jatropha-geezteam 41 report

7/29/2019 Jatropha-geezteam 41 Report

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GeeBiz 2011 Competit ion

AE*(IranPersian/English),AweSariatAdenike(NigeriaYoruba/English),

ElianaSofaMartnesCollazos(ColombiaSpanish/English),JillBalek(USA),

GG*(IranPersian/English),SandraSimanskyte(USA),

KellyYulianaOspinaTuberquia(ColombiaSpanish/English),AndreGilhespy(NewZealand)

*Iraniannames

have

been

suppressed

for

the

safety

of

the

students.


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Table ofContents

Overview 3

Goals. 3

TheJatrophaTree 3

BusinessConcept. 4

Marketenvironment. 5

Impact.. 5

Financial.. 6


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Overview BioDieselNigeria(BDN)isacompanythatwillprovidejobsforNigeriansbyfarmingJatropha

seeds.Thecompanywillemploythoselivinginpovertyinthecitiesandrelocatethemto

Jatrophafarms

in

the

north.

Here

they

will

be

trained

to

farm

Jatropha

trees

and

be

paid

a

decentwage.OncetheyhaveworkedforBDNthroughoneharvesttheywillbecomepart

ownersofthebusiness,givingthemtherighttoashareoftheprofits.Inthisway,BDN

ensuresthatcontrolofthebusinessstayswiththeworkersandtheprofitsgotothelocal

community.TheJatrophatreegrowswellinaridlandunsuitableforfoodcropsandcanhelp

combatdesertification,makingitwellsuitedtothenorthofNigeria.Thereisasignificant

marketfortheseedsthatsellforapproximatelyUS$140pertonne.

Goals BioDieselNigeriahasmultiplegoalsforimprovingNigeria:

ReducepovertylevelsthroughworkerownedJatrophafarms.Byrecruitingdirectlyfromthoselivinginpovertyandtheirfamilies,BDNwillbemakinganimmediate

impactonpovertyinNigeria.

Createasustainablebusiness;keepingtheprofitsinNigeriabydistributingthembetweentheworkersandreinvestingtogrowthesizeofplantations.Thiswillensure

theprofitsarenotbeingtakenoverseas;theyaredirectlybenefitingthelocal

community.

Provideasourceofincomeforthecountrythatdoesnotrelyontheoilindustry.TheinternationaldemandforJatrophaoilisgrowing,givingNigeriathechancetoreduce

itsdependenceontheoilcompaniesforincome.

HelptohaltdesertificationbyplantinglargevolumesofJatrophatreesalongtheedgesofencroachingdesert.ThiswillbenefitfarmersgrowingsouthoftheJatropha

farmsbyprotectingthemfromdecreasingsoilquality.Thiswillgivethemthe

opportunitytoimprovetheirsoilqualityandgrowingpotential.

The Jatropha Tree TheJatrophacurcastreeisasmallperennialtreethatgrowswellinbarrenlandandis

droughttolerant.

It

can

grow

almost

anywhereanditshedsitsleavesinthe

dryseasoncreatingmulcharoundthe

baseofthetree.Thismulchencourages

earthwormactivity,coupledwiththe

nitrogenfixingqualitiesofthetreethis

helpstoimprovesoilquality.Thetree

producesseedsonceayearandstarts

toproduceinthefirstyearwithyields

increasingasthetreeages.TheJatropha

curcascan

live

for

up

to

40

years

so

thereisnoneedtoreplanteachyear.


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Jatrophaseedscontainroughly2830%ofnonedibleoilthatburnswithasmokefree

flame.Thisoilisoneofseveraldifferenttypesthatcanbeusedincreatingbiodiesel.Itis

alsousefulforindoorcookingandlanternsduetothelackofsmoke.Priortobeing

processed,theseedsmustberemovedfromthefruitpodsanddried.Exposuretosunlight

duringdrying

tends

to

degrade

quality

and

storage

life

of

the

seeds

so

it

is

important

to

havecoveredareasfordrying.Ifdriedcorrectlytheseedscanbesafelystoredforupto15

months.

Seedyieldsvarysignificantlyduetogrowingconditionssuchasmoisture,spacing,

fertilisation,andsoilquality.Itisclaimedthatsandysoilcanproducethebestresultsif

fertiliserisadded.Inmoretropicalenvironmentswithregularrainfall,theJatrophatreeis

capableofproducingseedseveryfourmonthsinsteadofonceayear.Somesourcesclaim

thatataspacingof3mX2m(1600perhectare),eachtreecanyieldbetween0.5 1kgof

seedspertree,resultingin1.64tonnes/hectares.Seedyieldsincreaseasthetreeages

resultingin

higher

productivity

per

hectare.

Business Concept BioDieselNigeriawillberunbyNigerianbusinessmen/womenwhoalreadyhaveknowledge

oftheagricultureindustry.Itwillhirethoselivinginpovertyinthecitiesandhelprelocate

themtonorthernNigeria.TheywillreceivetrainingonJatrophafarmingandstartplanting

thefarms.Anyemployee,farmerornot,whohasworkedforthecompanythroughtheir

firstharvestwillthenbeconsideredashareholder.Thiswillentitlethemtoanequalshare

inthecompanysprofits,makingsurethemoneystaysinthecommunity.

Thecompanywillstartwithaplantation

sizeof2,000hectaresandaimtohire

4,000farmers.Farmingpracticesvary

significantlyaroundtheworld,withsome

sourcesclaimingonefarmerperfour

hectaresandotherscitingfourfarmersper

hectare.BDNhaschosentotrialthe

middlegroundwithtwofarmersper

hectareandwillhavetheflexibilityto

modifythisratioifneeded.

Largedryingshedswillbesetupinacentrallocationtofacilitatetheextractionoftheseeds

fromtheirpods,drying,andpackingforshipmenttobuyers.Thiswillprovidethecomplete

servicefromgrowingtoshippingtoprocessors.ThereisaJatrophaoilprocessingplant

currentlybeingbuiltthatwillbeoperationalbythetimeourfirstharvestisreadytobesold.

DuetogoalsofBDNwewouldprefertofindlocalbuyersforourseedsinordertokeepas

muchoftheprofitswithinNigeriaaspossible.

IfthereisinsufficientcapacityforseedprocessingwithinNigeriawewouldsetupaplantof

ourown.Thiswillprovideuswithahighervalueproductandanextrarevenuestreamfrom

processingother

growers

Jatropha

seeds.

As

our

company

grows,

some

profits

will

be


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reinvestedinexpandingthenumberofhectaresundercultivation,providingmorejobsfor

thoseinpoverty.Someprofitswillalsobeinvestedintechnologysuchasdripirrigationto

boosttheproductivityofthefarms.

Market Environment Nigeriaisreliantontheoilindustryforthevastmajorityofitsexports;itisthe12thlargestproducerofpetroleumintheworldandthe8thlargestexporter.Theseearningsdonot

tendtotrickledowntheeconomyandthepooraregettingpoorer.However,in2005

Nigeriapaidoffitsinternationaldebts,freeinguproughly$1.15billionperyearforpoverty

reductionprograms.AgricultureisaveryimportantsectoroftheNigerianeconomy;itused

tobetheworldslargestexporterofgroundnuts,cocoa,andpalmoil.About60%of

Nigeriansworkintheagriculturalsectorbuttherearestilllargeareasofunderutilisedland

available.

TheNigerian

government

is

trying

to

promote

the

farming

and

processing

of

Jatropha

seeds.

Astheindustryisonlyjustgettingstarted,thereislittlecompetitionandalotofsupport

fromthegovernment.TherehasbeenN50billionsetasideforcommercialfarmingincluding

Jatrophaandisofferingspeciallowinterestloansforinvestorsinthebiofuelindustry.The

FederalMinistryofScienceandTechnologyissupportingJatrophafarming,offeringtraining

workshopsandotherservices.

Thereisanestablisheddemandinternationallyforbiodieselanditcontinuestogrowdueto

environmentalconcerns.Theworldwidemarketwas$18.4billionin2010andisestimated

toincreaseto$71billionby2020.Asignificantpartofthisgrowthisduetomanymajor

airlines

pledging

to

source

up

to

10%

of

their

fuel

needs

from

bio

fuels

by

2017.

Impact BioDieselNigeriahasthechancetosignificantlyimprovethelivesofthousandsofNigerians

livinginpoverty.Itcandirectlyaffectthequalityoflifeofitsemployeesbyprovidinga

decentincomeandprofitsharing,andcanindirectlyaffectthelivesofthousandsmore

Nigeriansasearningsarespentwithinthelocalcommunities.Astheoperationexpands,the

directimpactwillincreaseandthetrickledown

effectwillbecomemoreandmorepronounced.

Becausethe

company

is

owned

and

operated

byNigeriansitincreasestheseeffectsby

keepingalltheprofitsinthecountry,further

increasingitsabilitytoincreasethestandardof

livingofmanyNigerians.

BDNwillalsohelptoincreaseactivityinthebio

fuelindustrywithinNigeriaandraisethenonoil

contributiontoGDP.Thiswillhelptheeconomy

breakfreeofitsrelianceontheoilindustryand

fosterasense

of

pride

within

those

working

for

BDN.


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ByplantingJatrophaalongthearidnorthernbordersofNigeriaBDNwillplayasignificant

roleinslowingandpossiblyhaltingdesertification.Oncetheplantationsbecomeirrigated,

thisimpactwillbefurtherincreased;havingtheeffectofimprovingthesoilqualityofthe

surroundingareas.Thiswillaidthecountryasawholeduetolargerareasoffarmableland

andreducingtheworryoflosinglandtotheencroachingdesert.

Financial US$

Year1 Year2 Year3 Year4 Year5 Year6Seeds(tonnes) 3,200 4,000 5,000 8,000 10,000 10,000Sales 448,000 560,000 700,000 1,120,000 1,400,000 1,400,000

Wages 387,000 387,000 387,000 387,000 387,000 387,000

GrossProfit 61,000 173,000 313,000 733,000 1,013,000 1,013,000

2000haplantation

Therewillbeotheroverheadcostsandsetupcostswithinitialplantingandlandpurchasing,

butatthisstage,itishardtoestimate.BDHisnotexpectingtomakeaprofitinthefirst

year,asseedyieldswillbequitelow,howeverthestandardmodelforJatrophafarmsshows

profitsinthesecondorthirdyear.Asthetableshows,profitsincreaserapidlyasseedyields

increase.This

will

allow

investment

in

irrigation

technology

at

the

end

of

the

third

year,

significantlyincreasingyieldsinthefollowingyears.Attheendofthe4thyearwewilllook

atexpandingthenumberofhectares

undercultivationtocapitaliseonthe

marketandpushgrowth.

WewillpayourfarmersN30,000per

year.Thisisabovetheaverage

agriculturalwageofN1020,000and

almostdoubletheminimumwageof

N18,000

but

still

N3,000

less

than

the

percapitaincomeofN33,000.Wedoexpecttheirincometoincreasesubstantiallyaftera

fewyearsduetoprofitpayoutsfromBDN.Becausethecompanywillnotbeprofitablefor

thefirst12years,thewageneededtobesetatareasonableratebutnotsohighasto

cripplereinvestmentopportunities.

Ourstartupcapitalwillbesecuredfromlowinterestgovernmentloansaspartoftheir

initiativetopromotetheagriculturesectorandJatrophafarminginparticular.Ifwedecide

tobuildaprocessingplantfundingisavailablefromthegovernment,theyhaveputaside

N10billionforlowinterestloansavailabletoinvestorsinbiofueldistilleries.

jatropha-geezteam 41 report

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