Advanced Biofuel Center

Pongamia Biodiesel – Enhanced Economics & better break-even, BBA reports

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Source: Advanced Biofuel Center

PONGAMIA BIODIESEL BUSINESS PLAN

JAN 24, 2014 -- The Biodiesel Business Academy (BBA) has published enhanced Biodiesel Economics in a Study report Pongamia Biodiesel – Enhanced Economics & better break-even, on its work with pongamia, a legume tree that bears inedible oilseeds. With an effort to  ‘grow beyond oil, CJP has identified, developed and cultivated as many as 17 non-food oil crops. With years of continuing research, experiments and trials has provided an adage to find and develop 2nd generation biodiesel feedstock with low cost input technology. The CJP intensified its collaborative research approach with regards to perennial oil seeds bearing tree like Pongamia Pinnata, Moringa oliferia, Jojoba, simarouba, Mahua , Calophyllum etc. in combination with annual nonfood oil crops like castor, flax, safflower, camelina, colocynthis etc to have more oil yield per ha and to improve its product. The CJP’s mission is to perform cutting-edge plant science research in genetics, breeding and horticulture, and further develop technologies to allow for the economic commercialization and sustainability of energy farms globally.

Pongamia is an ancient tree that is native to Australia and India. It is frost tolerant, but not freeze-proof. It is also happens to be a legume, which is at the heart of what makes the business model so interesting. The tree yields a generous annual nut crop that is harvested with conventional shakers, such as those used by almond and other nut growers. That seed has approximately a 40 percent oil content that can be easily refined into high-grade biodiesel, biojet fuel, or even other high-demand biochemicals like oleic acid. The remaining seedcake can then be used as a high-protein animal feed or a high-nitrogen fertilizer. And because the tree is a legume, it is fixing nitrogen so the soils are improved and pasture grasses can even be intercropped for cattle grazing. The tree has a productive life of well over 50 years.

BBA, the knowledge arm of CJP is working towards scientific commercialization of nonfood biodiesel trees/crops that will lend credibility; reliability and scalability with regards to food security, energy security and sustainable development and carbon savings. As research continues to mount in an effort to find low-cost breeding, cultivation and harvesting methods of nonfood-based oil bearing crops such as jatropha, castor, moringa and algae for biodiesel production, CJP started commercial development of a legume tree Pongamia pinnata and developed special varieties of pongamia -  a highly productive variety of the plant and a set of best practices that will enable high oil yields.. Scientific findings and process on pongamia identified promising accessions with favourable traits for future establishment of orchards. Improved self-branching, early flowering and higher productivity. CJP’s elite Pongamia variety “Derris Indica(DI03SAP™)” will yield at Maturity as high as 1000 gallon oil per ha which shall reached as high as 3400 gallon in 15th year  with proper nutrition, and irrigation.  This is truly an exceptional amount of oil from an agricultural crop.

Yield Estimates: CJP’s Pongamia Pinnata

Approximate Yield/hectare @625 trees/hectare

Optimal yield

4 year

7 year

10 year

15 year

Seed ton

3.125

9.375

15.625

31.25

oil (36% of seed) ton

1.125

3.375

5.625

11.25

Meal

1.906

5.719

9.531

19.063

Protein

0.953

2.859

4.766

9.531

Starch

0.953

2.859

4.766

9.531

CJP has established test plot operations for cultivating and harvesting its elite lines of pongamia trees and after continuous research trials and experiments has enhanced the yield with fantastic economics. After a decade of work on Pongamia BBA is happy to establish the Pongamia as a viable biodiesel crop with as the Production cost of per barrel Biodiesel comes around US$ 42.52.

Production Costs

Biodiesel from 10 k Pongamia plantation:xth year

   Chemicals

Cost per barel

Chemicals and Ingredients

1.80

$/barel

  Total Chemical Cost

1.80

$/barel

$/barel

   Other Direct Costs

$/barel

Repairs & Maintenance

1.58

$/barel

Transportation

3.15

$/barel

Water

0.22

$/barel

Electricity

0.95

$/barel

Other

1.29

$/barel

  Total Other Costs

7.18

$/barel

$/barel

   Fixed Costs

$/barel

Depreciation

3.99

$/barel

Interest

2.60

$/barel

Labor & Management

4.02

$/barel

Marketing & Procurement

1.26

$/barel

Property Taxes, Insurance, etc.

0.42

$/barel

  Total Fixed Costs

12.28

$/barel

24.56

$/barel

   Total Costs

$/barel

Total Variable Costs

17.96

$/barel

Total Variable & Fixed Costs

42.52

$/barel

If we deduct the added benefit of Press cake, glycerin and carbon credits, the Pongamia biodiesel shall have no cost implication. There’s millions of acres on which pongamia could be farmed around the global without displacing food crop or arable land.

Understanding the years of journey from which the biodiesel industry has performed  over the years from soil to sky, to where it is today, BBA looks to introduce pongamia into the industry with ease and optimism.

 

 

 

Pongamia Biodiesel Business Plan

Year 4 to Year 11 Projections

10,000 hectare

CJP estimates the key financial figures for a company’s Pongamia Project over 11 years.  Th3e projections include abbreviated income and cash flow statements and a balance sheet.

Years

 

4

5

6

7

8

9

10

11

Income Statement

Net sales

$9 M

$21 M

$27 M

$36 M

$43 M

$47 M

$52 M

$112 M

Cost of goods sold

$4 M

$5 M

$6 M

$8 M

$11 M

$13 M

$15 M

$29 M

Net Operating Income

$5 M

$16 M

$21 M

$28 M

$32 M

$34 M

$37 M

$83 M

Operating expenses

$1 M

$1 M

$1 M

$1 M

$1 M

$1 M

$1 M

$1 M

Net Income

$4 M

$15 M

$20 M

$27 M

$31 M

$33 M

$36 M

$82 M

Cash Flow Statement

Beginning balance

$9 M

$24 M

$61 M

$100 M

$155 M

$219 M

$289 M

$367 M

Cash inflow

$9 M

$21 M

$27 M

$36 M

$43 M

$47 M

$52 M

$112 M

Cash outflow

$6 M

$16 M

$12 M

$19 M

$21 M

$23 M

$26 M

$53 M

Ending Cash Balance

$24 M

$61 M

$100 M

$155 M

$219 M

$289 M

$367 M

$532 M

Balance Sheet

Cash

$24 M

$61 M

$100 M

$155 M

$219 M

$289 M

$367 M

$532 M

Accounts receivable

$0 

$0

$0

$0

$0

$0

$0

$0

Inventory

$0

$0

$0

$0

$0

$0

$0

$0

Prepaid expenses

$0

$0

$0

$0

$0

$0

$0

$0

Total Current Assets

$24 M

$61 M

$100 M

$155 M

$219 M

$289 M

$367 M

$532 M

Fixed assets

$28

$33 M

$47 M

$63

$85

$108

$133

$191

Total Assets

$52 M

$94 M

$147 M

$218 M

$304 M

$397 M

$500 M

$723 M

Accounts payable

$4 M

$4 M

$6 M

$8  M

$11 M

$12 M

$15 M

$28 M

Short-term notes

Accrued & other liabilities

 

 

 

 

 

Total Current Liabilities

$4 M

$4 M

$6 M

$8 M

$11 M

$12 M

$15  M

$28  M

Long-term debt

$9 M

$2 M

$2 M

$0

$0

$0

$0

$0

Other long-term liabilities

 

 

 

 

 

Total Long-term Liabilities

$9 M

$2 M

$2 M

 

 

 

 

 

Shareholders' equity

$10 M

$10 M

$10 M

$10 M

$10 M

$10 M

$10 M

$10 M

Total Liabilities and Equity

$52 M

$94 M

$147 M

$218 M

$304 M

$397 M

$500 M

$723  M

Pongamia has attracted attention as pressure mounts to find sustainable alternative fuels to help meet countries' renewable energy targets and cut greenhouse gas emissions, without interfering with agricultural production. The medium-sized evergreen pongamia can grow on marginal arid or semi-arid land and is a nitrogen-fixing tree, which means that it helps fertilize the soil. 'The tree and oil composition look basically promising. Researchers at India's BBA  has honor to establish this untapped resource as alternative source for Bio- Diesel industry of future as pongamia is a strong candidate to contribute significant amounts of biofuel feedstock.

Therefore the Pongamia Pinnata trees must be regarded as a sure source of 2nd Generation Biodiesel and the foundation around which a profitable Business plan can be built for its ability to provide large amount of oil and its pure hardiness and stress handling ability. The Pongamia Pinnata is tree that has enough credentials:  a higher recovery and quality of oil than other crops, no direct competition with food crops as it is a non-edible source of fuel, and no direct competition with existing farmland as it can be grown on degraded and marginal land. As a legume it is also able to fix its own nitrogen from the soil, minimizing the need for added fertilizers.

PONGAMIA BIODIESEL BUSINESS PLAN: A feasibility study and a business plan are essential steps in developing a successful biodiesel business. However it is not easy to prepare an excellent business plan.

With its extensive experiences in the field, enhanced technology, plant science & professional knowledge,  effective consulting service and business intelligence CJP  can clearly understand the business model, products and services, production, marketing and provides all aspects of feasibility analysis and business development including assessments of the following: crop production, crushing, co-product markets, feedstock acquisition and contracting, technology analysis, risk analysis specific to biodiesel technology, feedstock, markets, and general project risks, market and  financial analysis.

We make the integration of our experience and professional knowledge with your information.  We provide in depth analysis of crop cultivation and crop care part of plan for which we have team of agronomist and plant scientists, and then we have engineers and experts in biodiesel industries to finish the technology and production part of business plan.  We have professionals in accounting to complete financial and economics part. CJP can offer the type of consulting that only numerous years of leadership in the biodiesel market can provide at an affordable price.

CJP can help clients identify the needs, opportunities and solutions of their local, regional and national markets. By identifying these needs and providing management direction, CJP can help in creating a perfect business plan in order to develop and manage an effective and successful biodiesel facility. The most critical component of any business plan is the pro forma, an educated view or projection of what the performance of a company is capable of, given a specific set of assumptions and conditions. CJP has been involved in identifying these needs for specific projects for a number of years and can help develop a realistic and obtainable:

ü  Income Statement

ü  Balance Sheet

ü  Capital Budget

ü  Cash Flow

ü  Break-even Analysis

ü  Sensitivity Analysis

ü  Assumptions Governing the Projections

These projections will be valuable in determining feasibility of the project, securing financing, attracting investment and guiding management so that the company can reach its full potential.

We provide readymade Pongamia Biodiesel Bbusiness plan for a size of 20 hectare and 100 hectare. You can order here

For 1000 ha and more we offer to formulate and provide a complete customized comprehensive Pongamia Pinnata Biodiesel business plan from farming to fuel. For this RFP may be sent here or mail to Director (Pongamia)

Director Pongamia

Biodiesel Business Academy

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