POC Conference, March 10 th- 12 th  2009 Developed By Frost & Sullivan Consulting Team Frost & Sullivan www.frost.com  The...
Frost & Sullivan : Leading growth consulting company with over 45 history and 1800 staff in 35 offices in 26 countries 12 ...
Frost & Sullivan expertise in biofuels : we provide strategic advice over the whole palm to biofuels value chain 12 th  Ma...
Confidential to Frost & Sullivan  … .. What we said last year at the POC (Feb. 2008) We could get to  4000 RM  quicker tha...
Confidential to Frost & Sullivan  … .. What we said last year at the POC (Feb. 2008) 4500 RM  is now not out of reach at t...
Confidential to Frost & Sullivan  … .. What we have been saying for the last 2-3 years Same as internet lifecycle! Infancy...
Confidential to Frost & Sullivan  2007, early 2008 : lessons from the past – we will see some or all of this again, 2007 w...
Confidential to Frost & Sullivan  Indeed palm prices are high due to the soy situation in South America at the moment – cr...
Confidential to Frost & Sullivan  Sustainability issue.... Q. Are Biofuels therefore sustainable,  or can we expect more o...
Confidential to Frost & Sullivan  Sustainability issue.... <ul><li>Yes, but … </li></ul><ul><li>They will only be part of ...
Confidential to Frost & Sullivan  Sustainability issue.... <ul><li>This is still a market that needs: </li></ul><ul><li>Lo...
Confidential to Frost & Sullivan  Profitability assessment :  We can thus expect a lot of volatility in the market in line...
Confidential to Frost & Sullivan  Profitability assessment : causing wild swing Source : FC Stone
Confidential to Frost & Sullivan  Biodiesel production is not the most profitable part of the value chain Feedstock Refini...
Confidential to Frost & Sullivan  So why such an interest still in biodiesel “ It is a political market from a Government ...
Confidential to Frost & Sullivan  Market will continue to look for ways to grow especially bioethanol – energy security/ p...
Confidential to Frost & Sullivan  … whether this model is sustainable over the mid to long term we will see. Growing popul...
Confidential to Frost & Sullivan  Thank you [email_address] +65 9615 8293
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The Future of Biodiesel – Will it Be Sustainable?

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Frost & Sullivan Analysis of the Biodiesel market.

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The Future of Biodiesel – Will it Be Sustainable?

  1. 1. POC Conference, March 10 th- 12 th 2009 Developed By Frost & Sullivan Consulting Team Frost & Sullivan www.frost.com The Future of Biodiesel – Will it Be Sustainable? Price Outlook for 2009
  2. 2. Frost & Sullivan : Leading growth consulting company with over 45 history and 1800 staff in 35 offices in 26 countries 12 th March 2007, © Frost & Sullivan <ul><li>London </li></ul><ul><li>Kuala Lumpur </li></ul><ul><li>Singapore </li></ul><ul><li>Mumbai </li></ul><ul><li>Chennai </li></ul><ul><li>Beijing </li></ul><ul><li>Tokyo </li></ul><ul><li>Toronto </li></ul><ul><li>Frankfurt </li></ul><ul><li>New York </li></ul><ul><li>San Antonio </li></ul><ul><li>Shanghai </li></ul><ul><li>Sao Paulo </li></ul><ul><li>Buenos Aires </li></ul><ul><li>Palo Alto </li></ul><ul><li>Paris </li></ul><ul><li>Sydney </li></ul><ul><li>Seoul </li></ul><ul><li>Mexico City </li></ul><ul><li>Cape Town </li></ul><ul><li>Tel Aviv </li></ul><ul><li>Warsaw </li></ul><ul><li>Bogota </li></ul>
  3. 3. Frost & Sullivan expertise in biofuels : we provide strategic advice over the whole palm to biofuels value chain 12 th March 2007, © Frost & Sullivan <ul><li>Technology Analysis Biodiesel Market </li></ul><ul><li>European Biodiesel Market </li></ul><ul><li>Asian Biodiesel Market </li></ul><ul><li>US Biodiesel Market </li></ul><ul><li>Brazilian Biofuels Market </li></ul><ul><li>Several Due Diligence Projects for Investors </li></ul><ul><li>Market Assessment and Strategy for Players </li></ul><ul><li>Business Planning and Fund Raising </li></ul><ul><li>Information Memorandum for Several Players </li></ul><ul><li>Feedstock and Off-take Sourcing </li></ul><ul><li>Reports </li></ul><ul><li>Consulting </li></ul>
  4. 4. Confidential to Frost & Sullivan … .. What we said last year at the POC (Feb. 2008) We could get to 4000 RM quicker than we think Written 5 days prior to POC 2008
  5. 5. Confidential to Frost & Sullivan … .. What we said last year at the POC (Feb. 2008) 4500 RM is now not out of reach at this rate Written 1 day prior to POC 2008
  6. 6. Confidential to Frost & Sullivan … .. What we have been saying for the last 2-3 years Same as internet lifecycle! Infancy Boom Bust Reality
  7. 7. Confidential to Frost & Sullivan 2007, early 2008 : lessons from the past – we will see some or all of this again, 2007 was just a warning High Crude Oil Price Bad Weather Commodity Price Shift Biofuels Extra Demand Subprime HIGH PRICES!
  8. 8. Confidential to Frost & Sullivan Indeed palm prices are high due to the soy situation in South America at the moment – crops are now more interlinked Frost & Sullivan estimates 1 ? <ul><li>Price </li></ul><ul><li>Increase </li></ul>
  9. 9. Confidential to Frost & Sullivan Sustainability issue.... Q. Are Biofuels therefore sustainable, or can we expect more of this?
  10. 10. Confidential to Frost & Sullivan Sustainability issue.... <ul><li>Yes, but … </li></ul><ul><li>They will only be part of the mix for fuels until cellulosic kicks in, or non-food crops in the case of biodiesel, </li></ul><ul><li>They will be prone to swings in profitability (“swing market”), </li></ul><ul><li>They are a financial game where hedging is of utmost importance, </li></ul><ul><li>It will thus be a game played by the big boys, esp, with plantations </li></ul><ul><li>The big suppliers will push the product onto the market – it is supply led rather than demand led, until proper legislation is put into place </li></ul>
  11. 11. Confidential to Frost & Sullivan Sustainability issue.... <ul><li>This is still a market that needs: </li></ul><ul><li>Low feed stock prices, </li></ul><ul><li>Government mandates and subsidies, </li></ul><ul><li>High crude oil prices. </li></ul><ul><li>And all 3 need to ideally happen at the right time….. </li></ul>
  12. 12. Confidential to Frost & Sullivan Profitability assessment : We can thus expect a lot of volatility in the market in line with crude oil!
  13. 13. Confidential to Frost & Sullivan Profitability assessment : causing wild swing Source : FC Stone
  14. 14. Confidential to Frost & Sullivan Biodiesel production is not the most profitable part of the value chain Feedstock Refining Biodiesel Logistics Distribution Blending/Retail * Relative Profitability <ul><li>*With Rebate </li></ul><ul><li>Refining Traditionally Tough Business </li></ul>+ve -ve Mills <ul><li>The value chain is unbalanced and typical of the chemical industry. To be successful one needs to piece value chain together, and work with partners </li></ul>
  15. 15. Confidential to Frost & Sullivan So why such an interest still in biodiesel “ It is a political market from a Government perspective, and for plantation companies it is a great way to keep palm oil prices high”.
  16. 16. Confidential to Frost & Sullivan Market will continue to look for ways to grow especially bioethanol – energy security/ politics will be a key reason behind this Frost & Sullivan estimates Millions of Litres BIOETHANOL 1 20 40 20 60 120 BIODIESEL 2000 2000 2020 2040 2020 2010
  17. 17. Confidential to Frost & Sullivan … whether this model is sustainable over the mid to long term we will see. Growing population Crops Competing for Land Energy needs Water stress 1 2 3 4
  18. 18. Confidential to Frost & Sullivan Thank you [email_address] +65 9615 8293
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