Tender Specification: Business Plan For The Creation Of A Regional Oilseed Rape Crushing Operation In North East England Tender Reference: Date: Biofuels Strategy/Crusher Business Plan/01 September 2009
NEPIC North East Process Industries Cluster The Wilton Centre Room H224 Wilton Redcar Cleveland United Kingdom TS10 4RF
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CONTENTS Section 1 2 3 4 5 6 7 8 9 10 11 12 Introduction Background Specification of Requirements Outputs Required Project Team Contract Management Requirements Quality Assurance Page 3 4 5 6 6 and Contract 6 6
Payment Arrangements and Contract 7 Price Tender Submissions 7 Award Criteria Queries Tender Return 8 8 8
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1. 1.1
INTRODUCTION The Invitation to Tender
The Contracting Authority for the purpose of this Invitation to Tender is NEPIC, the North East Process Industries Cluster. NEPIC’s office is H224 Wilton Centre, Wilton, Redcar, Cleveland, TS10 4RF. NEPIC has been commissioned by One North East, the Regional Development Agency for the North East of England, to deliver the Regional Strategy for Transport Biofuels. NEPIC will deliver this work in partnership with North East Biofuels, the regional biofuels cluster organisation. This piece of work will help biofuels market development and manufacturing in the region by: Producing a detailed analysis of the business opportunity that an oilseed rape crushing operation can present to the local agricultural community,to biofuel/oil producers and to the animal feed sector. The business plan, should also include estimates of the likely returns. The work will include researching the market potential for an oilseed rape crushing operation in the North East Examining the availability of oilseed rape in the North East and UK, and subsequent supply of oil into regional biofuel supply chains together with rapemeal/cake into regional animal feed supply chains Develop a greater understanding of the complete supply chains involved down to biofuel marketing. The work sets out to demonstrate leadership in biofuel manufacture and use by the North East region, through developing a detailed understanding of the business opportunity that a 500K tonne per annum oilseed rape crushing operation presents. It is intended that this leadership will attract industrial investment. 1.2 NEPIC
Process industries make a massive contribution to the national economy, and that picture is mirrored in the North East of England. Producing 58% of the UK’s petrochemical output and almost a third of its pharmaceutical production, the region is home to some of the world’s leading companies. Growing year on year, the sector is represented by the North East Process Industry Cluster (NEPIC) and with a gross domestic product nearing £8bn, the process industry also accounts for a sizeable proportion of the region’s economy. As the region’s development agency, One North East attaches high importance to the on-going development of the North East process industries
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and the Regional Economic Strategy (RES) highlights the sector as a key driver of the regional economy over the next decade and beyond. The biofuels sector is a growing area of the process sector in the North East, and a powerful coalition of business interests has put its weight behind the North East Biofuels Industry. The Regional Development Agency, One North East, has pledged £1.7million over a 3 year period commencing April 2008 to potentially attract global producers to invest in sustainable production in North East England. 1.3 Strategy Background
The Regional Strategy for Transport Biofuels seeks to develop the region’s biofuels industry through the implementation of activities in a number of fields identified as crucial to the successful achievement of the Strategy’s vision of the North East as an international hub for biofuels. These fields are: o Leadership o Technology Development o Finance and Business Support o Marketing o Communication and Networking Since April 2008, NEPIC have been working as the deliverers of a £1.7million project to ensure the successful implementation of the recommendations of the Strategy. NEPIC will be doing this in conjunction with North East Biofuels, the region’s cluster group for biofuels development. NEPIC and North East Biofuels are working under the auspices of a Regional Strategy Board, which advises on strategic direction and project implementation to realise the vision of the Strategy. This project forms part of this vision. 2. BACKGROUND
In December 2008 the European Union approved an Energy and Climate Package which commits the region to achieve a legally binding target of 20% renewable energy by 2020, alongside targets to cut greenhouse gas emissions by 20% and improve energy efficiency by 20% over the same period. The new Renewable Directive – a key part of the package – includes a sub target to achieve a minimum of 10% renewable energy in transport by 2020. In practice from April 2008, within the UK, the Renewable Transport Fuel Obligation (RTFO) requires the renewable content of transport fuels to be 2.5 percent but which will rise over time and in line with UK and European targets. The Renewable Energy Directive sets legally binding targets for each member state; the renewable energy target for the UK is to increase to 15% in 2020. Within this target each member state must achieve a minimum share of 10%
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renewable energy in transport. This target will be met largely through biofuels. The development of the business plan will support the development of a North East based biofuel industry and meet UK targets. 3. 3.1 SPECIFICATION OF REQUIREMENTS Objectives
North East England has a substantial developing biofuel manufacturing sector but it is recognised that a world scale oilseed rape crushing operation would both compliment biofuel manufacturing in the NE region but also provide a number of regional benefits. The objective of this work is to develop a comprehensive business plan which provides potential and likely investors a broad understanding of the opportunities for profit, the scale of investment and what options exist for its operation and integration with existing North East businesses. The plan, by setting out the market potential and supply chain development opportunity will demonstrate how the region is attractive to investors. NEPIC and the Regional Strategy Board envisage significant regional benefit arising and the plan will need to include specific job and business creation opportunities. 3.2 Detailed requirements
Tender submissions will need to include work to o Produce a detailed business plan and business model including suggested ownership structures o Identify potential investors, and produce projected returns on investment o Identify project partners in Engineering Procurement Construction (EPC), seed supply, and fuel offtake o Identify and quantify raw material inputs, volumes and projected sales o Model pricing of above to demonstrate sensitivities to the market o Identify number of jobs associated with the operation o Identify public support requirements o Project Management
3.3
Deliverables
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The project will need to deliver, as a minimum: o A comprehensive and detailed business plan and financial model representative of a 500K tonne per annum oilseed rape crushing operation. This needs to include as a minimum, annual turnover, return on investment, gross profit, direct jobs associated and timescales. A report on the supply chain for oilseed rape feedstock, resulting oil from the crush and rapemeal/cake. The financial benefits or revenues associated with the supply of oilseed rape feedstock, production of oil and rapemeal/cake. Potential partners for the development Contract term
o o o 3.4
The anticipated term for the contract of this project is 3 months. Dependent upon results and the potential for regional benefits, an option for extension to complete further work may be agreed, conditional upon the successful completion of the key deliverables. 4. OUTPUTS REQUIRED 1. 2. 3. 4. 5. 6. 5. Monthly report to project team Draft supply chain analysis Draft business plan Final supply chain analysis Final business plan Presentation to project sponsors
PROJECT TEAM
The NEPIC project team responsible for this work are John Brady, Senior Project Manager, Biofuels and Mark Lewis, Technical Manager. 6. CONTRACT MANAGEMENT AND CONTRACT REQUIREMENTS
NEPIC standard Terms and Conditions will apply to the successful tenderer(s); a copy of which is available upon request. Special terms may come into force as the contract is negotiated. 7. QUALITY ASSURANCE
Tenderer’s should describe their procedures for quality assuring their work stating whether they hold a recognised quality management certification for example BS/EN/ISO9000 or have an equivalent quality assurance/management system in place.
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8.
PAYMENT ARRANGEMENTS AND CONTRACT PRICE
Tenderer’s should quote for the completion of this work in full (VAT and expenses requirements which should be identified separately). Payment to account will be made in accordance with NEPIC’s General Terms and Conditions of Contract for Services. It is envisaged that this contract value will not exceed £75K. 9. TENDER SUBMISSIONS
Tenderer’s should provide details within their tender proposals of: • • Each deliverable which will be managed (refer to objectives) The individuals who will be responsible for implementing each stage of work and the estimated number of hours this will require How their model for delivery will meet the outcomes and demonstrate added value by stage to the outcome of the contract; Full cost breakdown of their proposal. This should include details of the numbers and status of staff involved, their time and associated costs. VAT and expenses should be identified separately;
Tenders will be evaluated against the award criteria as set out at clause 10 and tenderers should also demonstrate within their tender proposal their: • • • • • Capability to meet the contract requirements; Quality and experience of the team delivering the contract; including evidence of a proven track-record; Ability and flexibility to deliver the study to the agreed timescales; Experience of working within the energy biofuels sector, which identifies their ability to deliver these services to a high standard; Value for money and added value
The successful candidate will be required to show: • • • Evidence of expertise and prior work in this area Knowledge of compiling and delivering business plans and financial modelling Knowledge and detail of supply chains involved
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10.
AWARD CRITERIA
The contract will be awarded to the most economically advantageous tender evaluated against the following criteria. Weighting % 15 30
Criteria Price, including added value Quality and Suitability of proposal including the way in which they address and indicate the way in which they will meet the Specification Requirements. Proven experience of providing relevant services particularly, but not limited to contracts of a like size and nature. Technical and Expert knowledge Quality of personnel including, amongst other things personal experience and relevant educational and vocational qualifications. 11. QUERIES
25
30
To ensure a fair and transparent tender process no approach of any kind in connection with this tender should be made to any other person within, or associated with, NEPIC. Failure to comply may result in disqualification from the process. 12. TENDER RETURN
The completed Tender and associated documents must be submitted to the NEPIC office detailed under 1.1. Closing date for tenders is Wednesday September 23 2009.
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