCES OF FUNDS
S.No A B Particulars Total Capital outlay Scheme of Finance -Equity Capital a. Indian Promoters, friends and relatives b. Private Placement c. Technology Provider d. Raw material supplier e. Marketing Distributor f. Preferential Shares / NRI Funds -Term loan (Rs. (Rs In Million) Sub-total 450.75 150.25 90.15

60.10

300.50

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CASHFLOW PLANNING
S.no S no Details
1 2 3 4

Cost

P romote rs E quity 90.15 Othe r Inve ste rs 60.10 T e rm Loa ns 300.49 300 49 T ota l 450.74

Mar 06- Jul 06Jun 06 Sep 06 90.15 0.00 60.10 0.00 26.50 88.10 26 50 88 10 176.75 88.10

(R s. In Million) Oct 06- Jan 07Dec 06 Mar 07 0.00 0.00 0.00 0.00 76.86 109.02 76 86 109 02 76.86 109.02

QUARTERLY FUND REQUIREMENT

39% 24%

1 2 3 4

17%

20%

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RAW MATERIAL SUPPLY

CPO/ RBD Palm Olein from Malaysia / Indonesia Used Vegetable Oils from USA / Europe Imported Jathropha Oil from African Countries Domestic sourcing of Jathropha / Pongamea oils Contract farming tie up with local farmers for Jathropha / Pongamea cultivation for supplies
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RAW MATERIAL PRICES

( (US$ / MT) ) CIF S.No 1 2 3 4 Particulars Crude Palm Oil (CPO) RBD Palm Olein Palm Stearin Used vegetable oils a. Europe b. USA c. c Middle East 5 6 Jatropha oil-Africa Jatropha / Pongamea oil- India 450 440 385 420 600 20.70 20.30 17.70 17 70 19.30 Best suited for Europe 27.60 Bulk not available Chennai 400 430 370 Rs./ Kg Remarks 18.40 Easy Availability and cheap 19.80 19 80 Better CFPP over CPO CFPP, 17.00 High CFPP. Not suitable for Europe Low CFPP and total product can be exported

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MATERIAL CONSUMPTION UNIT COST

Unit cost Require S.No 1 2 3 4 5 6 7 8 CPO Methanol Catalyst Acetic acid Citric Acid Phosphoric acid Bleaching Earth Acivated carbon Total Material cost p per MT of Bio-diesel
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of Material p per Kg g 18.97 22.05 42.00 47.31 50.60 40.23 9.61 9 61 59.71

BioDiesel BioDiesel Europe Rs./MT 17129 1991 620 233 4 99 39 245 20362 DTA Rs./MT 15294 1778 554 208 4 88 35 219 18180 Glycerol Rs./MT 19726 2293 715 268 5 114 45 282 23448

Material

ment Kg/MT g 1100 110 18 6 0.1 3 5 5

UTILITIES
Consum Rs./ ption Rs./ S.No Utility Unit Unit Unit / MT MT 1 Power KWH 3.50 120 420 300 750 82 2 Maximum Demand Charges KVA 3 Steam requirement MT 500 2 1000 4 Water KL 31.25 3 94 5 Fuel F l requirement (LDO) i t MT 19659 0.04 0 04 786 6 Total utility cost / MT 2382
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PRODUCTION COST BREAKUP

(YEAR 3)
S.No 1 2 3 4 5 6 7 8 9 10 11 12 Particulars Expected sales/Realization Raw Materials and Chemicals Utilities Factory wages and salaries Factory overheads Administrative Ad i i t ti expenses Total Sales expenses Financial expenses Depreciation D i ti Preliminary expenses written-off Provision for tax Profit after tax (Rs. In Million) Amount % 997.18 100.00% 736.81 73.89% 51.75 1 5.19% 19% 9.61 0.96% 7.10 0.71% 9.72 9 72 0.97% 0 97% 1.99 0.20% 41.65 4.18% 35.24 35 24 3.53% 3 53% 2.14 0.21% 11.72 1.18% 89.44 89 44 8.97% 8 97%
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FINANCIAL HIGHLIGHTS
S.No SN 1 2 3 4 5 6 7 8 9 10 12 13 Particulars P ti l Sales realisation Total Cost of Operations Gross profit Income Tax Profit after Tax Earnings per share Reserves and surplus Cash at hand Internal rate of return(Post Tax) Average DSCR Total Payback period Breakeven Point I II 886.38 941.78 724.37 770.66 162.01 171.12 162 01 171 12 7.54 9.48 72.82 79.42 4.85 4 85 5.29 5 29 57.79 114.68 95.17 161.11 26.23% 26 23% 2.42 40.28 Months 39.93% 40.74% 39 93% 40 74% (Rs. In million) III IV 997.18 997.18 816.98 819.35 180.20 177.83 180 20 177 83 11.72 12.70 89.44 91.07 5.95 5 95 6.06 6 06 174.07 235.09 204.51 252.58

39.71% 39 71%

38.26% 38 26%
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VARIENCE ANALYSIS
S.No
1 2 3 4

Particulars

IRR

DSCR PBP

Base Case 26.23% 2.42 40.28 Increase in Raw material cost by 5% 20.69% 1.98 50.72 Decrease in Selling price by 5% 20.70% 1.97 51.04 IIncrease iin R materiall cost b 5% 15 14% Raw t i t by 5%+ 15.14% 1.53 1 53 69.5 69 5 Decrease in sales by 5% IRR - Internal Rate of return; DSCR Debt service Coverage Ratio DSCRPBP - Payback Period
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CONCLUSIONS
Pioneering effort in Oil Industry Economic viability established Technical T h i l capability available bilit il bl Meeting highest quality standards in the world Market tie ups possible Raw materials management planned Professional management to keep the cost and time schedules Corporate plans in Agri sector feasible
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KEY POINTS FOR DECISION

Near term Company Capital Structure 100% EOU Registration Selection of Technical Collaborator Di Discussion with Marketing agencies in Europe i ith M k ti i i E / USA for Buyback and Product specifications Decide on plant configuration p g Order Placement for Basic and Detailed Engineering Designs and Equipment supply
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KEY POINTS FOR DECISION

Near term Selection of Local Civil and Electrical Contractors C t t Port Tankage facilities arrangements CPO / RBD Palm Olein Importation arrangements Jathropha / Used Vegetable oil importation arrangements

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KEY POINTS FOR DECISION

Long term Domestic sourcing strategy for g gy Jatropha / Pongamea oils Contract farming strategies Plantation strategies De-bonding / Exporting strategies after g p g g domestic oils supplies are established

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RISKS AND SOLUTIONS

Government policies, Duties and Taxes G t li i D ti dT - Developed Countries actively promoting Biodiesel. Giving liberal tax breaks and 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 not new. new - Necessary technologies are already available from Malaysia for low pour point palm diesel
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RISKS AND SOLUTIONS

Fluctuation i Fl t ti in CPO/ RBD P l Ol i prices Palm Olein i -Sourcing and developing domestic vegetable oils in the medium term Glycerol glut in the long run - R&D work going on in Developed Countries for development of new applications for Glycerol

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REWARDS
Enormous activity is going on in Europe and USA i promoting Bi di in ti Biodiesel. M l More th 3 than Million MT capacity created in the world. p p g p y Most of the plants operating at full capacity First entrants will have advantage of capturing the markets The company can become a leading player in Bio-energy industry. Equipped with Biodiesel plant, the Company can promote contract f t t t farming in India i i I di Helps in social upliftment of the Indian farmers p and poorer class
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