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Business plan bio gas


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Business plan bio gas

  2. 2. Table of Contents1... Executive summary----------------------------------------------------------------- 1 & 23.1 Company profile---------------------------------------------------------- 3 3.2 Products and Services -------------------------------------------------------------3 3.3 Size and form of Business --------------------------------------------------------3 3.4 Office Equipment and Personnel-------------------------------------------------3 3.5 The Entrepreneurs------------------------------------------------------------------34.1 Vision ------------------------------------------------------------------------------4 4.2 Mission-------------------------------------------------------------------------------4 4.3 Market need--------------------------------------------------------------------------4 4.4 The problem----------------------------------------------------------------------- 45. “Situation analysis”-------------------------------------------------- 5 5.1 POLITICAL-------------------------------------------------------------------------5 5.2 ECONOMICAL---------------------------------------------------------------------56.1 Social------------------------------------------------------------------------------ 6 6.2 Technological-------------------------------------------------------------67. “Industry Analysis”--------------------------------------------------------------7 7.1 Energy Supply & Demand------------------------------------------------------------78.1 Competition-----------------------------------------------------------------------------8 8.2 Current Trends----------------------------------------------------------------- 8 8.3 Environment------------------------------------------------------------------- 89. SWOT ANALYSIS---------------------------------------------------------------9 9.1 Strengths------------------------------------------------------------9 9.2 Weaknesses--------------------------------------------------------910.1 Opportunities-----------------------------------------------------------------10 10.2 Threats-----------------------------------------------------------10 10.3 Segmentation & targeting--------------------------------------------------1011.1 POSITIONING---------------------------------------------------------------11 11.2 Slogan-------------------------------------------------------------11
  3. 3. 11.3 Service differentiation------------------------------------------11 11.4 Image differentiation--------------------------------------------11 11.5 4P’s--------------------------------------------------------------11 11.6 Product---------------------------------------------------------------------11 11.7 Level of products---------------------------------------------------------11 11.8 Price------------------------------------------------------------------------11 11.9 Placement------------------------------------------------------------------1112.1 Promotional Mix-------------------------------------------------------------12 12.2 Marketing Strategy------------------------------------------------------12 12.3 Marketing Objectives---------------------------------------------------12 12.4 Production Plan Biogas generations------------------------------12 12.5 General factors which influence biogas production-------------------1213. BIO GAS Generation Process-----------------------------------------1314. Management plan--------------------------------------------------14 14.1 Form of Business--------------------------------------------------------14 14.2 Identification of the members------------------------------------------14 14.3 Board of Directors-------------------------------------------------------1415. `Roles and Responsibilities of the Members------------------------------1516.1 REWARD STRUCTURE--------------------------------------------------16 16.1.1Financial Rewards--------------------------------------------------------------------16 16.1.2 Others Rewards-----------------------------------------------------------------------16 16.1.3 Working Hours------------------------------------------------------------------------16 16.2 Lunch Hours-----------------------------------------------------------------------------16 16.3 Leave Schedule-------------------------------------------------------------------------16 16.4 Succession Planning--------------------------------------------------------------------16 16.5 Training----------------------------------------------------------------------------------1617. Financial plan------------------------------------------------------------------1718. Pro Forma Income Statement-------------------------------------------------1819.1 Pro forma Balance sheet--------------------------------------------------------------------1920. “Risk Assessment”-------------------------------------------------20 20.1 Level of Risks---------------------------------------------------------20 20.2 Product and Execution
  4. 4. Risk-------------------------------------------------------20 20.3 Financial and control Risk---------------------------------------------------------20 20.4 CONCLUSION-------------------------------------------------------20 “Executive Summary” Perennial Power is a Faisalabad based startup company dedicated to providing a cost effectiverenewable energy source “Biogas” in the form of different products, categorized according todifferent consumption patterns that will be extremely beneficial for our target customers in the faceof this severe energy crisis in the country. The product offerings of the company include Biogasfor households, Electricity for industry and Biogas for transportation. The company is also aimedat providing consultancy services regarding the integrated energy solutions by pursuing thestrategy of continued Research and Development.The company was formed in 2008 and currently has 7 members. The company’s name trulyreflects the nature of the business, which is to provide the energy source that is never ending. Thecompany’s management team consists of the MBA students having specializations in the fields ofHuman Resource Management, Finance and Management Information System.3.1The main reasons for the initiative taken by the company are to capitalize on the opportunity ofproviding alternative energy sources to the consumers, the recognition of the fact that biogastechnology is progressive and the demographic changes in the consumer demands to use more costeffective energy intensive products. 3.2By pursuing this business the company is aimed tointroduce the solutions for reducing dependence on the energy imports and thus contributing theeconomy in a very positive way, while at the same time to further our efforts for makingenvironment friendly products and having a very beneficial output from the waste. So, thecompany is pursuing the project which is not only socially acceptable but at the same quiteprofitable as shown by its economic feasibility.The initial capital required for the establishment and operations of the company is Rs. 31 million.In the first full year of operation, the company has estimated to reach Rs.75 million of sales. Theanalysts project that the sales will grow to 35% a year within the next 3 years, with the gross profitmargin of 45%. The payback period of the project is four years.The company’s values include quality, trust, respect for teammates and betterment of environment.The company intends to become a pioneer, for producing biogas on the commercial level inPakistan, by introducing and expanding its diversified products and geographical coverage withthe passage of time.The perennial power company organization is based on modern management structure compriseson two committees EXCOM and MANCOM. EXCOM (Executive committee) comprises on headof the departments and MANCON (Management committee) comprises on functional managementwho are looking day to day activities of the organization. The company is applying the HRpractices for the betterments of its employees.The target market for Perennial Power Company is considered to be the villages closer to thecompany’s production plant at the initial level. In addition to this the company’s major customersinclude WAPDA and other factories located near the production site. Currently, the company is 1
  5. 5. not expected to face any kind of direct competition for biogas production, at least at thecommercial level. For the future, the company believes that it would be able to compete effectivelybecause of its high quality products, dedicated workforce, effective planning and continued R&D.To increase the public awareness about the venture, the company has decided to use word ofmouth, education sponsorship programs and radio advertising as the prime sources.The company, at the initial level, plans to use 6,500 cubic meters of animal manure and 4,200cubic meters water as the input. After producing the required amount of biogas from this input theremainder or bio slurry can be used as the fertilizer, making this process even more beneficial andprofitable because this can be sold at the reasonable cost, which then can be utilized for coveringthe input cost of Perennial Power Company.For the efficiency and timeliness of its operations while at the same time for ensuring theappropriate control over the production process, the company is aimed at using InformationTechnology as a competitive edge. In this regard, it has decided to use customized software tocontrol the whole production process in the highly effective and efficient manner with the greataccuracy. In addition to this, the internal computer network is established for the close coordinationbetween the production and the technical staff while at the same time the external networks andinternet would be utilized, especially by R&D personnel, in order to keep themselves currentabout the latest trends and developments in the environment and provide their recommendationsand suggestions to the top management and operational staff accordingly. The R&D departmentis also in close collaboration with Pakistan Council of Renewable Energy Technologies (PCRET)for having the information about the latest research and development being done in the sector ofalternative and cost-effective methods of producing biogas.The physical plant of the company for the biogas production is installed at the Burleb SewageCanal, Sargodha Road, Faisalabad. The total area covered by this plant installation is 8 acres andis acquired at the lease of per acre per annum. The machinery and equipment required for theprocess include Digesters, Gas chamber, 15 Turbines, Pressure Control System, CylindricalPurification System, Bacteria Checking Machines, Container Trucks, Process Control System.With reference to company’s manufacturing facility the whole gas production process is done bythe Perennial Power Company and no part of the production is subcontracted to some otherentity.The company receives the input for the biogas production process from Adil Dairy Farm, ShoukatDairy Farm, and 3000 small farmers, Vegetable Market, Dead Animals, Sewage Lines andBhains Colony. The company has an initial risk of financing and product execution while other risks are notmuch concern to the greater extent. The company is doing business in a suitable environmentwhere the chances of success are very high. 2
  6. 6. 3.1 Company profilePerennial Power Company, will be located in Faisalabad, is basically a startup venture for producingbiogas at the commercial level taking biomass and other manure as the input and at the same timeproviding integrated energy solutions to the end consumers and society in a very economical andenvironment friendly way. The objective of this company is to provide biogas energy to its customers at thelower cost than other renewable energy resources while at the same time to preserve our environment byrecycling the waste to produce beneficial products.Name of product: GREEN AND CLEAN ENERGYName of company: PERENNIAL POWER COMPANYAddress of company: NISHATABAD ROAD WEST FAISALABAD3.2 Products and Services:-The products and services that will be offered are categorized according to different segments ofconsumptions consisting of; • Industry, • household • Transportation.The offerings in this regard will include biogas for household use as well provide to industry at initial stage,bio fuel for the vehicles named as Bio CNG cylinders, bio energy for electricity generation and theconsultancy services for house hold energy solutions.3.3 Size and form of Business:-The key factor determining the success of the business is that it is going to operate in the sector where thedemand of the energy is considered to be ever increasing and everlasting, which is also depicted by thename of the company.3.4 Office Equipment and Personnel:-The company has more than 30 employees working in three shifts; whole process of production is carriedthrough the support of technology.3.5 The Entrepreneurs:-The company’s name truly reflects the nature of the business, which is to provide the energy source that isnever ending. The company’s management team consists of the MBA students having specializations in thefields of Marketing, Human Resource Management, Finance and Management Information System.Website: www. Perennial 3
  7. 7. 4.1 Vision:-“Changing life styles with economic and unique available resources”4.2 Mission:-“Our mission is to provide integrated energy solutions to our customers in anenvironmentally friendly and socially responsible manner. In other words, we will strivehard to provide power in a way that is sustainable in the long term. We believe it isessential not only to make profits but also to care about people and protect theenvironment. We will lead by example through a commitment that empowers ourcustomers ensuring the excellence at all levels of our operations, performance,products and services.Simultaneously,actively contribute towards welfare of society andsocial uplift of the under privileged section of the community ”4.3 Market need:-Pakistan is one of the developing countries facing a huge demand in the energy sector due to thetrends of improving lifestyles and growing population. However, sufficient number of industriescan’t be set up especially in rural areas so far due to scarcity of energy supply.Security and affordability of energy supplies are key inputs to ensure sustainable development.Equitable access to energy constitutes a basic element of effort to combat poverty and sustainedeconomic activity. Pakistan has predominantly rural society where biomass fuel is the majorsource for cooking and rural women are primarily involved in biomass collection and use.4.4 The problem:-Excessive use of biomass energy is not only a threat to the environment due to the high use offorest resources, but also results in a drop off in the agricultural productivity due to the diversionof agricultural residues and animal waste from farms to fireplace.This situation is worsened by the low level efficiency of these fuels, which are a health hazarddue to increased air population, particularly to rural women who are the managers, producers andusers of energy at the household level. 4
  8. 8. 5. “Situation analysis of “Perennial Power Company” “Environmental analysis” 5.1 Political:-Presently, the political scenario of Pakistan is quite favorable for using renewable energy resourcein order to eliminate the severe energy crisis in Pakistan. One of the major problems facingthe new government, the energy crisis, is intense, costly and multidimensional. Theinfuriating electricity and gas disruptions and soaring fuel prices in turn pushing the cost ofliving have made life very difficult for the people of Pakistan. The even before it took office thenew government was greeted with two jumps in fuel prices, accounting for the 15% in two weeks.Meanwhile crude oil prices have been registering all-time-highs, shooting 40% in the past year.The endless reality is that this global spike will somehow have to be accommodated in the energyprices in Pakistan.In this crucial situation, the government now understands that, in order to tackle the existingenergy crisis and ensure a prosperous energy future, the backbone of the future energypolicies would have to be reliance on domestic resources (Biogas, Hydropower, Solar and Windenergy) as well as the energy conservation. In this regard, government made a policycommitment to encourage the biogas installation plants in the country along with the 75% interestsubsidy on loan from the federal government of Pakistan. 5.2 Economical:-Energy sector is one the most important sectors driving the economy of Pakistan and that’s whysome of the latest fluctuations due to the energy crisis in Pakistan are having an adverse impacton the economy of Pakistan coupled with the widening gap between demand and supply inthis particular sector.A huge shock for the present economic condition is that international oil prices have notonly broken all records and are touching the new heights. Moreover, speculators all around theworld expect oil prices to touch $110 per barrel in the medium term. With concerns over manyissues oil prices don’t see any other way but to shoot upwards. The macro –economicimplications of supply shock induced energy crisis are large, because energy is the resource usedto exploit all other resources. Pakistan’s Medium Term Development Framework (MTDF)2005-2010 sets out a challenging program to achieve 8% annual growth in GDP. Associatedgrowth in energy consumption is forecasted at 12% a year and this expected growth wouldhave drastic pressure on all sectors of Pakistan’s primary energy supplies.Pakistan has a deficit of fossils or hydrocarbon sources of energy to cover up the deficit; itdepends upon importing crude oil at an enormous cost from its meager forex reserves. The needof crude oil is on an increase because of an improved lifestyle, which has necessitated the use ofvehicles are cars for transportation. Imports of crude oil at about $110 per barrel increased thetrade deficit and the current account deficit. In addition to this, being an energy importer, theshooting up dollar value is also posing a huge threat to the economy. In view of Pakistan’smeager resources of fossil fuels, the dependence on imported petroleum is expected to increase,therefore putting the economy under great strain. In this way, an alternate source like nuclear, 5
  9. 9. 1solar, wind and biomass energy would have to be explored. But it should be kept in closeconsideration of the environment degradation problems and processes, which are environmentfriendly, should be adopted. 6.1 Social:-Pakistan has predominantly rural society where biomass fuel is the major source for cooking andrural women are primarily involved in biomass collection and use. Biogas energy has potential tosave the metabolic energy and the time of women, which could be used for other productiveactivities that enable women to be socially, psychologically and politically empowered. Theirlivelihoods are threatened due to their heavy workloads and deteriorating health conditions in theabsence of good nutrition and health services.There are alternative energy resources (especially biogas) that offer significant potential in termsof reducing women drudgery and improving health conditions, allowing rural women to haveenough time to be involved in income-generating, social and community development activitiesfor their self-enhancement and empowerment.Often the beliefs, prejudices, habits, etc, prevailing in the society pose problems for promotion ofthe biogas technology .Factors such as educational background and income of the beneficiariesmay also affect the speed of BT adoption.This has to be tackled in two ways: (1) We’ve to try to introduce the plant models most suited forthe area and (2) devise suitable training of extension workers to enable them to take the messageof BT to the people. 6.2 Technological:-Pakistan Council of Renewable Energy Technologies (PCRET) has been recently established bymerging National Institute of Silicon Technology (NIST) and Pakistan Council for AppropriateTechnologies (PCAT). PCRET has been assigned the responsibility of Research andDevelopment dissemination and provides trainings to promote renewable energy technologies inthe country and their main areas of functions include providing all the information and technicalassistance regarding biogas plants installations in Pakistan.The technology change rates, with respect to biogas plants, is non-existent and therefore there isno such problem fostered in the installation of the biogas plants in the country as well as much ofthe technological help and incentives are being provided by the PCRET. In addition to this,leaflets, calendars, posters and manuals written in the local language can be effectively utilizedfor creating the awareness regarding the benefits and uses of biogas.Pakistan being agriculture based, breeds sufficient live stock to produce enough animal waste forthe production of biogas. Currently, all such animal waste is burned in the dry form as thedomestic source of energy. The same can be used for producing biogas on commercial bases witheffective utilization of technology. There is quite a potential for using biogas technology as ruralenergy though out the country by network of community biogas plants. 6
  10. 10. 7. “Industry Analysis”Pakistan has one of the world’s fastest growing economies and energy resources developmentwill be essential to increase its ability to sustain the high growth rates through the 1990s.Threecritical characteristics must be considered in analyzing Pakistan’s energy sector. • A complex range of energy resources is available and each plays a different role in meeting the national needs. • The gap between domestic energy supply and demand is widening because of inadequate production, poor transmission and distribution system and inefficient energy use. • Exploiting the energy resources creates the environmental hazards that threaten the long- term development prospects and social welfare.Gaseous fuels like Natural gas; Biogas has been explored as an alternative to petrol and diesel tolighten the import burden. Natural gas in compressed form is already being used successfully asvehicle fuel. Pakistan’s population is growing at a very rapid pace and more than half of thispopulation lives in rural areas, therefore the environmental issues like greenhouse effect andcorrect waste disposal methods as well as providing energy for all the people in rural areas isgaining much attention in the current scenario.7.1 Energy Supply & Demand:-Pakistan’s recent economic acceleration together with rapid rates of population growth is havinga significant impact on the country’s energy supply and demand balances. The current situation inthe Pakistan’s energy sector is that the important energy resources have been depleted andwhatever resources are available are simply too expensive to buy or already acquired by thecountries which had planned and acted long time ago.The current situation in Pakistan is that it is producing 64,000 bbl/d and has ambitious plans toincrease its current output to reach 100,000 bbl/d in 2010. According to Oil and Gas Journal(OGJ), Pakistan had 28.8 million barrels of proven conventional oil reserves as of 1 Jan 2005.Consumption of petroleum products is estimated at 351.4 thousands bbl/d. Today, the primaryenergy supplies are not enough to meet even the present demand. So, Pakistan, like otherdeveloping countries of the region, is facing is facing the serious challenge of energy deficit.There is enough livestock for producing biogas up to 16 million cubic meters a day and it can bevery effectively used as fuel. Sector wise consumption of the Natural gas is given as below:Sector Natural gas consumptionPower Sector 35.4%Fertilizer 23.4%Industrial 18.9%Household 17.6%Commercial 2.8%Cement 2.5% 7
  11. 11. 8.1 Competition:-On the commercial level production of biogas in the country there is no competition at all in themarket. There are some of the biogas production projects already running but they all are on thevery small-scale level. So, Perennial Power Company would not face any kind of directcompetition in the commercial sector. The indirect competition in the energy sector is beingfostered by the other alternative renewable energy resources including natural gas, firewood,wind energy, solar energy, and coal and petroleum products. But due to its cost-effective andenvironment friendly nature, biogas plant at the commercial level is going to have a firm standingin the presence of this indirect competition.8.2 Current Trends:-The following factors are contributing to the sharply rising demand for the conventional energysupplies in Pakistan: • Industrialization. • Urbanization. • Population growth. • Shift in consumer demands towards energy intensive products.8.3 Environment:-The Govt. of Pakistan is attempting to raise the living standards of its citizens and has meant thatthe economical development has largely taken precedence over environmental issues. Uncheckeduse of hazardous chemicals, vehicle emissions and industrial activity has contributed to a numberof environmental and a health hazard; chief among them is water pollution. Much of the countrysuffers from a lack of healthy and clean drinking water due to industrial waste and agriculturalrunoff that contaminates drinking water supplies.The overall impact of the biogas technology in terms of environmental conservation isconsiderably beneficial as the process provides an environmentally sound means of managinganimal and plant wastes. An important advantage of the biogas programme is that it results inconsiderable reduction in fuel wood demand especially in the rural areas. The substitution of fuelwood by biogas leads to three main benefits: • Firstly, it slows down the deforestation trend, thus achieving numerous environmental benefits. • Secondly, it generates less air pollution by the combustion of biogas instead of wood or animal dung. • Finally, we get natural fertilizer (manure) from biogas sludge, which is why biogas offers a safe and clean source of alternate energy.8.4 Availability of Biomass:-Availability of Biomass in Pakistan in 50,000 tons garbage collected in the major cities, millionsof gallons of wastewater, millions of cotton stalks and rice husk etc.It is very economical and 8
  12. 12. friendly way of disposing off the municipal waste that is collected in tons every day in the bigcities but unfortunately no efforts have been made in this particular direction in Pakistan. 9. SWOT ANALYSIS9.1 Strengths:- 9.2 Weaknesses: • Low price • Product rate is low • Environment Friendly • No more outlets • Initiative step for alternative energy • Expensive generators for • Qualified management electricity • Government and Public Support • Special technical staff • No complexities in production of Biogas • Financial constraints • Agriculture support • No harmful material waste • No pollution • Ozone Friendly • Use of Animal Wastage 9
  13. 13. 10.1 Opportunities:- • Being Agrarian country, abundant ingredients for biogas. • Kisan Dost Lease Finance Facility available for the installation of biogas plant. • Less labor than tree felling. • Economically feasible and socially acceptable concept. • Huge potential of around 5 million houses. • Great backup from Biogas Support Program.10.2 Threats:- • Fierce competition with gas grid extensions. • Antibiotics used in the feed of animals can cause difficulties in production. • Forest areas in Pakistan hardly serve as the carbon sink.10.3 Segmentation & targeting:-GEOGRAPHICWorld region South AsiaCountry PakistanCities All major cities of PunjabClimate Humid climateDensity Urban and ruralDEMOGRAPHICAge Applicable in every age groupGender Male, femaleFamily size 1-2,3-4,5 plusFamily life cycle Married, UnmarriedIncome Rs.5000 plusOccupation From lower to upper classRace AsianPSYCHOGRAPHICSocial class Lower class to upper class.Lifestyle Actualizes,fulfilled,believers,achievers,strivers, Experience’s makers and strugglersBEHAVIOURALBenefits Cheap,24/7availability,User status First time userLoyalty status Optimistic
  14. 14. 11.1 POSITIONING:-Transformation of useless wastage into cheap and effective energy…! 1011.2 Slogan:- “Defining the Future”11.3 Service differentiation:Services provided by our specialist consultants are added benefit of buying product from thedistributors…!11.4 Image differentiation:Brand’s innovative name, logo and symbol are its differentiation features.  11.5 4P’s11.6 Product:-Our basic & innovative product bio gas…!11.7 Level of products:-Core Benefits Cheap energyBasic product Bio gasAugmented Product Consultancy and after sales services like replacement of cylindersPotential Product Different sizes of cylinders will be available in future11.8 Price:Presently PPC is following brand pricing. Our per unit price will be 8.05. Our whole promotion isbased upon our price strategy. We have decided to compete by our low price. It will increase ourproduction and sale and ultimately increase our revenues. For Biogas Cylinders and Electricity we have competitive prices. For these two products wehave “cost plus profit margin” model. We will add 25% profit margin in cost of these twoproducts. We will offer Biogas based CNG at 25% less price in relation to LPG prices prevailingin the market. 11.9 Placement:-Placement is important factor; we will use vehicles to deliver the Biogas in Cylinders form to theend consumers. It includes all the company’s activities which make the product available to the 11
  15. 15. market. We will provide Biogas Electricity to WAPDA from our production plant. We willprovide Biogas to nearly located industries through the pipeline.12.1 Promotional Mix:Company is following four tools of promotional mixIt is our goal to spread information “Biogas for better Life” in depth of customer’s mind. Andwe will use different methods: • Banners • Personal Selling • Awareness programs • Events • Radio • Public Relations (Words of Mouth) 12.2 Marketing Strategy12.3 Marketing Objectives:- • Customer value and satisfaction • Creating strong position • Creating strong distribution channel • To achieve better market share • Try to increase growth rate • To provide high quality 12.4 Production Plan Biogas generationBiogas develops through anaerobic fermentation. During this process, organic substances aredecomposed by microorganisms. The substances added to the system produce the biogas in anoxygen-free environment. In the first step, the organic substances are divided into molecularcomponents (sugar, amino acids, glycerin and fatty acids). Microorganisms convert theseintermediate products into hydrogen and carbon dioxide, which are then transformed intomethane and water according to the Equation: CO2 + 4H2 ----> CH4 + 2H2O 12.5 General factors which influence biogas production:The production of biogas is a natural process that functions in suited facilities.The following factors must be considered during biogas production: • Organic substrates must be able to be biologically decomposed by microorganisms. • The substrate should contain only a minimum of microbiological restrictors. 12
  16. 16. • The temperature during the decomposing process must be within a certain range (35° to 55°C).• The pH-value should range from 6 to 8 the fermentation must take place in an area sealed off from air and light.• The fermentation tank must be mixed at regular intervals. BIO GAS Generation Process 13
  17. 17. 14. Management plan14.1 Form of Business:-The form of business is private limited and established under Companies Ordinance 1984. Thereare total seven (7) members in this organization and actively participating in the organizationsactivities.14.2 Identification of the members:-This business is private limited and all the members have contributed equal share of amount. Allthe members have equal shares in the company and are responsible for their respective activitiesas they are performing actively in the organization. The term of membership is on the basis ofequal share of profits & losses and rewards and bonus are on the basis of the achievement in therespective area of responsibility.14.3 Board of Directors:-The members are also the members of the board of director. The board of director is comprised ofone chairman who is selected by the members or board members and THREE board members. 14
  18. 18. 15. `Roles and Responsibilities of the Members:The responsibilities of directors may include:- • Review of operating and capital budget. • Development of network for the efficient working of the organization. • Resolving conflicts among all the managerial and departmental activities. • Ensuring that the assets are in proper and efficient use of their own. • Major task is decision making. DESIGNATION (CHAIRMAN)KEY RESPONSIBITIES:Smooth functioning of whole organizational departments, to overlook complete activitiesof the organization, build long term and short term strategies and policies.Salary: Rs. 70,000/- DESIGNATION (HEAD OF MARKET&CONSULTANCY)KEY RESPONSIBITIES:To handle sales, forecast sales, promotions and handle the service area of company which isconsultancy for other biogas plants.Salary Rs.30, 500/- DESIGNATION (HEAD OF R & D)KEY RESPONSIBITIES:To understand the complexities of the biogas plant, find new better and efficient ways to producegas and electricity, new and better plant designs for the further extension of the plant, to findbetter resources or raw material for quick and more production of biogas, give advices for newproduct introduction according to the better research and results.Salary Rs.45, 950/- DESIGNATION (HEAD OF TECHNICAL FACILITY)KEY RESPONSIBITIES:To see the technicalities of the biogas plant, provide the engineers and technical staff the requiredtype of material and help, technical changes in the biogas plant, interval inspection of the plant.Salary Rs.40, 000/- DESIGNATION (HEAD OF PRDUCTION AND OPERATIONS)KEY RESPONSIBITIES:Provide production facilities, over look the purchases and the raw material conditions; see thedifficulties of distribution channels and the better resource for raw material, handle the activitiesof subordinates, provide them effective advices about the production and operation of thecomplete plant.Salary Rs.15, 000/- DESIGNATION (HEAD OF FINANCE AND CONTROL)KEY RESPONSIBITIES:Look at the financial position, activities and resources of the company, handle the books ofaccounts of the company, perform internal audit and annual external audit of the company, lookat resources from finance is available, give advices according to the financial position to thechairman and the for further strategies of development or product diversification.Salary Rs.30.000/- 15
  19. 19. DESIGNATION (HEAD OF HR MGT.)KEY RESPONSIBITIES:Handle the organizations human resource activities like recruiting, selection, orientation,performance appraisals, motivation, rewards and benefits to the employees, governmentalobligations and regulations about the bio hazard and employees, employee safety and healthissues. Check the balance of the employees in the organization for excessive and under employedworkers.Salary Rs. 20,000/-Key responsibilities of team of R&DIn research and development, technicians usually work in laboratories testing mechanical,electrical, chemical, pneumatic, hydraulic, thermal, or optical scientific principles. Typicalemployers include institutions, private industry, government, and the military. Working under thedirection of an engineer, physicist, and chemist, or metallurgist, technicians use specializedequipment and materials to perform laboratory experiments. They help record data and analyze itusing computers. They may also be responsible for periodic maintenance and repair ofequipment.16.1 REWARD STRUCTURE:-There will be Extrinsic and Intrinsic rewards. 16.1.1Financial Rewards: Conveyance allowance (will be 5% of basic salary) Medical allowance (will be 3% of basic salary) Education allowance for children 16.1.2 Others Rewards:- Promotion Career Development Greater job freedom Participation in Decision making 16.1.3 Working Hours:- 9am to 6pm for Desk job 8.30am to 4.30pm for labor workers Shift 1 4.30pm to 12.30am for labor workers Shift 2 12.30am to 8.30a.m for labor workers Shift 3 16.2 Lunch Hours:- 1.30pm to 2.30pm for all workers 16.3 Leave Schedule:- 2 leaves will be sanctioned to all employees 16.4 Succession Planning:- Out sourcing for lower management level For key position we will consider “REPLACEMENT CHART” 16.5 Training:- On the job training for lower and middle management 16
  20. 20. 17. Financial plan Manufacturing Budget of all Three products for 1st 3 Months Jul Aug Sep 1.Electricity to WAPDA Projected Sales(MW) "1 MW per day" 0 0.8 MW/day 0.8 MW/day Ending inventory 0 0 0 Available for Sale 0 0 0Less: Beginning Inventory 0 0 0 Production Required in Mega Watt 0 0.8 MW/day 0.8 MW/day 2. BIO compressed gas to FactoriesProjected Sales (m3) 0 1425 1430Ending inventory Available for Sale 0 1425 1430Less: Beginning Inventory Production Required 0 1425 1430 3. Bio CNG cylinders Projected Sales(Cylinders) 0 2000 2200
  21. 21. Ending inventory 0 60 50 Available for Sale 0 2060 2250Less: Beginning Inventory 0 50 60Production Required 0 2010 2190 17
  22. 22. 18. Pro Forma Income Statement, Three Year Summary(in millions ) percent Year1 Year2 Year 3 sales 100 79.53 156.63 345.34Less: Cost of goods sold 56.26 44.74 88.81 194.27Gross Profit 43.74 34.79 68.51 151.07Less: OperatingExpenses 5.09 4.05 7.98 17.59Salaries & Wages
  23. 23. Office Supplies 0.19 0.15 0.30 0.65Insurance 1.51 1.20 2.36 5.21Depreciation 1.51 1.49 2.36 5.21 Fuel expenses 3.98 3.16 6.23 13.73 Licensees 0.13 0.10 0.00 0.00 Other 1.51 1.20 2.36 5.21 Total operating expenses 13.91 11.53 21.79 48.04 Profit before tax 29.83 23.44 46.73 103.03 Tax at 35% 10.39 8.20 16.35 36.06 18 Profit after tax 19.39 15.23 30.37 66.97 19.1 Pro forma Balance sheet for 3 years (millions)
  24. 24. 20. “Risk Assessment”20.1 Level of Risks: - 19Perennial Powers Company faces only execution and startup risks; there is no other riskexcept some level of financial and product execution risk. The overall environment isvery helpful for the company operations and its sales. There is no market and productbranding related risk for the company because the company is serving in the necessitiesof life which are going to be extinct in near future so the company has a great scope forits products and services.20.2 Product and Execution Risk:This is the point of concern for the company at the initial level that companiesestimate may be wrong and some major changes have to make for meeting theactual requirements. The gas estimation and generation is important in this wholeprocess of energy generation. The some initial level changes have to make forefficient production. There is no direct competition and risk is attached with the companytechnology.20.3 Financial and control Risk:Company faces the risk of capital arrangement in the start of business. The owners of thecompany committed to the Islamic mode of financing so there is lesser chance toobtain debt financing. The management of the company is inexperienced and some controlrisks are exists. The company is selling to WAPDA so, the major risk is of late payment. 20.4 CONCLUSION:-There is large potential of biogas generation in Pakistan to make it an alternate fuel for vehicle.Biogas produced in large size biogas plants should be enriched before bottling for storage andmobile purpose, as enriched biogas has more calorific value and better fuel quality. Out of severalmethods of biogas enrichment, water scrubbing is found to be a simple, low-cost and suitablemethod for enrichment of biogas in rural areas.
  25. 25. Overall, the study revealed that biogas enrichment and compression system is a profitable venturefor rural areas due to availability of large quantity of cattle dung. The system is recommended toestablish rural entrepreneurship for the effective utilization of local biomass resources forproduction of biogas energy in decentralized manner and sustainable rural development. 20
  26. 26. AppendicesTechnology: Perennial powers focus on the technology that is useful for the efficient production and sales control. The whole process is control through specially design software.
  27. 27. “Certificates required by the Perennial Powers Company” The perennial powers company is looking for the licenses to start the operations of thecompany and for the maintenance of quality and control. The company has applied for new licenses from the below described organizations and National Electricity and Power Regulatory Authority (NEPRA).
  28. 28. Forecasts and Financial AnalysisThe details of forecasts and financial analysis are provided in the part of Financial Plan of thisfeasibility. Generic Value Chain for Biogas