BioGreen Solutions Limited-

BGSL

Green product ideas for export

11/3/2008
AMITY SCHOOL OF BUSINESS, NOIDA

Submitted by:
o Sachin Sharma(E-44

o Hans Khari (E-22)

o Dhruv Tayal(E-18)

o Siddhant SahniE-48)
ACKNOWLEDGEMENT

The following project has been prepared on new green product ideas under the
subject of INTERNATIONAL MARKETING. A great amount of efforts have been
used to bring a contrast on this area.

We feel it to be our sincere duty to express our deep sense of gratitude to

those who inspired and helped us to conduct the study with knowledge and
expertise.

We express our inner gratitude to the AMITY SCHOOL OF BUSINESS, Noida for
providing us an opportunity to work on innovative field and preparing this
report.

We would like to acknowledge our sincere gratitude and respect to Mrs. RUCHI
KHANDELWAL, our Faculty guide-International Marketing, BBA Department,
ASB.

We would like to thank:

o IFFCO, AONLA (MARKETING DEPARTMENT)

o HINDUSTAN PETROCHEMICALS, NOIDA (MARKETING DEPARTMENT)

o BHARAT HEAVY ELECTRONICS, NOIDA (Assistant Technical MANAGER)

As under their guidance we got aware about the various system and
procedures which took while trading bio-chemicals or compounds. They guided
me with norms, certain laws and how can we decide which product is
marketable and which is not.

And lastly we thank everyone who helped us in making this report.

Thank you

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Contents :
ACKNOWLEDGEMENT....................Error: Reference source not found

PROJECT: GREEN PRODUCT IDEAS FOR EXPORTS......Error: Reference

source not found

BACKGROUND:.............................Error: Reference source not found

PROJECT BRIEF:............................Error: Reference source not found

BGSL- BioGreen Solutions limited..Error: Reference source not found

GREEN PRODUCT CHECKLIST.........Error: Reference source not found

BLENDING OF BIO-DIESEL.............Error: Reference source not found

PRODUCTION OF BIO-DIESEL: PROCEDUREError: Reference source not

found

PROCESS OF BIO-DIESEL PRODUCTION....Error: Reference source not

found

Supply base and Manufacturers....Error: Reference source not found

LEADING BIO-DIESEL PRODUCING NATIONS:. .Error: Reference source

not found

Bio fuel certification:....................Error: Reference source not found

Export of Bio Diesel- THE UNITED MEXICAN STATES..Error: Reference

source not found

EXPORT to-NAFTA (NORTH AMERICAN FREE TRADE ASSOSCIATION)

...................................................Error: Reference source not found

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EXPORT OF BIO-DIESEL- THE BOLIVORIAN REPUBLIC OF VENEZEULA
...................................................Error: Reference source not found

Marketing mix.............................Error: Reference source not found

PRICING OF BIODIESEL.................Error: Reference source not found

TRANSPORTATION OF BIODIESEL. .Error: Reference source not found

Promotional strategies.................Error: Reference source not found

Future Promotional Strategy of BGSCL. . .Error: Reference source not

found

Bio Diesel in India is virtually a non-starterError: Reference source not

found

Corporate Strategy Suggested for Big Indian Companies..........Error:

Reference source not found

FEASIBILITY

…………………………………………………………………………………………………………
…………..Error: Reference source not found

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PROJECT: GREEN PRODUCT IDEAS FOR EXPORTS
BACKGROUND: Depending on the nature of the product itself, raw materials used or
manufacturing process, the term ‘Eco-friendly’ lends itself to multiple
connotations:

a. Resource-saving or contamination-control products: These include energy-saving

electrical appliances or air-purifiers, the use of which directly benefits the
environment.

b. Organic materials: Examples include garments made from organic cotton (cotton
grown in a chemical free ambience - without the use of pesticides and chemical
fertilisers) and re-usable cotton shopping bags that substitute plastic bags.

c. Cleaner manufacturing processes: These refer to manufacturing processes that have

become more energy efficient or less contaminating and hence the end-product is
deemed as eco-friendly.

It must be noted that Eco-friendliness is a relative term. A regular cotton bag is eco-
friendly. If it is made from organic cotton, it becomes eco-friendlier. The
manufacturing of gypsum boards (used in the construction industry) releases a lot
of contaminants. New production methods have reduced the level of
contamination but not eradicated it completely – yet the output from the new
process may be deemed as eco-friendly.For the purpose of this project, we will
construe eco-friendliness in its broadest sense. The project is also not limited to
any specific industry. Products that do not meet green requirements currently but
can be adapted to meet a green criterion are of particular interest. New product
ideas are more critical than identifying products that are already being exported in
bulk and do not present a unique opportunity.

PROJECT BRIEF: Identify and analyze green products (or services) that are export-
worthy. Specific issues that need to be analyzed are:

a. What makes these products green? Are they commercially viable for exports, after
factoring freight costs & customs duties?

b. Is the supply base for these products stable? Who are the manufacturers? What is
their production capacity?

c. Current export destinations, volumes of exports and price indications?

d. Do such products require certification from importing countries? Can suppliers

provide such certifications?

5
e. Is there a direct or indirect substitute of this product? Are substitutes being
manufactured in other countries? If yes, can Indian manufacturers sustain their
export competitiveness?

f. How are manufacturers marketing these products?

BGSL- BioGreen Solutions limited

BGSPL’s mission lays down following aspect:-

 We at Bio-Green Solutions believe in products that are manufactured with

all of the eco friendly materials that can lend to durability, comfort and
performance gear and outdoor wear without compromising these
purposes. After all, durable eco friendly outdoor wear and gear that can
be reused over and over again promotes sustainability. And if eco friendly
outdoor wear can be recycled at the end of its term, it makes it an
investment for the planet.

BGSL’s Approach

• Green Products may seem to be odd or depict low business

opportunities .But in the long run; we all have to find substitutes for the
current product lines. The products currently being used are exhaustible
and very limited in quantity.

• To achieve our mission, BGSPL’s understands corporate responsibility,

undertakes several activities covering a broad spectrum of areas to
promote welfare of business associates and customer’s. The activities
envisaged to be covered are exhaustively defined in BGSL’s Bye-laws.

BGSL’s COMMITMENTS

• Our thirst for ever improving the services to customer’s and business
associates is insatiable, commitment to quality is insurmountable and
harnessing of mother earths' bounty to drive hunger away from India in
an ecologically sustainable manner is the prime mission.

• All that BGSPL’s cherishes in exchange is an everlasting smile on the face

of International consumer who forms the moving spirit behind this
mission.

6
BGSCL is a multinational company. The operations and Production of Bio-diesel
will be carried out in two nations. These are:-

 REPUBLIC OF VENEZUELA

 THE UNITED MEXICON STATES, We will produce Bio-diesel in these two

nations

Reasons for Selecting Venezuela

 It is the seventh largest producer of crude oil whereas sixth largest

exporter of oil.

 Economic Policies are flexible enough and our company will work as per
norms and standards of the legislative body.

 It has good relation with Latin America and United States.

 It will give us Price competitiveness because of cheap raw material.

 From Venezuela we will export Bio-Diesel to Sothern American nations in

PhaseI.

But as our production will increase in upcoming years we will target European
Unions, African nations and Asian countries.

Reasons for selecting MEXICO

 Mexico is the fifth largest producer and tenth largest exporter of crude
oil.

 It is a member of NAFTA(NORTH AMERICAN FREE TRADE NATION)

 United States and Canada have high demand for Bio-diesel which we can
meet. We will somewhat adversely affect exporters from European union.
They are currently the biggest exporters to this nation.

 No tariff barriers within the area

 It is a newly industrialized country

 It has twelfth largest in economy in terms of GDP

 The entire Energy Production of Mexico comes under Federal Commission

of energy. But it allows companies to produce crude oil, obtain petroleum
products and convert them to Bio-diesel.
7
  They are aiming at Sustainable environment.

GREEN PRODUCT CHECKLIST

MANUFACTURER: Bio-Green Solutions Cp-operative

Product: BIODIESEL

Biodiesel refers to a non-petroleum-based diesel fuel consisting of short chain

alkyl (methyl or ethyl) esters, made by transesterification of vegetable oil or
animal fat (tallow), which can be used (alone, or blended with conventional
petrodiesel) in unmodified diesel-engine vehicles. Biodiesel is distinguished
from the straight vegetable oil (SVO) (sometimes referred to as "waste
vegetable oil", "WVO", "used vegetable oil", "UVO", "pure plant oil", "PPO")
used (alone, or blended) as fuels in some converted diesel vehicles. "Biodiesel"
is standardized as mono-alkyl ester and other kinds of diesel-grade fuels of
biological origin are not included.

BASIC GRITERIA FOR GREEN PRODUCTS (ECO-FRIENDLY)

a. Resource-saving or contamination-control products: These include

energy-saving electrical appliances or air-purifiers, the use of which
directly benefits the environment.

b. Organic materials: Examples include garments made from organic

cotton (cotton grown in a chemical free ambience - without the use of
pesticides and chemical fertilisers) and re-usable cotton shopping bags
that substitute plastic bags.

c. Cleaner manufacturing processes: These refer to manufacturing

processes that have become more energy efficient or less contaminating
and hence the end-product is deemed as eco-friendly.

SPECIFIC CRITERION FOR GREEN PRODUCTS

1. SUSTAINABILITY: Is there a written, working environmental

policy in place? Products come under this category only and if they
meet norms and standards of an individual nation. It is important that

8
 during International Trade other country looks and makes and effort to
comprehend the product. There are Different environmental policies
.These are in written form .If a product abides by the policies it is termed
as a GREEN PRODUCT.

2. USAGE: Does this policy strive to make important

improvements in manufacturing, reducing and reusing first, then
recycling? This includes lots of things. It begins from the initial stages
i.e.; manufacturing and ends after the product is disposed. It talks about
reducing pressure on existing resources and using them a bit more
judiciously.

3. TESTING: Do they comply with their industry’s voluntary testing

programs? There are certain policies, standards and norms of any
industry. Labelling a product requires various types of test and hence it
becomes a crucial stage.

BLENDING OF BIO-DIESEL
Blends of biodiesel and conventional hydrocarbon-based diesel are products
most commonly distributed for use in the retail diesel fuel marketplace. Much
of the world uses a system known as the "B" factor to state the amount of
biodiesel in any fuel mix fuel containing 20% biodiesel is labelled B20, while
pure biodiesel is referred to as B100.It is common to see B99, since 1%
petrodiesel is sufficiently toxic to retard mold. Blends of 20 percent biodiesel
with 80 percent petroleum diesel (B20) can generally be used in unmodified
diesel engines. Biodiesel can also be used in its pure form (B100), but may
require certain engine modifications to avoid maintenance and performance
problems.

BGSCL BLENDED BIO-DIESEL

BLENDED BIO-DIESEL produced by our company has different labels i.e.

• 20 % BIO-DIESEL(B 20)

B 20 is a bio-diesel that blends 20 % of bio-chemical with 80 % of petro-diesel.

This will be used in for following:-

 AUTOMOBILES : MINI CARS,SUVs, TRACTOR,MINI-TRUCK

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  ENERGY PRODUCTION

 GENERATORS

 DOMESTIC SUPPLY

• 40 % BIO-DIESEL

B 40 is a bio-diesel that blends 40 % of bio-chemical with 60 % of petro-diesel.

This will be used in for following:-

 AUTOMOBILES : MINI CARS, SUVs, TRACTOR, MINI-TRUCK

 ENERGY PRODUCTION, GENERATORS and DOMESTIC SUPPLY

• 75 % BIO- DIESEL

B 75 is a bio-diesel that blends 75 % of bio-chemical with 25 % of petro-diesel.

This will be used in for following:-

 ENERGY PRODUCTION

 SMALL –SCALE INDUSTRIES

 DOMESTIC SUPPLY

• 100 % BIO-DIESEL

B 100 is a bio-diesel that blends 99.2 % of bio-chemical with .8 % of petro-

diesel. This will be used in for following:-

 GOBAR-GAS PRODUCTION

 SMALL –SCALE INDUSTRIES

 DOMESTIC SUPPLY

EXAMINING THE PRODUCT’S COMPOSITION

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This is done to label a product as a “green product”. We have a general
methodology used by certain industries to accept a product which would result
in Sustainable development.

S.NO. CHECKLIST PRODUCT ATTRIBUTE

1 What are the raw materials BIO-DIESEL is a resource-saving GREEN

used to create the product? PRODUCT hence: Diesel is the main
component. But it is blended with bio
molecules or biochemical that helps us
in reducing burden on existing
petroleum product.

2 And where do they come Bio-chemicals come from cultivation of

from? culture, farm products and through
vegetative propagation.

3 Did the materials come from Yes, the blended bio-diesel is

renewable resources? characterised by products that are
renewable source of energy.

4 Is the manufacturing process Yes, the process is energy efficient.

energy efficient?

5 Does the manufacturing Since blending is done with natural

process release harmful product , residuary is used as manures
substances? in fields.

6 Are adhesives needed to No.

make the product viable?

7 Are coatings or finishes No.

needed to make the product
viable?

EXAMINE OTHER ASPECTS OF THE PRODUCT

S.NO. CHECKLIST PRODUCT ATTRIBUTE

1 Does the product nurture Bio-Diesel is altogether a different

11
 the health and well-being of product. It affects occupants indirectly.
its occupants? But, it is still far better than petroleum
products.

2 Does the product do the job Yes

well?

3 How much energy does it It uses very less energy but very time
use? consuming.

4 Does the product release Volatile organic Compounds are released

VOCs? At what rate? both at manufacturing and while product
is used. But it is 35% less than normal
petroleum product.

5 How is the product Pipelines

packaged and transported?

6 Can the product be Yes

maintained in a benign
manner?

7 Using safe cleaning Yes, the company is emphasizing on

products? using only those product that do not
harm nature

EXAMINE STRATEGIES FOR DISPOSAL

S.NO. CHECKLIST PRODUCT ATTRIBUTE

1 Is the product durable? Product is durable, partly bio-

Biodegradable? Recyclable? degradable and recyclable.

2 Can the parts be separated Yes.

for recycling?

3 Can it be made into It can be made into Bio-Fertilizer and

something else? manures.

4 Can the product be returned NO.

to its manufacturer at the
end of its useful life?

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COST CONSIDERATIONS

S.NO. CHECKLIST PRODUCT ATTRIBUTE

1 What is the price range for ---

the product?

2 Does the manufacturer ----

provide life cycle cost
analysis on this product?

PRODUCTION OF BIO-DIESEL: PROCEDURE

PRODUCTION of Bio-Diesel or alkyl esters is done by three ways. These are as

follows:-

• Base catalyzed:-Transesterification of the oil with alcohol.

• Direct acid catalyzed etherification of the oil with methanol.

• Conversion of the oil to fatty acids, and then to Alkyl esters with acid
catalysis.

The majority of the alkyl esters produced today are done with the base
catalyzed reaction because it is the most economic for several reasons:

*Low temperature (150 F) and pressure (20 psi) processing.

*High conversion (98%) with minimal side reactions and reaction time.

*Direct conversion to methyl ester with no intermediate steps.

*Exotic materials of construction are not necessary. The general process is

depicted below. A fat or oil is reacted with an alcohol, like methanol, in the
presence of a catalyst to produce glycerine and methyl esters or biodiesel. The
methanol is charged in excess to assist in quick conversion and recovered for
reuse. The catalyst is usually sodium or potassium hydroxide which has
already been mixed with the methanol.

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NOTHING WASTED:

ProcessOutput Cycle ProcessInput Cycle

ALCOHOL

FERTILIZER ALCOHOL
CATALYST
GLYCERINE
OIL

METHYL
ESTER

 ALCOHOL-12% ALCOHOL+FERTILIZER=5%

 CATALYST-1%

 GLYCERINE-9%

 Oil-87%

 METYL ESTER-87%

OIL USED: PALM OIL OR ZATROPHA OIL

Palm oil consists of the glycerides of long-chain fatty acids. The carbon chain in
these fatty acid residues are comprised of an even number of carbon atoms
(typically from 12 atoms (lauric acid) to 20 atoms (arachidic acid) in length)
with roughly half of the oil molecules showing some unsaturated carbon-to-
carbon bonds. Typically nine major fatty acid residues are found in the
glycerides which make up palm oil (see Table 1). Because glycerol is a trihydric
alcohol, up to three of these fatty acid residues can be attached to the glycerol
structure. But there is no reason to suppose that the three attached to any one
molecule are identical.

There are therefore many different molecules available for the reaction with
methanol in the transesterification reaction which produces the palm-oil methyl
esters (POME). And it can be anticipated that due to variable saturation,

14
variable chain length and steric hindrance within the glyceride molecule that
each reacts at a slightly different rate.

 Chemical reaction for process:

PROCESS OF BIO-DIESEL PRODUCTION

15
COMPLETE READY TO RUN BIO-DIESEL PROCESSOR

MARKET SEGMETS

 ELECTRIC GENERATION

o Diesel has been used to produce electricity. Our various variants

can be used in generators to produce electricity.

o Temporary backup petroleum diesel-fuelled generators typically

operate in emergencies without the benefit of exhaust after-
treatment to reduce emissions. Using alternative fuels for these
necessary backup power sources is a cost effective method of
protecting the environment. Fuelled on 100% biodiesel (B100),
these generators help reduce emissions compared to petroleum
diesel in several key areas. Hydrocarbons, a contributing factor in
the localized formation of smog and ozone, and sulphur emissions,
a major component of acid rain, are essentially eliminated with the
use of B100. The exhaust emissions of carbon monoxide, a
poisonous gas, are about 50% lower in biodiesel than carbon
monoxide emissions from petroleum diesel. Particulate matter, a
human health hazard, is reduced by a third, with the smaller
particulates reduced by over two thirds.

 FARMING

Biodiesel on the Farm

o Farmers are becoming a strong customer base for biodiesel.

Biodiesel provides an opportunity for farmers to create demand for
the crops they grow through on-farm use.

o BGSCL has encouraged all farmers to ask their fuel distributors to

carry biodiesel in at least a twenty percent blend (B20). Building
demand at a grassroots level is critical to the addition of biodiesel
to terminals on a large national scale. Although biodiesel is
compatible with existing diesel technology, including diesel tanks
and other infrastructure, some petroleum distributors may choose
to have separate tanks for biodiesel. Adding those tanks now to

16
 meet farmer demand will help ensure that the infrastructure is in
place to meet future demand from the general public.

 MARINE

o Biodiesel is an obvious candidate for use in marine

applications. Independent tests have found that pure biodiesel is
non-toxic, readily biodegradable and essentially free of sulphur and
aromatics.

o Biodiesel will not harm fish. The 96-hr.

LC50 (lethal concentration) for Bluegills
for C16-18 methyl esters was greater than
1,000 mg./L. Concentrations above 1,000
mg/L are deemed "insignificant" according
to NIOSH (National Institute for
Occupational Safety and Health)
Guidelines in its Registry of the Toxic
Effects of Chemical Substances.

 MINING

o Biodiesel may offer safe, practical applications in

underground mining applications. Biodiesel is made from
renewable fats and oils, such as vegetable oils, through a simple
refining process. One of the main commodity sources for biodiesel
is soybeans grown worldwide.

o Biodiesel is safer to use than petroleum diesel. The flash

point for biodiesel in its pure form is a minimum of 200 degrees
versus about 125 degrees Fahrenheit for regular #2 diesel.
Although fires are not a frequent occurrence in mines, they can be
devastating and diesel equipment is often involved. Biodiesel can
help eliminate that concern.

 PASSENGER VEHICLES

o Biodiesel blends operate in diesel engines just like petroleum

diesel. B20 works in any diesel engine, usually with no
modifications to the engine or the fuel system. B20 also provides
similar horsepower, torque, and mileage as diesel.

o Biodiesel further enhances the advantages of diesel by reducing

vehicle emissions. B20 – a 20 percent blend of biodiesel and
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 conventional diesel – reduces emissions of hydrocarbons by 20
percent and carbon monoxide and particulate emissions by 12
percent. It reduces sulfur on average by 20 percent and is nontoxic
and biodegradable. Biodiesel is also a domestically produced,
renewable resource that contributes to the U.S. economy and
independence from foreign oil.

Supply base and Manufacturers

The supply base for the product is stable. The essential product that company
requires is Petroleum Diesel. The main objective hence is to satisfy the supply
and demand equation.

Other requirements for production of Bio-Diesel

 VEGETABLE OIL

 ANIMAL FAT (TALLOW)

 ALGAE

 AGRICULTURAL PRODUCTS.

So, what we can do is: Controlling the production of critical inputs for Bio-diesel.
This our company BGSCL is do through:-

 SETTING UP OIL REFINERIES OFF-SHORES IN MANY PARTS OF THE WORLD

 20,000 ACRES OF LAND THAT WILL PRODUCE ESSENTIAL AGRICULTURAL

INPUTS.

 OUR RESEARCH AND DEVELOPING(DEPARTMENT) HAS BEEN MADE

POWERFUL AND A VERY IMPORTANT PORTION OF OUR INCOME GOES
INTO :-

 DEVELOPING NEW CRITICAL INPUTS

 CULTIVATING CULTURES.

Worlds leading Biofuel companies:

• Alcard Chemical Group Inc., New Britain Palm Oil Limited, Pacific Ethanol,
Inc., Australian Biodiesel Group (ABG) Limited, Bio-Extraction Inc.
Biofutures International plc, BlueFire Ethanol Fuels, Inc. China Clean
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 Energy Inc., Australian Renewable Fuels Limited, Green Plains Renewable
Energy, Inc., H2Diesel, Kreido Biofuels, Mission Biofuels Limited, NexGen
Biofuels, Panda Ethanol Inc., Southridge Enterprises, U.S. Sustainable Energy,
Pure Biofuels, Rentech Inc. Syngas International, Diversa Corporation, Earth
Biofuels Inc,EOP Biodiesel AG, Ethanex Energy, Inc. Green Star Products, Inc.
Imperial Petroleum, Inc. International Fuel Technology, Inc., Methanex
Corporation, M.P. Evans Group PLC, US BioEnergy Corporation.

LEADING BIO-DIESEL PRODUCING NATIONS:

S.N COUNTRY PRODUCTION PRODUCTION FEEDSTOCK

O. (mn ltrs) (mn Gallons)
1 Germany 1,921 507 Rapeseed
2 France 557 147 Rapeseed
3 United States 284 75 Soy beans
4 Italy 227 60 Rapeseed
5 Czech Republic 136 36 Rapeseed
6 Austria 85 22 Rapeseed
7 Spain 84 22 Rapeseed
8 Denmark 80 21 Rapeseed

9 Poland 80 21 Rapeseed
10 Spain 74 20 Rapeseed

11 United Kingdom 74 20 Rapeseed

12 Brazil 70 18 Rapeseed
13 Australia 57 15 Soyabean

14 Sweden 7 2 Soyabean
Other Countries 102 27

World 3,762 994

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Bio fuel certification:

Laws of the World Trade Organization

Relevant to the Biofuels Industry Within the emerging Biofuels trade context,
three crucial sets of issues concerning the law of the World Trade Organization
(WTO) are relevant both for countries that are providing significant amounts of
support to their bio-fuel industries as well as countries that would be interested
in exporting bio-fuels.

These are:

• How should bio-fuels be classified – are they agricultural, industrial or

environmental goods, and what are the implications of each for WTO members’
obligations? What are the options for reach-in a more uniform classification
and for possible trade liberalization?

• How should subsidies to promote the production or consumption of Biofuels

be considered from the perspective of existing or any planned WTO rules?
How should possible “cross-subsidization” (the increase in by-products as a
result of subsidies to Biofuel production or consumption)be evaluated?

• What is the consistency of domestic regulations and standards—for example,

mandates requiring the use of Biofuels or fuel content requirements—with WTO
rules on international regulations and technical barriers to trade? This section
will also address how WTO rules apply to Biofuels preferences and mandates in
public procurement.

• What is the consistency of domestic regulations and standards—for example,

mandates requiring the use of Biofuels or fuel content requirements—with WTO
rules on international regulations and technical barriers to trade?

IBB: INTERNATIONAL BIO-DIESEL BOARD

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Produced biodiesel can not be directly supplied to the market. It is supplied to
the market through the certified biodiesel producers and contracted importer
companies. Importer companies harmonise diesel oil and biodiesel in their
warehouse and than supply to the market.

Importer companies have to harmonise biodiesel and diesel oil and than sell.
Harmonisation has to be realised under control of Custom Office

International certification systems have two major elements:

1) Rules that describe needs and performance of the certification and

2) The standards and accreditation procedures

The standards define the aim of certification and describe the product or
production, Process specific requirements to be fulfilled for certification.
Standards are either developed by the highest-level body, i.e. the international
panel, or by an expert panel, which is appointed by the international panel.

The more generic international standards are often specified for the national
level taking specific (national) conditions into account 18 by the help of the
national representatives. In the following chapter different kind standards and
the process of formulating sustainability standards are described.

The most common used certification used for product such as BIODIESEL is
AMERICAN SOCIETY FOR TESTING AND MATERIAL I.e. ASTM. Then these
products are labelled as D 6751.Where “D” is the product code while the
number shows parameters in which quality has been measured.

Another important aspect in this is BQ-9000

OBJECTIVES OF BQ-9000

 To promote the commercial success and public acceptance of biodiesel

 To help ensure that biodiesel fuel is produced to and maintained at the

industry standard, ASTM D 6751

 Program requirements are complementary to ASTM D 6751.

 These requirements are generic and independent of any specific

organization or process

 Tells you WHAT...not how

 Allows YOU to determine level of complexity

21
  SAY what you do! ... DO what you say!

 Applies to a wide range of company sizes

Who and What are Accredited

Two accreditations possible for companies:

 BQ-9000 Accredited Producer

 BQ-9000 Certified Marketer

BQ-9000 accredits companies, not fuel.

 There is no such thing as 'BQ-9000 Biodiesel'

 BQ-9000 does, however, help ensure that biodiesel produced and sold will
meet D 6751.

To outline a system for monitoring the production of biodiesel to the

ASTM D 6751

 SPECIFICATION

The manufacturer or supplier provides an importing country with the product

attribute, product specification, product performance etc. The host nation then
collects sample of the product and then subjects it to supervision and nature of
the product.

 SAMPLING

Product samples are collected and sent either to laboratories or to some other
that will check and measure product attribute and its specification. Here
primary objective is to collect maximum samples.

 TESTING

22
The Product is then tested through the measures and apparatus that they have
to carry out such process. In case of chemical and Hazardous product it is done
in well-equipped laboratories.

 STORAGE

Storage varies from product to product. In case of bio-diesel it becomes

critically important because it is somewhat volatile in nature and too much
humidity affects its quality.

 RETAIN SAMPLES

Some samples are retained for further studies or references.

 SHIPPING

In simple terms it is organised transfer of goods through water to a specific

position.

FORMAT FOR BQ-9000 CERTIFICATION

Property ASTM Method Limits Units

Calcium & Magnesium, EN 14538 ) 5 max ppm (ug/g

combined

Flash Point (closed cup) D 93 93 min Degrees C

Alcohol Control (One of the

following must be met)

1.Methanol Content EN14110 0.2 Max . % volume

2. Flash Point D93 130 Min Degrees C

Water & Sediment D 2709 0.05 max . % vol.

23
Kinematic Viscosity 40 C , D 445 1.9 - 6.0 mm /sec.

Sulfated Ash . D 874 0.02 max % mass

Sulfur S 15 Grade D 5453 0.0015 max. (15) % mass (ppm)

SULPHUR S 500 Grade D 5453 0.05 max. (500) % mass (ppm)

Copper Strip Corrosion . D 130 No. 3 Cetane D 613 47 min

max

Cloud Point D 2500 Report Degrees C

Carbon Residue. 100% sample D 0.05 max % mass

4530*

Acid Number . D 664 0.50 max mg KOH/g

Free Glycerin D 6584 0.020 max . % mass

Total Glycerin . D 6584 0.240 max % mass

Phosphorus Content . D 4951 0.001 max % mass

Distillation, . T90 AET D 360 max Degrees C

1160

Sodium/Potassium combined EN 14538 5 max ppm

Oxidation Stability EN 14112 3 min hours

24
Workmanship Free of undisclosed water, sediment, & suspended matter

BOLD = BQ-9000 Critical Specification Testing Once Production Process

Under Control

The carbon residue shall be run on the 100% sample.

Export of Bio Diesel- THE UNITED MEXICAN STATES

PROCEDURE—JOINT VENTURE

SETTING UP PRODUCT BASE

 Two oil refineries in Mexico and produce petroleum products on

our own.

If we buy crude oil or even diesel it will add on to our cost .It will make us less
competitive in International market. So we will acquire semi-operational oil-
refineries. This will give us opportunities to meet high demand of bio-diesel in
NAFTA.

 From our Refineries we will obtain diesel and transfer it to our

Bio-diesel plant.

The diesel that we obtain from these refineries will be sent to our Bio-diesel
plant where we will process it and convert it into bio-diesel. Bio-fuels are a
great business opportunity and it would help Mexico’s economy.

 Import vegetable oils from Venezuela.

BGSCL has a subsidiary running in Venezuela. Venezuela is one of the biggest

producers of the vegetable oils. Venezuela is not too far from the importing
nations, so the import from there will help us in our cost retention and
minimization.

BGSCL STAKE IN BUSINESS

 Federal Commission of Energy Board, as one of our dominant

partner: FCEB is a legislative body that governs the entire regulation
and production of electricity in the nation. Without involving FCEB it will
25
 be very tough to operate in Mexico especially in Energy sector. So, we
will have their stake in the Bio-diesel Company of ours to an extent of
35 %. This will keep us acquainted with legislative reforms and the
policies formulated within the nation.

 Second Partnership will be with a ABES Oil Ltd. Company which

has its origin in Mexico: We will also have stake or partnership of a
local oil producing company i.e. ABES Oil Ltd. This will reduce some of our
financial risk. As, they are from the same nation they will help us in
maintaining Public Relations to an extent. Their share will be somewhere
around 25 %. A good amount of local and technical expertise will be
made available.

 BGSL will still have the main share: Bio-Green Solution limited will
definitely have the main share i.e.45 %. We will work in accordance with
policies and cultures of the nations

EXPORT to-NAFTA (NORTH AMERICAN FREE TRADE

ASSOSCIATION)

The North American Free Trade Agreement is a trilateral trade bloc in

North America created by the governments of the United States, Canada, and
Mexico. In terms of combined purchasing power parity GDP of its members, as
of 2007 the trade bloc is the largest in the world and second largest by nominal
GDP comparison.

DEMAND FOR BIO DIESEL IN NAFTA

S.No. NATION DEMAND (Million DEMAND(Million

Ltrs) Gallons)

1 U.S.A. 1,850 488.384

2 CANADA 227 60

DEMAND MET BY NATIONS FOR U.S.A.

S.No. NATION SUPPLY (Million SUPPLY(Million

26
 Ltrs) Gallons)

1 GERMANY 700 185.18

2 FRANCE 230 61

3 AUSTRIA 85 22.48

4 SPAIN 120 31.74

5 BRAZIL 80 21.16

6 OTHERS 635 167.98

DEMAND MET BY NATIONS FOR CANADA

S.No. NATION SUPPLY (Million SUPPLY(Million

Ltrs) Gallons)

1 GERMANY 125 33.06

2 FRANCE 80 21.16

3 AUSTRIA 15 3.96

4 OTHERS 7 1.85

 BGSCL PRODUCTION CAPACITY: .8 Million Gallons or 3.02 Million litres.

 BGSCL will supply .57 Million Gallons to U.S.A. and .23 million gallons to
CANADA.

ADVANTAGES FOR BGSL IN TERMS OF TRADE

 Mexico is the fifth largest producer and tenth largest exporter of crude
oil.

 It is a member of NAFTA(NORTH AMERICAN FREE TRADE NATION)

27
  United States and Canada have high demand for Bio-diesel which we can
meet. We will somewhat adversely affect exporters from European union.
They are currently the biggest exporters to this nation.

 No tariff barriers within the area will make us more price competitive.

 We will get support from Mexican govt. in terms of trade. They have
stake in our Mexican subsidiary.

 Production is predicted to increase by 22 % in every financial year.

 We have huge market demand and good retail network within the region.

EXPORT OF BIO-DIESEL- THE BOLIVORIAN REPUBLIC

OF VENEZEULA
PROCEDURE—GROUND FIELD OPERATION.

SETTING UP PRODUCT BASE

 Acquire one oil refineries in Venezuela and produce petroleum

products on our own.

If we buy crude oil or even diesel it will add on to our cost .It will make us less
competitive in International market. So we will acquire semi-operational oil-
refineries. This refinery will be setup in Sant Cristobal (STATE-TACHIRA).

 From our Refineries we will obtain diesel and transfer it to our

Bio-diesel plant.

The diesel that we obtain from these refineries will be sent to our Bio-diesel
plant where we will process it and convert it into bio-diesel. Bio-fuels are the
best non-conventional source of energy. Hence, we would emphasis on
technical aspects of cost reduction without compromising with nature.

 We will buy vegetable oils from PRODUCERS

Venezuela is one of the biggest producers of the vegetable oils. We will export
Vegetable oils from here to Mexico because here we will get in bulk and at a
cheap price.

BGSCL STAKE IN BUSINESS

28
  BGSCL will operate independently

Bio-Green Solution Co-operative will perform operation independently in

Venezuela. Reason being it is neither obligatory nor do we think we would want
to get in any sort of joint venture.We will emphasis more on Production
efficiency and meeting market demand within South America.

EXPORT TO –BOLIVIA, CHILE, EUCADOR:

In Phase I we will cover only three counties of South America i.e. Bolivia, Chile
Ecuador.

DEMAND FOR BIODIESEL IN :Bolivia, Chile, Ecuador:

S.No. NATION DEMAND (Million DEMAND(Million

Ltrs) Gallons)

1 BOLIVIA 25 6.61

2 CHILE 30 7.96

3 EUCADOR 15 3.968

DEMAND MET BY FOLLOWING NATIONS FOR BOLIVIA

S.No. NATION SUPPLY (Million Ltrs) SUPPLY(Million

Gallons)

1 BRAZIL 15 3.96

2 PERU 7.5 1.98

3 SWEDEN 2.0 .529

4 OTHER’s .5 .13

DEMAND MET BY FOLLOWING NATIONS FOR CHILE

S.No. NATION SUPPLY (Million Ltrs) SUPPLY(Million

29
 Gallons)

1 PERU 10 2.64

2 SWEDEN 2.5 .66

3 OTHER’s 17.5 4.62

DEMAND MET BY FOLLOWING NATIONS FOR EUCADOR

S.No. NATION SUPPLY(Million Ltrs) SUPPLY(Million

Gallons)

1 CZECH REPUBLIC .1 .0264

2 SURIAME .18 .047

3 BRAZIL .2 .052

4 OTHER’s .02 .0052

 BGSCL Production capacity is .47 million gallons or 1.766 million litres.

 TARGET DISTRIBUTION: BOLIVIA - .26 million gallons

o CHILE - .16 million gallons

EUCADOR -.05 million gallons

ADVANTAGES FOR BGSCL IN VENEZEULA

 It is the seventh largest producer of crude oil whereas sixth largest

exporter of oil.

 Economic Policies are flexible enough and our company will work as per
norms and standards of the legislative body.

 It has good relation with Latin America and United States.

 Very Cheap Vegetable Oils.

 From here we can also export vegetable oils to our subsidiary In

Mexico.We will have two Advantage
30
We can export in bulk. This will be done at a cheaper rate because of law tariffs
within the two nations.

Marketing mix

PRODUCT --- BIO-DIESEL

PRODUCT DESIGN --- CHEMICAL

FEATURES

• Bio-diesel is a blend of Diesel and Vegetable oils. It is a green product

that would protect environment from increasing Suspended Particulate
matter in air.

• It would reduce burden on the current use of Petroleum products.

COMPANY LOGO:

PRODUCT QUALITY ----BQ-9000 Certification, ASTM and other National

environment policies.

PACKAGING

PRODUCT VARIANTS IN BIO-DIESEL

• B-20(Blended Biodiesel 20)

• B-40(Blended Biodiesel 40)

• B-75(Blended Biodiesel 75)

• B-100(Blended Biodiesel 100)

We have discussed about these product attributes earlier. These are Product
variants that we are offering to Consumers.Non-Conventional Source of Energy

31
are $ 1 Trillion opportunity. It is a time where we are facing an immense
pressure on our current Petroleum Product. It is said that these Products would
last in a period of 50 years. We have to do something for our environment and
future generation. We have to utilize our resources judiciously so that Natural
resources are not exhausted.

PRICING OF BIODIESEL
PRICING METHOD : MARKET PENETERATION

We have to use this Pricing strategy because there are lots of substitutes
available for Bio-diesel.For Example :Diesel,CNG and other Petroleul Product
line would give us completion and would make our survival in market
impossible.

COST OF BIO-DIESEL PRODUCTION(IN USD) : FOR FIRST FINANCIAL YEAR

FIXED COST IN USD($)

PLANT COST 33,765,622.08

LABOUR COST @ $ 5/hr 2000 labour 220,000

CERTIFICATION AND PATENT COST 25,000

SETTING UP LABS 75,000

VARIABLE COST

WORKING CAPITAL 3,000,000

SALARIES PAID 1,800,000

MATERIAL CONSUMPTION 300,000

SELLING AND DISTRIBUTION CHARGES 800,000

IMPORT OF TECHNOLOGY 200,000

TOTAL COST =FIXED COST + VARIABLE COST

TOTAL COST=33,085,622+6,100,000 = $40,185,622

32
BGSCL PAYMENT METHOD:

METHOD PAYMENT GOODS OUR RISK RISK TO

AVAILABLE IMPORTER
TO BUYER

CASH ON CREDIT BEFORE AFTER NONE OUR

SHIPPMENT PAYMENT RESPONSIBILIT
Y

LETTER OF When goods AFTER LITTLE OUR

CREDIT shipped and PAYMENT RESPOSIBILITY
documents
comply

SIGHT On AFTER BUYER CAN MODERATE

DRAFT,DOCUMEN Presentation PAYMENT REFUSE
T AGAINST of draft GOODS
PAYMENT

TIME On maturity BEFORE RELIES ON MODERATE

DRAFT,DOCUMEN of draft PAYMENT BUYER TO
T PAY
DRAFTS

OPEN ACCOUNT As agreed Before Relies on None

Payment Buyer

PLACE : WHERE TO SELL ?

Several marketing channels are in operation to carry out the business. The
existence of level of marketing channel depends on the population and living
standards of people. But more emphasises is on our target market on the basis
of end use of product.

 Production unit 1: The Bolivarian republic of Venezuela

 EXPORT TO - BOLIVIA ,CHILE,EUCADOR

 Production unit 2: THE United of Mexican States

 EXPORT To- CANADA and UNITED STATES OF AMERICA

33
TRANSPORTATION OF BIODIESEL
Inter-Regional Transportation Issues

Although most logistical issues should be overcome with proper planning, there
are concerns regarding capital costs for expanding the current infrastructure,
congestion, spatial constraints at terminal facilities, and availability of
equipment.

We will initially transport Biodiesel to Latin and NAFTA countries.

34
Promotional strategies

The promotional strategies have been divided on the basis of operations and
consumption pattern. The marketing tools will be employed to enhance the
perception and usage of the alternative fuel. Following steps would be done:

For industrial Sales (Bulk sales):

 Large scale industrial contact campaign will be launched. This would be

done through company’s associates. This will also help in enhancing the
awareness level of users.

 Company will use slogan of “CHANGE IS GOOD” for its industrial buyers.

 Initially a massive participation would be done in industrial trade fair.

 Being an alternative fuel, government subsidy and mass scale promotion

with change in policies will benefit us. Government will support our
technological advancement as we are providing environmental and
economic impact at much lesser cost.

 Our cost effectiveness will allow units to considerably reduce their power
bills.

 The company will get in technical collaboration with BOSCH to provide bio
diesel conversion kits.

 Industrial units will be provided technology up gradation to convert their

conventional power genset into Bio diesel run generators. This will be
done at minimum cost to provide minimum installation cost.

 A minimal amount of multimedia advertising would be done to create

publicity.

 As initial offer, company can offer free installation for complete

installation. Plus, all the consumers would be provided lifetime back up
service provision.

 Bulk discount on major bulk sales would be given.

35
For mass Retailing:

 As per the market base, company will initially aim at the target market
for creation of mass consumption pattern. Awareness will be given
preference than sales. This will be done keeping in mind that our product
is here to stay for long term.

 State transport corporations will be fitted with minimal of cost bio diesel
conversion kits. Once the public transport goes green, even common
people will start considering the bio diesel as serious alternative to petrol/
diesel.

 The benefits to be derived from bio green fuel will be propagated through
multi-modal advertising. This will range from print media, audio-visuals to
internet.

 Special dedicated BlogSpot and social networking sites will be used. This
is different because younger generation have tendency and potential to
understand the environmental impact of bio-diesel.

 For the domestic purposes, a good amount of bio diesel conversion kit
display will be done. A high level of participation in technology
advancement will be propagated.

 All automobile related events, from rally car racing to drag car racing will
considered to start using bio diesel.

 Personal boats, yachts, miniature aircrafts, automobiles to be fitted with

bio diesel conversion kits. The concept of Cult branding to be introduced
to create a long lasting relation with the bio diesel user.

 Engineering colleges will assigned to work on certain project; this will

create curiosity among young engineers to adapt to bio diesel run
application. After the considered designs a small power generator will
launched in the market. This is best bet of company as many people
especially in country sides will go for it.

 Slowly and steadily conversion kits will be made available along with new
products ranging from bio diesel run LAWN MOVERs, fuelled motor axe,
36
  In the second phase, the company will go for collaboration in certified
conversion kits to bio diesel for passenger vehicles. The main objective
will be of to get in strategic alliance with automobile manufacturer of 4
wheelers and build a bio diesel compatible engine.

 In the third stage, two wheeler manufacturers would be alliance with to

produce bio-fuel run 2 wheelers.

 Fuel junctions will be placed to provide at petro/ Gas stations for bio
diesel. This will be done in accordance of strategic alliance with fuel
retailing giants. It will provide mass retailing for consumer to get
optimum demand supply continuum and cost minimizing for company.

The main objective of promotional strategies would be to replace petrol and

diesel everywhere.

PROMOTIONAL MIX OF BGSCL AND BIO-DIESEL

OUR MESSAGE; “GO GREEN”

BGSCL's total marketing communications programme is called the "promotional
mix" and consists of a blend of advertising, personal selling, sales promotion and
public relations tools. The four key elements of the promotional mix in more
detail.

It is helpful to define the four main elements of the promotional mix before
considering their strengths and limitations.

(1) Advertising
Any paid form of non-personal communication of ideas or products in the "prime
media": i.e. television, newspapers, magazines, billboard posters, radio, cinema
etc. Advertising is intended to persuade and to inform.

The two basic aspects of advertising are

 The message (what you want your communication to say)

 The medium (how you get your message across)

37
NAFTA REGION

NE
(2) Personal Selling
Oral communication with potential buyers of a product with the intention of
making a sale. The personal selling may focus initially on developing a
relationship with the potential buyer, but will always ultimately end with an
attempt to "close the sale".

Personal Selling is an important aspect of our Promotional strategy because bio-

diesel is a product that requires Product consideration and there are limited
buyers at international level.

Though we are targeting various segments of the market we would like to target
industrial consumers in future.

38
Two markets or regions that we are targeting will require technical compatibility
as these are one of the most developed nations.

Our Unique Characterstic is : Our green Products .This is the message that we will
send across.

(3) Sales Promotion

Providing incentives to customers or to the distribution channel to stimulate
demand for a product.

Sales promotions can be directed at either the customer, sales staff,

or distribution channel members (such as retailers). Sales
promotions targeted at the consumer are called consumer sales
promotions. Sales promotions targeted at retailers and wholesale
are called trade sales promotions. Some sale promotions,
particularly ones with unusual methods, are considered gimmick by
many.

Our sales promotion Techniques :

• Contests
We will have contesets for our sales team who opeartes in our
Trade regiona and enhance our Sales or Trade relations.This
would motivate them to work for organisation much harder.

• Rebates
Those who perform well ,we will give them certain relaxation
on the price at which w had earlier offered them the product.

This would increase their Profit Margin.

• Free travel, such as free flights

It is nothing more than a Thanks From our side to people who
have worked for the welfare of the organisation and our Planet
39
 Earth.They are the people who have aligned to our
organisation goals and have helped us in attainment of such
goals.

(4) Publicity
The communication of a product, brand or business by placing information about
it in the media without paying for the time or media space directly. otherwise
known as "public relations" or PR.

SHIRTS THAT WE WILL USED TO PROMOTE OUR IDEAS

KEY CHAIN FOR PROMOTIONS

OTHER STRATEGIES
 SPONSORING EVENTS

 GENERATING AWARENESS ABOUT GLOBAL WARMING

 GREEN-FUELS :FUTURE OF WORLD

 GREEN PRODUCTS AND INFRASTRUCTURE

DEVELOPMENT

40
  “Think Green,Live Green,Go Green”

 “Everyday Is Earth Day”

Advantages and Disadvantages of Each Element of the Promotional Mix

Mix Element Advantages Disadvantages

Advertising Good for building awareness Impersonal - cannot answer all a
customer's questions
Effective at reaching a wide audience
Not good at getting customers to
Repetition of main brand and product make a final purchasing decision
positioning helps build customer trust
Personal Highly interactive - lots of Costly - employing a sales force
Selling communication between the buyer and has many hidden costs in addition
seller to wages

Excellent for communicating complex / Not suitable if there are thousands

detailed product information and of important buyers
features

Relationships can be built up -

important if closing the sale make take
a long time
Sales Can stimulate quick increases in sales If used over the long-term,
Promotion by targeting promotional incentives on customers may get used to the
particular products effect

Good short term tactical tool Too much promotion may damage
the brand image
Public Often seen as more "credible" - since Risk of losing control - cannot
Relations the message seems to be coming from a always control what other people
third party (e.g. magazine, newspaper) write or say about your product

Cheap way of reaching many

customers - if the publicity is achieved
through the right media

41
Future Promotional Strategy of BGSCL

1. STUDYING CRITICAL INPUTS

BIODIESEL as one of the inputs will continue to play a dominant role in the
Alternative fuel consumption. The potential for increasing Biodiesel use exists
in the international market which need to be exploited by strengthening
promotional programmes.

WE have to emphasise on reducing cost of biodiesel .Blending Bio-diesel with

Vegetable oil would also be environmentally feasible. The programmes will
have linkages with the sales of Biodiesel particularly in areas with low
alternative fuel consumption which need further efforts of market development.

2. SPECIFIC SITE DEVELOPMENT

Area development approach with site specific Biodiesel Consumption

programmes like watershed management, well water recharging, increasing
water use efficiency, development of dry farming areas, crop diversification,
soil reclamation etc. will receive greater attention.

This would be done to produce Vegetable oil efficiently. Jatropha, a plant that is
primarily used in feedstock and Bio-diesel production would help us in
attainment of our future goals.

3. COLLABORATIVE EFFORT

As the large number of agencies is now related to Biofuel consumption which

indirectly contribute to Biodiesel promotion it is becoming imperative to
implement collaborative programmes to bring in qualitative improvement and
new innovations in the existing programmes.

4. ENHANCING TECHNOLOGY USAGE

Promotional programmes also need backing of services like ASTM techniques in

Production of Biodiesel, Purification of Bio-diesel and managing Supply
chain,soil testing, input application, information access etc. The Bio-diesel sale
points will be required to function as service centres. BGSCL is marketing
fertiliser through various channel.

42
 5. SEGMENT-BASED APPROACH

BGSL and Biodiesel cater to various segments of society. So ,we will emphasise
on Production and marketing of Bio-diesel as per segment demand. Segment
refers to Breaking or separating consumers on the basis of the usage of
product.

Various segments that we cater are:-

 ELECTRIC GENERATION

 MINING

 FISHERIES

 PASSENGER VEHICLE

 FARMING

Hence, our marketing plan would depend on the needs of various segment of
the market.

EXAMPLE:-

 If Passenger Vehicle require Bio-diesel we will Produce more of B-20

than other variants.

 For electric generation we would produce more of B-75 so that we

can meet up with the demand of electricity generation.

We will emphasise on a Segment-Based approach in coming future, and will try

achieving optimum demand and service continuum. We would try and attain
equilibrium and avoid Over-Production and under-production.

43
NEW PRODUCT DEVELOPMENT

LAUNCH OF BIO-DIESEL
GENERATORS

44
NEW Product Development
Process-

1) IDEA GENERATION

The biodiesel powered generator facility can produce and sell

electricity into the Power Grid. The power plant will run entirely on
biodiesel, a renewable carbon neutral fuel produced from vegetable
oil and animal fat.

There will be a biodiesel-fueled electric generator-5 Megawatt

Generator. That will be powered by biodiesel locally produced by
Safe-Fuels.

The station-wagon sized generators are expected to produce

enough power to supply 1,500 homes on constant basis. The idea is
45
to provide electric city supply in south asian countries as to comer
over blackouts.

Ideas for new products can be obtained from basic research using a
SWOT analysis Market and consumer trends, company's R&D
department, competitors, focus groups, employees, salespeople,
corporate spies, trade shows, may also be used to get an insight
into new product lines or product features.

2) Idea Screening

Our plant will be emerging as one of the leading biodiesel producers

and marketers in South America. It supplies biodiesel fuel that
meets current power generation. The biodiesel generator produces
90% less smoke, making it nearly emission free and will not reduce
air quality. It burns cleaner than petroleum diesel, emits less
cancer-causing carbon monoxide, and zero sulfur dioxide which
contributes to acid rain.

Power output from biodiesel is equivalent to petroleum diesel, and

with a few additives, emissions are reduced. Today's diesel engines
are fully capable of running on Biodiesel without any modifications;
they can run on petroleum diesel one day and biodiesel the next.

The target market for these generators will be those who have this
problems-

 Are you tired of outrageous gas and electric utility bills?

46
  Does your power go out often?

 Are you looking to install a backup emergency power system?

 Many people are facing these problems in today`s life, so our

electric biofuel generator will provide them electricity at low
cost and will give them backup of their electricity.

The object is to eliminate unsound concepts

prior to devoting resources to them.
The screeners must ask at least three
questions:
 Will the customer in the target market benefit from the
product?

 What is the size and growth forecasts of the market

segment/target market?

 What is the current or expected competitive pressure for the

product idea?

 What are the industry sales and market trends the product
idea is based on?

 Is it technically feasible to manufacture the product?

 Will the product be profitable when manufactured and

delivered to the customer at the target price?

47
3) Concept Development and Testing

 The electric generators running on biofuel will be developed using latest

technology. The market will be developing countries where there are electricity
problems and people are facing problems with their high electricity bills.
 The future of diesel generators has a good outlook due to technological
advances in making diesel fuel less pollutant and our increased research in
biodiesel. Biodiesel is a new fuel that uses natural oils from products like
soybean oil combined with a catalyst to create a fuel that can be burned for
energy.
 Biodiesel runs great in diesel engines and has many advantages like longer
engine life and cleaner burning. A diesel generator currently has many
advantages but one that can run biodiesel as well will increase its value tenfold.
With more and more research being done on biodiesel; the fuel can become
very accessible and cheap for electric generators. Generators will be
environment friendly.
 Customers will find them best they will be cheap. The generators will produced
and will be fitted into electric grid of the target country and it will be cost
effectively as we will be providing biodiesel, produced in our plant only.
 The concept really sounds good to the people as These are small steps towards
a larger goal towards creating fewer emissions. Some people believe in global
warming, some people don't. What we are doing is for cleaner air. The
generators are scheduled to be added to the Electric Grid and afterwards,
should the grid go down, all of the homes on the grid would continue to have
power until repairs were completed.
 The project is being funded by a $3.5 Million dollar investment.

Develop the marketing and engineering details

48
  Who is the target market and who is the decision maker in the
purchasing process?

 What product features must the product incorporate?

 What benefits will the product provide?

 How will consumers react to the product?

 How will the product be produced most cost effectively?

 Prove feasibility through virtual computer aided rendering, and

rapid prototyping

 What will it cost to produce it?

 Test the concept by asking a sample of prospective customers

what they think of the idea. Usually via Choice Modelling.

4) Business Analysis
Mexico encourages biodiesel production. It will cost us
cheaper to produce biodiesel. Mexico, with its serious air
pollution, slow progress towards minimizing the sulfur content in its
diesel fuel, and burgeoning fleet of cars, is in dire need of some
clean fuels.

Mexican President Felipe Calderon recently announced a $85 million

pilot project to produce biodiesel from non-food crops like jatropha
and castor oil plant. There will be a huge market guaranteed in
Mexico as well as due to requirement for environment friendly fuel.
Our Biodiesel generators are fueled by clean, renewable resources
that are more environmental friendly.

 Estimate likely selling price based upon competition and

customer feedback

 Estimate sales volume based upon size of market and such

tools as the Fourt-Woodlock equation

49
  Estimate profitability and breakeven point

5) Beta Testing and Market Testing

STAGES
 Produce a physical prototype or mock-up

 Test the product (and its packaging) in typical usage situations

 Conduct focus group customer interviews or introduce at trade

show

 Make adjustments where necessary

 Produce an initial run of the product and sell it in a test market

area to determine customer acceptance

 The demonstration run of the generators, held in Mexico,

clearly showed few signs of the telltale smoke associated with
diesel fuel. The operation of the generators was part of the
weekly scheduled test to ensure readiness in the case of a
blackout.

6) Technical Implementation

50
These are certain points that we will take into consideration while
developing our Biodiesel Generator.

 New program initiation

 Resource estimation

 Requirement publication

 Engineering operations planning

 Department scheduling

 Supplier collaboration

 Logistics plan

 Resource plan publication

 Program review and monitoring

7) Commercialization

 Launch the product

The Product will be launched in the financial year 2011-

2012.We will first wait for success of Biodiesel and then initiate
our launch of generators.

 Produce and place advertisements and other

promotions

This would depend on the market situations and market variables

post-two financial years.

51
52
 FEASIBILITY STUDY
FOR BIO-DIESEL

FEASIBILITY
53
FINANCIAL

In the First Financial Year we are incurring a cost of $ 40,185,622.In the next Financial
year it will drop by $ 34 mn.Because of the Fixed Cost of Plant.

Average annual cost would increase by 20 % as well

Our Production Capacity in the first year itself is 1.27 million gallon or 4.8006 million
litres.

Price of Our Bio-Diesel is $ 2.68/gallon.

In Second Financial Year Our Productivity will be 8.5 million gallon

In Third Financial Year Our Productivity will be 12.5 million gallon

In Fourth Financial Year Our Productivity will be 15 million gallon

In Fifth Financial Year Our Productivity will be 18 million gallon

From here ,Our productivity will increase by 20 % annually.

BREAK EVEN ALALYSIS

YEAR CASH FLOW

0 -40,185622

1 -4,000,000

2 +1,264,000

3 +5,583,000

4 +6,700,000

5 +8,040,000

6 +9,646,000

7 +10,988,000

8 +13,042,666

9 +16,080,000

BREAK EVEN CALCULATIOn

54
EXAMPLE :-

In 4 year we are Producing 15 million gallons.

AVERAGE ANNUAL COST 6 million.

Hence cost/gallon = =2.5gallon

Profit = 15*2.68-2.5 =6,700,000

We are BREAKING EVEN after 7 years

Till Seven Years we have Cash flow as

(-40,185,622, -4,00,000, +1,264,000, +5,583,000, +6,700,000, +8,040,000 ,

+9646,000, +10,988000)

=-$1,964,622

In the Eigth Year We have Sales of $ 55,263,666

Per Month It is $4,605,305

Per Day It is $153,510:::Hence Break even will take Place in Seventh day Of
first Month.

HENCE : BREAK EVEN is in 7 years ,I month,7 days.

RATE OF RETURN

COST OF PROJECT = 44,185,622

AMOUNT AFTER EIGHT YEARS =55,263,666

AMOUNT=PRINCIPAL(I+r)(1+r)(1+r)…..8times/100

55,263,666=44,185,622(1+r)..8times/100

The Rate Of return comes out to be .192 or 19.2 %

The project stands true to is core objective of providing a world class solution in
terms of organic fuel.

55
This characteristic of the fuel enables it to be produced in almost every location
of the world. The feasibility of the bio-diesel is set to be defined on three
different parameters. These are:

1. Product feasibility: This refers to the functional dependency of the

product where factors considering the product failure and success are
evaluated. Different aspects for Resource-saving or contamination-
control, Organic materials, Cleaner manufacturing processes are
considered. This is done to foresee the sustainability and usage of the
output and product in commercially viable market.

2. Commercial viability: In the intense competition of world trade, only

those survive who have adapted their products and strategies as per the
world trade order. It is very eminent to understand the fact that only
innovation of product, marketing strategies and political relations drive
these growths. A product has to be commercially successful because of
its characteristics and differentiated features. The product here sought
will be available in market in different stages. Starting with urgent
requirement of providing alternative source of power to the industries.
This will further move on to the mass production by making biodiesel run
power generators available for masses. This phase is sought to be most
viable for the economies which are fast becoming a developing nations.
Our product will help them reduce their input costs to a considerable
cost.

BIODIESEL stands true to its nature as an alternative source of power to the

petroleum. Many nations have taken the biodiesel prospects as major
contributor to their power generation capacity. The process employed for the
production of the biodiesel makes it feasible for production. The success rate
entirely depends on the usages sought of the product. The core objective is
aimed at providing industrial units a breather. This will enable them save
millions spend on petroleum fuel which is fast becoming a luxury.

3. Export competitiveness: The aspect of favourism has always and will

be a strategic tool for the success of products in markets abroad. The
export competitiveness entirely depends on two aspects. First is the
commercially viable product which meets the importing company needs

56
 and secondly the trade relations between the two nations. The exporter
should have the competitive advantage over and above its competitors in
order to curb the competition. As per the market scenario there are no
major exports taking place in terms of biodiesel, it gives us immense
opportunities to gain over other nations in terms of foreign exchange.

4. Economic impact on Exporters and Importer: The importing nation

will always give importance to those countries which provides cost
benefits. With our product, all the duties and plus the cost involved have
been minimized to provide cost effectiveness to the importing nation. The
refineries have been set up at such a location which allows us to drive
cost effectiveness with speedy documentations. The importing institution
has to only make payment and rest is assured from our side. Importer
should not be made to pay for the freight and other charges. It is the duty
of the exporters to identify and minimize the cost involved from the
procurement to packaging and freight, insurance and other duties.

All these features allow us provide cost effective operations with time
saving. Above every thing the product offered makes every thing look small.

5. Environmental impact: This is the most important aspect of

petrochemical business. Biodiesel needs are rising day by day.
Simultaneously the production of petroleum products is drying up. It is
expected that with the current consumption of petroleum products world
wide, there will be immense shortage of petroleum. In order to sustain
that time we have to act now. This is possible by switching on to
alternative fuel as soon as possible. Biodiesel is one of the most sought
after alternative.

The production of biodiesel would be done through process which is highly

efficient in energy conservation and does not result in any kind of waste. The
residue left after the process is further utilized into different relevant process.

There are no harmful emissions into the environment. In fact there are large
amount of carbon credits being made. This allows cleaner response to the
energy efficiency where alternative fuel is produced without any environmental
hazards. The production is carried out of jatropha and castor oil. These are non
food crops hence there is no load on general plantation of these plants.

57
 6. Demand and supply continuum: The specific target market heads the
demand and supply continuum. The service delivery platform will enable
the large evasion of any kind of gap arising between the expected
demand and supply of output. The target markets have immense
potential for the biodiesel; this enables the green solution provision for
the alternative fuel. NAFTA region has different consumption pattern than
the production nation. Northern states are fully developed; this means a
great amount of awareness is possible without making any special
efforts. The gestation period of biodiesel will be reduced through the
efficient delivery platform or retailing pattern.

In order to reach the optimum level, all the factors have to be implied. This will
be possible through adjusting the demand pattern and supply quotient.

Our product will shift the focus from petroleum to biodiesel keeping in mind
that long term benefits have to be derived. All kind of industrial units will adopt
our power generation strategy and domestic buyers will move to passenger
cars for getting highly fuel efficient engine.

7. Legal impact on Biodiesel: World wide need for alternative fuel has
enabled the governments to understand the effect. The cartels of
petroleum producing nations have controlled the supply of fuel. This in
return has created pressure on smaller nation to adapt to the alternative
fuel. In response to this governments have collectively and individually
formed various bodies to allow cropping up of biodiesel production.
Importing as well as the exporting can avail the benefits in the form of
tax exemption and duties evasions.

This has further made WTO to frame a body on alternative fuel production. It
aims at research and development for cleaner fuel producing process and units.
International Biodiesel board has been framed look after every trade aspect of
this golden fuel.

Free trade agreements between the countries are also giving importance to
this alternative source of power. Biodiesel is fast seeking benefits from many
countries. It is because of this that many international players are coming up to
tap this opportunity which stands for more than trillion dollar business world
wide.

58
Bio Diesel in India is virtually a non-
starter.

There are many reasons for that. The Main Reasons

are non-availability of vegetable oil and
government's policies.

1. Non Availability of Oil

o In India Edible oils are in short supply, and country has to import up
to 40% of its requirements (It is now partly offset by Bumper Crop
of Soy). Hence prices of edible oils are higher than that of
Petroleum Diesel. Due to this, these are not viable and use of non-
edible oils was suggested for Bio Diesel manufacture.

o Even though the consumption of Edible oils in India is high, the

availability of used cooking oil is very small as it is used till the end.

o Indian Culture uses vegetable oil lamps for lighting in homes and in
temples (like candles in other cultures). When prices of edible oil
shot up, some people turned to a bit cheaper non-edible oils. The
requirement of this sector is more than 15 million tons (Bio
Kerosene). Since seeds can be collected and crushed in a small
scale in far flung villages, the use of non-edible oils for lamps is
picking up very fast. This is the best way of use for millions of Rural
Indians. This is depriving Bio Diesel industry its supply of oil.

o All over the world Edible oils are used for manufacture of Biodiesel.
These are Rape seed in Europe, Soy in Americas and Palm in South
East Asia. Rape seed and soy are used for its de oiled meal as
cattle feed and oil is not that important. Hence these were in
excess, and had to be disposed off at lower prices. Hence initially it
was a viable raw material for Biodiesel manufacture and a lot of
manufacturing units came up based on these oils. Now excess oil is
committed, and fresh sources need to be developed.

59
o Collection of non-edible oil seeds is a manual operation, and for
large Biodiesel plant it is a logistical nightmare. In a day, a person
can collect up to 80 kilograms of seeds, which can produce 20 to 23
litres of oil. The collection is done for 3 months, once or twice a
year. For a 100 tons per day (8 million gallons per year) plant, you
need 15,000 people to collect it. Collecting and organizing such a
large manpower is a challenge.

o The price of Seeds of Jatropha is currently very high because most

of it is used for plantation purposes. At this price, the
manufacturing cost of Biodiesel is 3 times the pump price of
Petroleum Diesel.

o Most of the edible oils used currently are Stable (do not get rancid).
These do not decompose much on storage. Hence these are
preferred for Trans-Etherification Process. Non-Edible oils are not
that stable, and need a lot of pre-treatment adding to the cost of
manufacture of Biodiesel. If these are used as lamp oil, even oils
with 50% free fatty acids can be used.

o The use of lamp oil is increasing rapidly in India, as there is no

electrical power supply for 10 to 14 hours a day in rural areas. Soon
people will face shortage of these oils for lighting purposes.

o Cottage soap industry can use vegetable oils with high free fatty
acid contents. Since prices of edible oils have doubled, many soap
manufacturers in unorganized sector are using these oils as these
are a bit cheaper.

o There are billions of other trees (Karanj, Mahua, Neem), all over
India, with oil bearing seeds. Traditionally Karanj (Pongamia
Pinatta) is planted along the highways. Petrol Pump owners along
the highways, should be encouraged to collect the Karanj seeds.
Neem (Azadirachta Indica) is planted everywhere for purification of
air. Mahua (Madhuca Indica) and Sal ( Shorea robusta) grows wildly
in Forests. Collection and processing mechanism for these seeds is
not yet developed. Hence a most of these seeds lie on the ground
(and ultimately get converted into Bio Fertilizer).

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 2. Government's Policies

Government of India started Bio Fuel mission in 2003, but it announced Bio Fuel
Policy on 11th September 2008. The Union Cabinet in its meeting gave its
approval for the National Policy on Biofuel prepared by the Ministry of New and
Renewable Energy, and also approved for setting up of an empowered National
Biofuel Coordination Committee, headed by Prime Minister of India and a
Biofuel Steering Committee headed by Cabinet Secretary.
Ministry of New and Renewable Energy has been given the responsibility for the
National Policy on Biofuels and overall co-ordination by Prime Minister under
the Allocation of Business Rules. A proposal on “National Policy on Biofuels & its
Implementation” was prepared after wide scale consultations and inter-
Ministerial deliberations. The draft Policy was considered by a Group of
Ministers (GoM) under the Chairmanship of Shri Sharad Pawar, Union Minister of
Agriculture, Food & Public Distribution. After considering the suggestions of
Planning Commission and other Members, the Group of Ministers recommended
the National Biofuel Policy to the Cabinet.

Salient features of the National Biofuel Policy are as under:

 An indicative target of 20% by 2017 for the blending of biofuels – bio

ethanol and bio-diesel has been proposed.

 Bio-diesel production will be taken up from non-edible oil seeds in waste /

degraded / marginal lands.

 The focus would be on indigenous production of bio-diesel feedstock and

import of Free Fatty Acid (FFA) based such as oil, palm etc. would not be
permitted.

 Bio-diesel plantations on community / Government / forest waste lands

would be encouraged while plantation in fertile irrigated lands would not
be encouraged.

 Minimum Support Price (MSP) with the provision of periodic revision for
bio-diesel oil seeds would be announced to provide fair price to the
growers. The details about the MSP mechanism, enshrined in the National

61
 Biofuel Policy, would be worked out carefully subsequently and
considered by the Bio-fuel Steering Committee.

 Minimum Purchase Price (MPP) for the purchase of bio-ethanol by the Oil
Marketing Companies (OMCs) would be based on the actual cost of
production and import price of bio-ethanol. In case of biodiesel, the MPP
should be linked to the prevailing retail diesel price.

 The National Biofuel Policy envisages that bio-fuels, namely, biodiesel

and bio-ethanol may be brought under the ambit of “Declared Goods” by
the Government to ensure unrestricted movement of biofuels within and
outside the States. It is also stated in the Policy that no taxes and duties
should be levied on bio-diesel.

 Oil companies have declared their own Bio Diesel Purchase Policy. These
companies offer a price of Rs. 26.50 per litre of Bio Diesel, which is less
than half the current manufacturing cost of Bio Diesel.

 Large patches of land are required for plantation of Jatropha. Government

holds large tracts of land as Forest Lands and Revenue lands. In some
states, like Chattisgarh, these are leased to State owned Oil Company like
IOC.

 UP Jatropha mission of Uttar Pradesh is a Joint venture of BPCL, Nandan

Biomatrics and Shapoorji Pallonji and is supported by UP Government.
Presently, they are going to tie-up with every Panchayat (Local Body) of
selecetd Districs to plant Jatropha on Panchayat lands. Jatropha seeds will
be bought back by BPCL in long run. Operation of this mission may be
very slow due to Government's and Panchayat's involvement and
because it is implemented through National Rural Employment Guarantee
Scheme. IOC is also planning to enter in UP as well as some others.
Individual farmers are ready to plant Jatropha in their useless and waste
lands and want buy-back agreement like contract farming with good price
(But price offered is generally very low). Bundelkhand has lots of waste
land (600,000 - 700,000 hectares) which are best suited for Jatropha and
on the other hand Districts of Eastern UP have saline and waste lands
which are also suitable for plantation.

62
Corporate Strategy Suggested for Big Indian
Companies

Many Big Companies have their grass root plants in rural areas. They have a
big fleet of Vehicles, and they consume large quantities of Diesel Oil for their
Diesel Engine Vehicles and Diesel (Electric) Generating Sets. These companies
also have many activities for Rural Development. They can combine Rural
Development Activity to get Oil (and Biodiesel) for their captive use.

Here is a suggestion.

1. They should Start buying seeds of Karanj, Mahua, Sal and Neem from
local people around their unit and from Adivasis staying in Forests. Local
NGOs and Self Help Groups should be encouraged for the same. Since
seeds of these plants are not used much for plantation, the prices of
these seeds are reasonable. If these seeds are bought at factory gate for
Rs. 10 per kilogram, oil extracted from it can cost Rs. 30 per liter
(considering sale price of seed cake).

2. This will develop a supply chain. This then can be expanded to district
level and then to state level.

3. The seed cake is more valuable than oil. BioGas can be produced from it,
and it can be used as fuel in factory. Almost 50% of the weight of seed
cake is converted into Biogas, which is a clean fuel.

4. The fermented seed cake can be sold to local people for conversion into
Bio Fertilizer. Bio Fertilizers will be most sought after soil nutrients in
future.

5. There are many BioDiesel producers in the country, which are facing
shortage of raw material. These can convert the Company's oil into
63
 BioDiesel, and give BioDiesel back to the company, on contract basis.
Conversion cost for a small scale BioDiesel plant is around Rs. 7 per litre.
Hence it will be cheaper than Petroleum Diesel.

6. Since it is used captivity by the company, it need not be sold at meagre

price to oil companies. This will start like a movement (similar to Milk
revolution by Amul and NDDB) and will spread rapidly.

7. It is a win-win situation for all.

8. If the company has to offer a price that is more than Rs. 10 per kilogram,
the extra expenses incurred will not exceed even 1% of the entire fuel bill
of the company

64