"corn banaayega crorepati" ppt

Team 3“Corn Banaayega Crorepati”

Agenda

Motivation

Opportunity

Proposal

Future expansion

Social Impact

Technology

SCM & Logistics

Financials

Location

Motivation

Rising fuel prices Greenhouse emission Pollution

Search for alternate fuel

Ethanol-blended gasoline

A High-octane liquid fuel

Blending ethanol with gasoline leads to lower emission levels

Gives 30 percent fewer miles per gallon than gasoline

Manufactured from Sugarcane, Corn, Wood, Vegetable wastes

E

T

H

A

N

O

L

History

United StatesMandate: In some states

“All cars built after 1980 will operate on E10”

BrazilMandate: 20-25%

“All cars to use ethanol blends”

CanadaMandate: At provincial level“All cars built after 1980 will

operate on E10”

Ethanol blended Gasoline also used in countries like Sweden, Thailand,

Canada, China and United Kingdom

IndiaE5 being pilot tested in seven

states since 2003A 5% Ethanol blending to be made mandatory from

end of 2006

Blending levels to be increased to 10% by end of 2007

Opportunity

Consumption of Petrol: 10,000 Million Liters

5% Ethanol, 5000 Lac Liters

Growth: 5.35%

7011

75707897

82518648

5000

6000

7000

8000

9000

2001-02 2002-03 2003-04 2004-05 2005-06

Petrol Consumption (Million Tonnes)

Unsatisfied demand3160 Lac Liters

Revenue Opportunity (@ Rs. 24/Liter)

Rs. 7580 Million

Proposal

Where?

How?

For?

From Corn Stover using Cellulostic Technology

Begusarai District

Barauni Refinery

Raw Material

Why?

Low procurement cost compared to Corn and Sugarcane

What? Part of plant (Stalk & Leaves) left behind after Corn is harvested

Not a consumption crop like Corn and Sugarcane

Can be grown in semi-arid regions with short harvest cycle

1

2

3

Technology

Sugar Cane

Corn

Corn Stover

Ethanol

Sucrose

Cellulose

Starch

Procurement (Rs./ Ton)

Enzyme Cost (Rs./Ton)

Ethanol Yield(Liter/Ton)

5000

1500

640

550

Negligible

Negligible 72

450

300

Total Cost(Rs./Liter)

9

11

7

Process Description

Ethanol

Steam & AcidCorn Stover

Distillation &

Purification

Saccharification&

Fermentation

Collection

Conditioning

S/L SeparationPre-Treatment

Technology will be procured from National Renewable Energy Laboratory (NREL) USA

Location

0

1000

2000

3000

4000

AP Bihar Karnataka Maharashtra Rajasthan UP

Selection Criteria

Corn Production-The higher the better-Year round production

Sugar Production-The lower the better

Refinery Capacity-The greater the better

Plant at Begusarai would serve the Barauni and Haldia plants withinstalled capacity: 10.6 MMT

0

20

40

60


0

20000

40000

60000


Supply Chain & Logistics

Factory

Warehouse

Mandi

Transport

RefinerySelling PriceRs. 17/Liter

Rs. 0.60/Liter

Rs. 4.95/Liter

Rs. 0.15/Liter

Rs. 5.67/Liter

+

Total CostRs. 12/Liter

MarkupRs. 5/Liter

Financials

0

50

100

150

200

250

300

2007 2008 2009 2010 2011

Revenues & Profits (Rs. Million)Revenue Profit Growth: 16%

Growth: 41%

Key

Par

amet

ers

Capex

Payback Period

NPV

ROE

Rs. 350 Million for a capacity of 60,000 Liters per day

4.5 Years

Rs. 26 Million over a 7 year horizon

Increases from 9% in the first year to 30% in the fifth year

Risks

FeedstockPrice impact on input cost

TechnologyEmerging technology might make existingfacilities inefficient

Government PolicyPolicy reversal on ethanol use

CompetitionExcess local capacity build-up near refineries

Supply Side Risk

Demand Side Risk

Mangalore

Haldia

Barauni

Vizag

Tatipaka

1

2

34

Geographical Expansion

Plant Location Target Market

1

Local Expansion

Begusarai Barauni

Begusarai

Karimnagar

Chitradurga

Haldia

Vizag, Tatipaka

Mangalore

Capture 20% of Refinery Demand

Scale Up: Economies of Scale & Entry Barriers

Target 50% of Refinery Demand

2

3

4

Future Expansion

Social Impact

Create a market for Corn Stover, which is otherwise a waste product

Results in 30% increase in farmer income

Eco-friendly method of fuel productionProduced in semi arid regions with little agricultural support

Thank You

Back-up Slides

Raw Material Cost

8.29Total Variable Cost

0.15Transportation

0.60Warehousing

Distribution Cost

7.54Total RM Cost

0.25Denaturant

1.85Enzymes

0.50Corn Steep Liquor

4.95Corn Stover

Rs / LiterRaw Materials

Back

Warehousing and Transportation Costs

0.6Total Warehouse Cost Rs./Liter

60 daysAverage Storage Period

50 kgQuantity of bag

15 paise / bag / dayCost of storage

Warehousing Cost

0.15Transportation Cost Rs./Liter

25Overheads ( driver, other overheads) (Rs. / Liter)

35Diesel Cost (Rs. / Liter)

4Mileage ( Km / Liter)

10Capacity of oil tankers (Tonnes)

100Distance between Barauni and Begusarai (Km)

Transportation Cost

Back

Labor & Admin Costs

1260000 Total Monthly Labor bill

420000 Total Labor bill for 1 shift ( 3 shifts daily)

600004005Distillation/Dehydration

600004005Fermentation

600004005Cellulose Treatment by enzymes

600004005Pre-treatment Conditioning

9000020015Solid Separation

9000020015Feed Handling

Monthly wage Bill (Rs.)

Daily Wage Rate (Rs.)No. of workersDirect Labor ( Plan )

300000 Total Admin Cost

4000040,0001Plant Manager

6000012,0005Admin Support staff

20000020,00010Supervisors

Monthly wage Bill(Rs.)Monthly SalariesNo of workersOffice Administration

Back

Overhead Costs

1.17Total Overhead Cost

0.09Waste Disposal

0.18Energy Cost

0.9Labor and Admin Cost

Overhead Costs (Rs./Liter)

0.9Labor and Admin Cost Rs. / Liter

1800000Planned monthly production for ethanol

1560000Total Wage Bills for the month ( 2 shifts daily)

Back

Pricing

17.00Final Price

5.00Mark up

12.00Total Cost in producing 1 Liter of Ethanol

1.30Interest Cost

0.6Depreciation

1.17Overhead Cost

8.29Variable Cost

(Rs/Liter)Total Costs

Back

Capital Costs

350Total Capital Investment ( Rs. Million)

100Boiler/Turbo generator

25Solid/Syrup Separation

14Distillation

50Cellulose Production

40Simultaneous Saccharification/Co-fermentation

80Pre-treatment/Detoxification

Plant Machinery & Equipments

35Building and Civil Structure

6Land

Capital Costs ( Rs. Million)

Back

Revenue Projections

274259227184153Revenue (Rs. Million)

1918181717Price ( Rs/Liter)

144001440012600108009000Ethanol Produced (T/Year)

80%80%70%60%50%Capacity Utilization

18,00018,00018,00018,00018,000Installed Capacity (T/Year)

20112010200920082007 Years

Back

Profit and Loss Statement

36%30%23%14%9%ROE

7058452717PAT (Rs. Million)

302519127Tax @ 30%

10084643924PBT

1620232323Interest Expense

1010101010Depreciation

126114977257EBIDT

11111Waste Disposal

33222Energy Costs

65544Admin Costs

1817171515Direct Labor

Expenses

1541401229478Gross Margin

22221Transportation

99865Warehousing

109109958168Raw Material

Cost of Goods

274259227184153Revenue

20112010200920082007Years

Back

Free Cash Flow Projections

50475336-323Free Cash Flow (Rs. Mn)

3020000Repayment of Principal

0.721.622.161.530Change in working capital

13.6812.9611.349.187.65Working Capital

0000-350Capital Expenditure

1010101010Add Depreciation

7058452717PAT

20112010200920082007Year

Back

NPV Calculation

25Net Present Value (Rs. Mn)

11710598887659-300Free Cash Flow to the share holders

02.520.721.622.161.530Change in working capital

16.216.213.6812.9611.349.187.65Working Capital

000000-350Capital Expenditure

10101010101010Add Depreciation

107978880685040EBIDT(1-t)

2013201220112010200920082007Year

Discount Rate = 15%

Back

Cost Comparison

7119Input Cost Rs. / Ltr of Ethanol

30045072Yield Ethanol (Ltrs/T)

20505000640Input Cost (Rs. /T)

550NegligibleNegligibleEnzyme Cost (Rs./T)

15005000640Procurement Cost (Rs./T)

(Cellulose)(Starch)(Sucrose)

Corn StoverCorn KernelSugar CaneRaw Material

Back

Social Impact

30%Percentage increase in income

4500Income from Stover at Rs. 1.5 /kg (Rs.)

3Corn Stover Produced (T)

1:1Maize : Corn Stover Ratio by Weight

15000Income from Maize at Rs. 5/kg (Rs.)

3Maize Produced (T)

3Yield of Maize (T/Ha)

1Size of Land Holding (Ha)

Additional Income from 1 Hectare (Ha) Land Holding

Back

Process Description

Corn Stover

Collection Pre-Treatment

Steam & Acid

S/L Separation Conditioning

Lime Gypsum

Sachharification & Fermentation

Solids

Enzyme

Distillation & Purification

Ethanol SteamSteam & Electricity

LiquorHydrolyzate

BrothLignin Residue

Burner/Boiler

TurboGenerator

Back

"corn banaayega crorepati" ppt

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