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Tableofcontent

1.Executivesummary

1.1.Missionandobjectives
Companydescription
3.ProductDescription
3.1KeyAdvantagesandPerformanceofBiodiesel
3.2.Sourcing
3.2.1.Usedcookingoil
3.2.2Jatropha
3.2.3.Rapeoil.
3.2.4.Palmoil
3.2.5.Soybeanoil
3.3.Biodieselproductioncosts
3.4.FutureProductsandServices
3.5.Technology
4.Marketanalysis
4.1.Marketforbiodieselin
4.2.Marketprices
4.3.Competitors
4.4.Salesandmarketingstrategy
5.Projectcompetitiveadvantages
5.1.Processadvantages
5.2.Productadvantages
5.3.Companyadvantages
6.Managementandpersonnel
6.1.Keymembersofmanagementteam
7.Salesforecast
8.FinancialPlanning
8.1.ProjectFinancing
8.2BreakevenAnalysis
8.3.ProjectedProfitandLossReport
8.4.Projectedcashflow
8.5.Sensitivityanalysis.
9.RiskManagement:
10.FuturePlans.
11.ExitStrategy

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1.Executivesummary

_______________________________ manufactures biodiesel, renewable fuel from vegetable oils, in

_________________________. Purpose of the business plan is to attract financing into creation of biodiesel
productionplant.
Weofferfuelwiththesameperformanceasthatofconventionaldiesel,atcompetitivepriceandecologicallysafe.
Ourmarketsexpandrapidlyallovertheworldduetogrowingecologicalconcernsandlimitedenergysupply.Our
targetcustomerslocatedin_____________________.
Our teams skills cover all aspects of creating and managing the biodiesel production project: organizing,
financing,auditing,marketing,promotingbusiness,solvingtechnicalandorganizationalproblems.
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Thecapacityoftheplantis________________gallonsperyear,thefullcapacityisintendedtobereachedbythe
endofthefifthoperationalyear.Bythattimeweplan_____________$turnover,producing
___________ $ net profit and positive cash flow of _________________ $. To reach these goals, we
need _______________________ $ investment to buy land, processing equipment, and finance
workingcapital.

1.1.Missionandobjectives.

Corecompetenceof____________________________isproductionofrenewableandenvironmentfriendlyfuel,
biodiesel.Weintendtosatisfyconstantlygrowingdemandforbiofuelsworldwideandtogeneratefairreturnfor
investorsandfinancingcontinuinggrowthanddevelopment.
Weplantostartproductionofbiodieselin________________________,toreachfullplantcapacityin1year
andtodoubleitattheyear3.

2.Companydescription

__________________________ is a startup focused on renewable energy production from agriculturebased

feedstock. The Company owning the production unit will be formed under ____________________ law as an
___________.

3.ProductDescription

ThecompanyisplanningtheproductionofBiodieselasaprimaryproductwithGlycerinasabyproduct.
Glycerinewillinitiallybesoldtothesoapandcosmeticsindustries.Subsequently,thecompanywillconsideran
approachwithmoreaddedvalue.

Biodieselisthenameforthemethanolesterbasedbiofuelmadefromvegetableoilsoranimalfats.Inthis
businessplanbiodieselwillbeproducedfrom___________________.

3.1.KeyAdvantagesandPerformanceofBiodiesel

Biodieselisaclearliquid,withoutunpleasantodororhandlingcharacteristics,ofvirtuallythesameviscosityas
mineralfossildieseloil.Forthisreason,itmaybeusedinastandarddieselenginewithoutadditionalmodifications.
Itmayalsobeblendedwithpetrodieseltoimprovequalityoflatter.Thereareevenexamplesofusagecrude
vegetableoil(notprocessedintobiodiesel)inspeciallydesigneddieselengines,orblended(50/50)withpetrodiesel
oilinordinarydieselengines.
1.Biodieselistheonlyalternativefuelthatrunsinanyconventional,unmodifieddieselengine.Itcanbestored
exactlylikepetroleumdiesel.Biodieselshowssimilarfuelconsumption,horsepower,torque,andhaulageratesas
conventionaldieselfuel.
2.Biodieselcanbeusedaloneormixedinanyratiowithpetroleumdiesel.Theuseofbiodieselcanextendthelife
ofdieselenginesbecauseitismorelubricatingthanpetroleumdieselfuel,whilefuelconsumption,autoignition,
poweroutput,andenginetorquearerelativelyunaffected.Lubricityresultsofbiodieselandpetroleumdieselusing
industrytestmethodsindicatethatthereisamarkedimprovementinlubricitywhenbiodieselisaddedto
conventionaldieselfuel.Evenbiodiesellevelsbelow1percentcanprovideuptoa30percentincreaseinlubricity.
3.Biodieselissafetohandleandtransportbecauseitisasbiodegradableassugar(purebiodieseldegrades85to
88%inwaterwithin28days),10timeslesstoxicthantablesalt(lethaldoseisgreaterthan17.4g/Kgbodyweight,
whileforsalt(NaCL)itis1.8g/Kg),andhasahighflashpointofabout200Ccomparedtopetroleumdieselfuel,
whichhasaflashpointof70C.
4.Combustionofbiodieselprovideovera7590%reductioninenvironmentalpollutionanda90%reductionin
cancerrisks.
5.Biodieselistheonlyalternativefueltomeetallenvironmentalandhumanhealthrequirementsforenergy
sources.
6.Biodieselistheonlybiofuel,whichreceivedapprovalfrommostcarmanufacturersitisaprovenfuelwith
over20yearsofuseinEuropeand30millionsuccessfulUSroadmiles.
7.Biodieselhasthehighestenergyyieldincomparisontootherfuels,includingconventionalone:ethanol,
distilledfromcellulose.
8.Biodieselisnontoxicandposeslittleornohealthrisktohumans.Vehiclesthatrunonbiodieselemitlesssulfur
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dioxide(SO2),particulatematter(soot),carbondioxide(CO2),withfewerheavyHydrocarbons(HC)and
PolycyclicAromaticHydrocarbons(PAH).Biodieseldoesnotcontainsulfursoitwillnotcontributetosulfur
dioxideemissionsthatresultinacidrain.Testshaveshownthatthecancercausingpotentialofparticulatematter
frompurebiodieselisabout94%lessthanthatofregulardiesel.

3.2.Sourcing

Oneofthemostimportantproblemsforbiodieselmanufacturersishighcostoffeedstock.Themajorsourceof
rawmaterialsforbiodieselproductioninEuropeisrape(canola)forUSandSouthAmericanmanufacturersitssoy
beanformanyothercountriesitsalsopalmoil.Duetoconstantlygrowingdemandforbiodiesel,vegetableoil
pricesontheworldmarketarefollowinganupwardtrend.Forthisreason,thecompanywillstartoperationswith
TheCompanyisalsoconsideringtheimportof.

3.2.1.Usedcookingoil

Heresdescriptionofyourlocaloroverseassupplier

3.2.2Jatropha

JatrophaisbelievedtooriginatefromMexicoandlaterbeenintroducedtoAfricaandAsia.Thishighlydrought
resistantspeciesisadaptedtoaridandsemiaridconditions.Ithasfewconditionswithrespecttoitsenvironment:it
cangrowinareasthatareunsuitableforotherplants,becauseofsoildepletion.Itsalaborintensiveplan,which,
however,requiresminimuminvestmentsaftermaturity(in2years)withregularandstableharvestsformin.50years
ThereasonisthatJatrophaisnotneededtobereplantedeveryseasonlikeotheroilcropswhichsaveslaborand
[1]
othercost.Jatrophayieldperhectareperyearisupto8.0tonsofseed,whichcontainover37%oil Jatropha
seedsdonotrequirespecialconditionsforstorageJatrophashellafterpressingmakesavaluablefertilizer.Jatropha
isanaturalpestandbugkillerrequiringnoadditionalpesticidesitispossibletointercropJatrophawithotherplants
toincreaseproductivityoflandortocreatealivingfencearound.

Manynationalgovernmentsareinterestedineffectiveuseofwastedlands,creationofstableincomeinlocal
communities,anddevelopingproductionofalternativefuels.Forexample,inIndiaalonethereareabout552,692.26
sqkmofwastelands,outofwhich62.87%amountingto347,490.15sqkmaresuitableforcultivationofJatropha.

Summary:BenefitsofJatropha

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Itisaperennialcrop,i.e.atree,andthusrequiresfarlessfertilizerandchemicalsthanannualsandqualifies

forCERs
Itcanprovideadditionalincometoruralcommunitiesinthetropics
Itcanbeusedasasupportforclimbingplantssuchasvanilla,etc.,whichaugmentingitsincomepotential

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3.2.3.Rapeoil.

Rapeseedoilnowmakesupbetween80%85%oftheEUbiodiesel.PricesforRapehavebeenfallingforthelast
2years,becauseofrecordharvests,seethegraphbelow.Butitisunlikelythattheserecordswouldberepeated,and
increaseofdemandworldwidewillkeeppriceshigher.WeexpectaveragemarketpriceforRapein2006$250per
tone,andaveragepriceforRapeoil$670pertone,dependingonseason(fallpricesareusuallylowerthanspring
ones.

3.2.4.Palmoil.

TheworldlargestsuppliersofPalmoilareMalaysia,whichproduces45%oftheworldssupplyandIndonesia
[2]
(39%)Thesecountrieswouldsupplyupto20%oftheEuropeanUnionsbiodieselneedsby2010.
ThestronggrowthinPalmoilconsumptionoverthelastsixyearshasresultedinPalmoilbeingthedominantoil
intheglobalmarket.AsSoybeanoilpricesbegantorisein200102,thespreadbetweenPalmoilandSoybeanoil
begantowiden,increasingthecompetitivenessofPalmoilintheworldmarket.Since200102,Palmoil
consumptionhasincreased13.2millionmetrictone,comparedtoan8.7MMTincreaseinSoybeanoilconsumption.
Thislowerprice,comparedtoothermajoroils,primarilySoybeanoil,hasgivenPalmoilacompetitiveadvantagein
boththeselargeoilconsumingcountries.TherisingtrendisattributedalsotomakingTransFattyAcid(TFA)label
effectiveintheUnitedStatesinJanuary,2006.TheassociationofPalmoilcompanies(Gapki)predictedthepricesof
crudePalmoil(CPO)willhoveraroundUS$600pertonthisyearandwillnotdivelowerthanUS$550perton[3].

3.2.5.Soybeanoil.
Soybeanoilshipmentsareestimatedtoremainunchanged,thusaccountingforalowershareoftotaltradeofoil
[4]
[5]
seedsthanusual ,withcurrenttrendofgradualpriceincreaseforsoybeanoilfutures :
Date
Price,centsperlb.
March
30.22
May
30.59
July
31.1

Conclusion:weprovedintheplanthefollowingpurchasingpricesofrawmaterials:
Usedcookingoil
Jatrophaoil

3.3.Biodieselproductioncosts
Otherimportantcostsarecostsofrawmaterials,chemicalsandenergy:1tonofoilplus0.12tonofmethanolplus
0.01tonofKOH.PleaserefertoTable4forsummary.Energyrequirementswereestimatedunderassumptionthat
withtechnologicallyadvancedplantweneedapprox.20literofbiodieselasenergytoproduce1tonofbiodiesel.
ForothercostspleaseseeProfitandlossstatement.
Table4.Costspertoncalculation,USD.

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3.4.FutureProductsandServices

Glycerolisabyproductofourtechnologicalprocess,butitneedsfurthercleaning.Thecompanyislookinginto
theinstallationofglycerolprocessingequipment.Astheequipmentrequiresanadditionalinvestmentandthe
CompanywantstoremainfocusedontheproductionofqualityBiodieselasaflagshipproduct,thisinvestment
mightbeforgoneintheimmediatefuture.

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3.5.Technology

Theprocessofconvertingvegetableoilintobiodieselfueliscalledtransesterificationorneutralizingthefreefatty
acidsinoil,removingtheglycerol,andcreatinganalcoholester.Thisisaccomplishedbymixingmethanol(wood
alcohol)withlye(sodiumhydroxide)orpotassiumHydroxide,tomakesodium(orpotassium)methoxide.This
liquidisthenmixedintovegetableoil.Theentiremixturethensettles.Glycerolisleftonthebottomandmethyl
esters,orbiodiesel,isleftontop.Finally,themethylestersiswashed,filteredandrefined.

Schematically,itcanbedescribedasfollows(seealsoExhibit2Technologyprocess):

100kgofoil+15kgmethanol+1kgKOH(orNaOH)
=
100kgbiodiesel(methylesters)+10kg(impure)glycerol

Incaseyouusehydrodynamiccavitation
Tocarryoutthischemicalreaction,weuseinnovative2stagehydrodynamiccavitationtechnology,whichleadto
moreeffectivebiodieselproductionprocess.PleaserefertochapterProcessadvantagesformoredetailed
explanationofthiseffectiveness.
Chemicalreactioninthismanufacturingprocesscarriesoutonamolecularlevel.Allcomponentsinsideof
reactoraresubjectedtohighpressureimpulsesandadvancedcontrolledhydrodynamiccavitation.Whileprocessing
vegetableoilswithnecessarycomponentsinreactorthemoleculesoffattyacidsarebrokenapartwithmicro
explosionsitresultsinviscositydecrease,cetanenumberincrease,powerparametersofproducedfuelimproveand
reactiontakesshortertime(secondsversusonetotwohoursinconventionaltechnologies).
ThefinalstageofthereactionisperformedinthecavitationpumpHD.Intensivecavitationprocessesinthe
hydrodynamicmixerandthecavitationpumpleadtobreakdownoffattyacidmolecules,whichalsosignificantly
increasesreactionspeedandimprovesqualityofthefuel.

Fig.1.Biodieselfuelproductionsystem

Processdescription:
Vegetableoilfromthevessel1viameshfilterF1,flowheaterPPisfedtothehydrodynamicmixerGDwith
H1pump.
Oil flow is controlled with the flowmeter P1.A premixed solution of the catalyzer in methanol is fed from
vessel3tothevacuumchamberofthehydrodynamicmixerthroughtheBPregulatorvalveandtheflowmeterP2.
ThesolutionmixingisperformedbytheH2pump.Thesolutionistakenfromvessels3inturn.Thefirststageofthe
peretherificationreactionisperformedinthehydrodynamicmixer.
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ThefinalstageofthereactionisperformedinthecavitationpumpHK.Intensivecavitationprocessesinthe
hydrodynamic mixer and the cavitation pump lead to breakdown of fatty acid molecules, which significantly
increasesreactionspeedandimprovesqualityofthefuel.
Afterthecavitationpump,themixturegoestothesettlingcolumns4,whereitseparatesintobiodieseland
waterglycerinmixture.ThefuelisdischargedviaFmoistureseparatorfilterbythepumpH3.

4.Marketanalysis.

Worldconsumptionofbiofuelsnowadaysisunder10milliontonsannually,orapproximately2%oftotalfuel
consumption.

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everydieselpump.

4.1.Marketforbiodieselin__________.

4.2.Marketprices.

Currentpricedifferencebetweendieselandbiodieselisabout11eurocentsperliter:priceofdieselongasstation
is1.11Euro(1.44USD)perliterincl.petroleumtax,comparedwith1Euro(1.3USD)/literforbiodiesel.Wedo
notexpectsignificantpricechanges(seegraphsbelow)inthefutureandplansellingpriceinthisproject$852/ton.

Graph2.Biodieselpricestrends.(Source:UFOP)

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4.3.Competitors.

Hereareyourlocalcompetitors

4.4.Salesandmarketingstrategy.

TheCompanywilltargetoperatorsoffleetandtransportationcompanies.

Geographically,thecompanywillinitiallyconcentrate________.

Toinsurerapidgrowth,thecompanyplanstosellBiodieseldistributorsatasmalldiscountcomparedtoregular
diesel.Inthefirst3years,theCompany'soutputisexpectedtogrowinaccordancewiththegrowthoftheexport
market(around30%yearly).TheCompanyplanstostartproducingabout_________metrictonspermonthinthe
first_______monthsofoperation.Thisoutputwillbeincreasedby.

5.Projectcompetitiveadvantagesarebasedon:

processadvantages(seeabovefordetailedexplanationofutilizedtechnology)
productadvantages
companyadvantages.

5.1.Processadvantages.

Thereislatestinventioninbiodieselproduction.Butyoumaymentionyoursupplierasaleadingoneorsmthlike
that.Thereshouldbeadvantages,otherwiseprojectisuncompetitive.
Ourtechnologyemployshydrodynamiccavitation,anindustrialphenomenon,producedbypressurevariations
andobtainedusingthegeometryofthesystemcreatingvelocityvariation.Cavitationitselfperceivedasa
[9]
technologyoffuture useofcavitationinchemicalprocessesreducesreactiontime,increasesreactionyieldand
decreasesconsumptionofenergy.
The conventional techniques of biodiesel production typically utilize temperatures in the range of 70 to 200C,
pressures in the range of 6 to 10 atm and reaction times of up to 70 hours for achieving conversions in the range of
90 to 95%based on the type of raw material used (usually mixtures of fatty acids obtained as waste). Use of
[10]
hydrodynamic cavitation decreases reaction time and temperature to 70 min. and 30C respectively
. So, useof
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cavitationreactorforproductionofbiodieselallowssaveupto10timesonelectricity.

5.2.Productadvantages.

Inecologicallysensitivesegmentsandatequalpricing,Biodieselwillhaveacompetitiveadvantageagainstregular
Diesel.Advantages of our Biodiesel are based on its quality and costs.To illustrate product quality, we compare
major indicators of biodiesel manufactured with our technology (column Utilized technology) and industry
standards.Obviously,manufacturedproductmeetsthehighestindustrystandardsandcanbesuppliedatthelowest
possiblecosts.

TableParametersofmanufacturedbiodiesel.

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5.3.Companyadvantages.

Yourcompanyadvantages

6.Managementandpersonnel.

Thestartingprojectheadcountis___________employeeswithfutureincreaseto_____________,seetable
Personnelplan.Ourteammembersandtheirresumeslistedbelowallteammembershaverequiredexperience
andqualificationtostartandmanagetheproject.

6.1.Keymembersofmanagementteam:

resumes

7.Salesforecast

Weexpecttostartsalesat____________.Directcostofsalesincludescostsofpurchasedvegetableoils.Allother
costsindicatedinincomestatement.AllassumptionsbehindsalesforecastwereexplainedinchapterSalesand
marketingstrategy.

8.FinancialPlanningdoesnotmakesencetopresentstatementshere,pleaseusethisspreadsheettomake
relevantcalculations

Financialprojectionsarebasedonsalesforecast.Wedonotexpectchangesinbiodieselproductiontechnology
whichwouldmakeourproductuncompetitive,becausewearealreadyonleadingpositionofthistechnologyand
plandevelopingitinfuture.Offeredtechnologyisalsoprotectedbypatents.

8.1.ProjectFinancing

Summaryofstartuprequirementspresentedinthetablebelow.laboratoryunit132gal/hour)tobefinancedby
loan.

Table5.Startuprequirements,$

8.2BreakevenAnalysis

Table6.BreakevenAnalysis
AnnualBreakeven,
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plantstobesold
Assumptions:
AveragePerPlant
Revenue
AveragePerPlant
VariableCost

EstimatedAnnual
FixedCost

8.3.ProjectedProfitandLossReport

Table7.ProfitandLossReport

8.4.Projectedcashflow

Cashcollectionperiodisapprox.1quartersowedonotplanoutstandingbillsattheendofyear.

8.5.Sensitivityanalysis.

Inthisprojectweusedassumptionsprovenbymarketanalysisandresearch.However,wecreatedalso2scenarios
withdifferentassumptions.Summaryofallscenariosshowonthetablebelow.

9.RiskManagement:

Themajortypeofbusinessriskidentifiedbythecompanyisrelatedtothecontinuityandcostofrawmaterials.
Explaininyourrisks

10.FuturePlans.

Aspartofitsexpansionplan,thecompanywillbeinvolvedinR&Drelatedtothefield

11.ExitStrategy

TheCompany'sgoalisto____________
[1]
Fivetonsofjatrophaoilseedscanproducetwotonsofbiodiesel.
[2]
http://asia.news.yahoo.com/050505/3/20hjl.html
[3]
AsiainFocus:CrudepalmoilpricetohoveraroundUS$450perton
[4]
FinancialExpress:India,Chinatodriveglobalpalmoildemandhigher.15June2006

[5]

DowJonesCommoditiesService

[6]
http://www.greencarcongress.com
[7]
UFOP:http://www.ufop.de
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PleasereviewalsoUpdated(2008)biodieselfinancialplan

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