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Executive Business Plan
Confidentiality Notice: This document, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and/or privileged information. If you are not the intended recipient(s), you are hereby notified that any dissemination, unauthorized review, use, disclosure or distribution of this information, and any materials contained in any attachments, is prohibited by law.
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Executive Business Plan
Table of Contents
1. Executive Summary....................................................................................................... 3 1.0 Executive Summary .......................................................................................... 3 The Industry ................................................................................................................ 4 Management ............................................................................................................... 5 Professional and Advisory Support ......................................................................... 5 1.1 Mission ...................................................................................................................... 6 2. Company Summary ....................................................................................................... 7 2.0 Company Summary................................................................................................. 7 2.1 Company Ownership .............................................................................................. 7 2.2 Start-up Summary ................................................................................................... 7 3. Services ........................................................................................................................... 9 3.0 Services..................................................................................................................... 9 The Biodiesel II Production Process ....................................................................... 9 Biodiesel II, LLC Fuel Production & Sales ............................................................. 9 4. Market Analysis Summary .......................................................................................... 10 4.0 Market Analysis Summary ................................................................................... 10 5. Strategy and Implementation Summary ................................................................... 12 5.0 Strategy and Implementation Summary ............................................................ 13 5.1 Competitive Edge .................................................................................................. 13 Our Cost Competitive Edge (prices quoted on Jan 3, 2008 may vary) ........... 16 5.2 Sales Strategy ........................................................................................................ 16 Projected Monthly Sales ......................................................................................... 18 Pricing ........................................................................................................................ 19 Distribution................................................................................................................. 19 6. Personnel ...................................................................................................................... 20 Personnel................................................................................................................... 20 7. Financial Plan ............................................................................................................... 21 7.0 Financial Plan ......................................................................................................... 21 7.1 Break-even Analysis ............................................................................................. 21 7.2 Projected Profit and Loss ..................................................................................... 21
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1. Executive Summary
1.0 Executive Summary Biodiesel II, LLC is an organization of investors located throughout the world with an emphasis on the production of Biodiesel II a non-polluting biofuel additive which minimizes global emissions of CO2. They are dedicated to sustainable development of Biodiesel II using base feedstock oils that can be added to diesel without using the lengthy chemical process of transesterification. The cost for Biodiesel II is less than other biodiesel fuel due to the fact that it is the only “Fuel On Demand” additive. Services Biodiesel II, LLC’s Primary Business Emphasis is to produce Biodiesel II using the proprietary fuel already registered for production by the US Environmental Protection Agency (EPA), and to distribute it throughout the world. Initial construction includes five sites in the Eastern and Midwestern United States. Customers Biodiesel II, LLC initial target markets are of four distinct phased groups. The Phase I Group is the trucking industry of which the manufacturing facilities will be strategically placed along the U.S. truck routes. The Phase II Group are the large biofuel organizations in search of a high yield clean burning biodiesel additive Note that at the same power output, Biodiesel II’s specific consumption and efficiencies are higher than those of other currently marketed biodiesel fuels. The Phase III Group is the independent businesses aiming to increase consumption of clean burning biodiesel in their industrial and manufacturing industries. The Phase IV Group is the Home Heating Industry beginning with the east coast.
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The Industry
The enactment of the recent Energy Bill calls for a 2500% increase of the renewable fuels standard over the 2004 figure of 30 million gallons by 2012.
The use of renewable fuel resources should increase at least 100% to 300% worldwide annually for the next 10 years, particularly as the cost of petroleum remains high. The European Union’s Directive 2003/30/EC “Promotion of the Use of Bio Fuels and Other Renewable Fuels for Transport”, has also set encouraging standards. 2003 total usage of biofuel in Germany rose to 1.4% of total fuel usage. Germany is committed to increasing this percentage to 2% by this year (2009). The heads of state and government concluded in the 2006 review that an increase to 8% for biofuels for 2015 could be added. Feedstock oil of many types may be used to expand all of these percentages.
In addition to the Energy Act and its positive ramifications on the industry, several other important government rulings are spurring the alternative fuels industry into increased production and further development.
Among these are:
The American Jobs Creation Act of 2004 (the Act), Public Law 108-357, made changes affecting fuel tax credits and refunds. The biodiesel mixture credit is 50 cents per gallon of biodiesel, $1.00 per gallon for vegetable oil, 50 cents on waste oil and other credits for distilled grain fuels. It may be noted that these credits are subject to change. Note: Biodiesel II’s proprietary blend has been approved to
receive the $1.00 back credit.
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Management
Biodiesel II, LLC has assembled a strong management team of experts in the areas of: Research through Synovation Laboratories, LLC for the development of Jatropha oil based fuel. Currently we are working with fuel Processing Engineers, Business Development, and Agriculture experts around the globe. Most important to the association is the financial success which will be achieved through strict Good Manufacturing Practices (GMP’s), Financial Planning, Quality Assurance and Project Management controls. Additionally, success will be ensured by offering the highestquality global Biodiesel products. Biodiesel II, LLC does plan to stay market
competitive according to the world-wide demand.
A succession plan has been provided for the continuation of the business in the event of one or all of the management professionals are unavailable to operate the company. A “key man” insurance policy will also be purchased to further protect the company and its investors.
Professional and Advisory Support Professional and Advisory support is available from a network of professionals that have come together to promote, plan and direct the success of Biodiesel II, LLC. These individuals represent the energy and biofuels industries and have a common vision for global production of Biodiesel II.
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1.1 Mission Biodiesel II, LLC is a limited liability corporation dedicated to producing proprietary blended biodiesel fuel used in combination with oil produced from currently marketed vegetable, or other feedstock oil. The corporation wants a fair and rewarding work work atmosphere for all its world-wide employees while contributing to
environmental consciousness. “A society is defined not only by what it creates, but by what it refuses to destroy.”
John Sawhill former president of The Nature Conservancy
Current research has been completed for the introduction of low emission jet fuel and EPA testing has been pursued and will continue with company expansion. Investors are welcome to join us in our newest research endeavor.
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2. Company Summary
2.0 Company Summary Biodiesel II, LLC is a multi-faceted corporation dedicated to producing earth friendly fuel from a proprietary blend of feedstock oil and EPA approved proprietary formula to produce Biodiesel II. The main office is located in Ireland and the US. Processing facilities are portable with local offices located near trucking routes. 2.1 Company Ownership The company will begin as a corporation, positioned for further growth through capital funding from investors. Please contact the organization for further discussion and information. 2.2 Start-up Summary The founders of the company are a group of entrepreneurs and investors with a vision of producing the cleanest biodiesel possible, (Green Fuel – Clean World). Biodiesel II, LLC is securing offices in the USA and intends to turn a profit before the end of year one by targeting the trucking industry for spring 2009. Year one Biodiesel II, LLC will add their proprietary formula to feedstock oil (degummed soybean per market pricing to begin then a proprietary feedstock oil) as a primary base and then combined with diesel fuel. By year two further proprietary oils may be substituted such as Jatropha oil in alliance with the Jatropha International, LLC for the non-profit world-wide farming organization of Jatropha International Growers Association.
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“Green Fuel – Clean World”
Jatropha World Photo
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3. Services
3.0 Services The Biodiesel II Production Process
The proprietary blend of Biodiesel II (additive) will be combined and processed at the manufacturing facility in one of three ways: 1. An empty tankard will be filled with Biodiesel II complete blend at the manufacturing facility and taken to the terminal site. The buyer will then blend Biodiesel II with diesel at the calculated percentages. 2. A calculated portion of the proprietary blend will be placed in a tanker truck. The truck will then proceed to the local terminal site and fill the remainder of its volume with diesel. It will then continue on to its site of distribution. 3. An empty tankard will be filled with Biodiesel II complete blend at the manufacturing facility and distributed to the service stations. The buyer will then blend Biodiesel II with their current diesel at the calculated percentages. Biodiesel II, LLC Fuel Production & Sales Marketing and Sales will be set in place for the sale of Biodiesel II markets prior to Month 3. Initial production of the completed Biodiesel II mixture will take place at the manufacturing facility using the proprietary Biodiesel II process then distributed for order fulfillment. Currently degummed soybean oil will be used as a base (since Biodiesel II can be used with almost any base oil) in this process and ultimately expanding to alternative fuel oils such as proprietary oil or Jatropha oil as previously noted. Further organizational alliances have been made with Jatropha International, LLC and Jatropha International Growers Association for the purchase of Jatropha oil.
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4. Market Analysis Summary
4.0 Market Analysis Summary Biodiesel II, LLC has expertise in the arena of the world fuel development. Currently, an alliance has been formed with Synovation Laboratories R&D and Jatropha International, LLC for the purpose of researching and purchasing of Jatropha oil. All three organizations share a feeling of being a part of Green Fuel – Clean World as well as their economic worth. Although Biodiesel II crews will have various locations, the sense of team will be stressed and overseen. Biodiesel II, LLC does plan to raise prices on the open market as warrants the demand. Important ecological changes are taking place in the world today that point to the importance of environmental consciousness.
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Biodiesel VS Biodiesel II Glycerin question:
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5. Strategy and Implementation Summary
Biodiesel II plans on utilizing all resources possible to increase profits.
Section 1101(a)(5) of the SAFETEA-LU authorizes a total of $1,694,101,866 in contract authority for the Congestion Mitigation and Air Quality Improvement Program for FY 2006. www.dot.gov
The Clean Fuels Grant assists transit agencies in constructing alternative fuel stations and assisting in the utilization of biodiesel fuel. www.dot.gov
The Clean Fuel Fleet Program (CFFP) is an initiative implemented by the EPA requiring fleets in cities with significant air quality problems to incorporate vehicles that will meet clean fuel emissions standards. The program is fuel-neutral and requires all vehicles to achieve the Low Emissions Vehicle (LEV) emissions rating and applies to vehicles with a loaded weight up to 26,000 lbs.
www.epa.gov/otaq/cff.htm.
The Clean School Bus USA program is offering $7 million in cost-shared grants to help school districts upgrade their diesel fleets. It is reducing operating costs and children’s exposure to harmful diesel exhaust by encouraging school districts to switch to biodiesel. www.epa.gov/cleanschoolbus/index.htm.
The Air Pollution Control Program known as Section 105 has current projects that emphasize alternative fuels. State, local, and tribal governments may receive up to 60% federal funds to implement their plans. www.epa.gov/OTAQ/rfp.htm,
With government encouragement to switch to alternative fuels at a historically high level of financial and legislative involvement, the market for Biodiesel II products and services will be expanding to previously unheard of levels. Confidential, Biodiesel II 8/5/2009, gcw:V-1.5 Page 12 of 21
Additionally many states are now passing similar programs to augment the federal acts and programs.
With government encouragement to switch to alternative fuels at a historically high level of financial and legislative involvement, the market for Biodiesel II products and services will be expanding to previously unheard levels.
Additionally many states are now passing similar programs to augment the federal acts and programs. . The patents and proprietary formulas on fuels, and the ability to deliver fuels to the end user, are only two of Biodiesel II’s major strengths. The creative ability and experience of its core team, Biodiesel II, LLC is located in Ireland and centrally located in the heart of the Midwestern United States with access to major fuel industries throughout the Central U.S., Canada and Mexico.
5.0 Strategy and Implementation Summary The company strategy is simple, Biodiesel II, LLC intends to succeed by initially marketing Biodiesel II to the trucking industry. Other industries will follow. Research & Development through Synovation Laboratories will continue in the arena of jet fuel with potential sales of the fuel to airlines and alternative oil crops. 5.1 Competitive Edge The Product’s competitive edge is the proprietary EPA tested and approved product that exceeds any other biofuel without using the chemical process of transesterification. Note that this is a huge cost savings for the initial manufacturing facility development and with daily fuel processing.
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Biodiesel II surpasses the current biodiesel on today’s market in all areas noted in the Glycerin Index.
WHY BIODIESEL II INSTEAD OF REGULAR BIODIESEL???
Emissions (Regulated)
10% 0% -10% -20% -30% -40% -50% -60% -70% -80%
NOx (Nitrogen Oxide emission) Carbon Monoxide Total unburned hydrocarbons Particulate Matter
-90%
Biodiesel IITM * BiodieselTM * Biodiesel 20%
* Average range estimation * EPA Published Results
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Emissions (Non-Regulated)
0% -10% -20% -30% -40% -50% -60% -70% -80% -90% -100%
PAH (Polycyclic Aromatic Hydrocarbons)
nPAH (nitrated PAH's)
Sulfates
Ozone
Biodiesel IITM * BiodieselTM * Biodiesel 20%
Average range estimation * EPA Published Results
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Our Cost Competitive Edge (prices quoted on Jan 3, 2008 may vary)
Note that Biodiesel II spoilage.
TM
has no need for the fermentation process and to date has shown no signs of
5.2 Sales Strategy Sales & Marketing will include: internet advertising, television, and public relations, targeted to promote the company products. The media is curious about the company’s products due to the recent increase in biodiesel production. The
passage of the Energy Act, and drastic increase in soybean prices make our product cost production and performance superior since Biodiesel II only needs degummed oil not processed oil (unlike other biodiesel products) . The credentials of the
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company principals are attractive to the media as they have become experts on the subject of alternative fuels. Articles related to the company’s products and projects will also be submitted to various Technical and Trade journals.
Membership in various trade associations will also provide marketing opportunities.
Sales efforts include utilization of commissioned sales agents and other out-sourced workforce. The Biodiesel II sales force will contact accounts with fleets over 50 vehicles, leads will come from seminars, tradeshows, website, and media interviews by the principals. Various contracts will require a bidding process. Independent agents will also be utilized on a commission basis for direct sales to gas stations for adding directly into their diesel tanks (according to appropriate ratio measurements on site). This may lower the cost of diesel directly to the consumer. Note that currently contracts are pending for distribution. . A Biodiesel II website provides company and product knowledge to prospective customers. It is designed to be an informational site for those seeking general information on the industry and specific information of Biodiesel II. Potential
customers may contact a sales representative through the website. Established customers will be able to order product, schedule delivery, and view their own account and billing information on line through use of a password protected connection. www.BIODIESELII.com
A database of both current and potential customers will be created and maintained. This database will serve as documentation and may be accessed to check and verify sales efforts. It will provide a history for any sales representative assigned to the account as well as statistics for future marketing analysis.
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Projected Monthly Sales
Projected Sales/Profits
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Pricing
Biodiesel II prices are set using commodity futures to secure long-term pricing at cost plus premium of 22%. Fluctuations in the cost of raw materials can be mitigated by hedging in the commodities market. Price projection will be at or below the competition depending upon the volumes purchased. Large accounts may receive volume discounts. NOTE: Due to the proprietary bond, Biodiesel II can use many different types of base oils as dictated by the fluctuating market for cost conservation.
Freight will be paid by the buyer and calculated in the pricing of the fuel.
Distribution
A fleet of tractors and tanker trailers will be leased as necessary for product delivery. Biodiesel II, LLC’s processing facilities will be centrally located with railway access facilitates or other transportation in mind. The use of railway tankers for large
volume customers is also being taken into consideration.
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6. Personnel
Personnel The company’s team approach to the working environment, coupled with training and individual education subsidies, competitive pay and benefits, production and sales milestone rewards, stock options, restricted stock grants, and a safe and productive work environment will reduce the rate of turnover to a position far below the national average. Biodiesel II, LLC intends to set the standard for other companies to follow, not just in its product and service innovations, but also in its attitude toward its other most valuable assets, the employees of Biodiesel II, LLC.
Employment recruiters, local universities, and web advertisements will be used to find job applicants. Care will be taken to ensure that the applicant is not only qualified and able to perform the duties that will be assigned to him/her, but that the individual’s presence and demeanor will be an asset to the company.
All EPA and other regulatory standards will be met by Biodiesel II, and the company will comply with all Federal, State and Local employment regulations. When
possible Biodiesel II will participate in government sponsored training programs and will take part in any appropriate wage rebate and related tax credit programs.
Types of employees include management, legal, sales, finance, accounting and administrative, technical specialists, researchers, chemists, diesel mechanics, drivers, warehouse laborers and farmers.
New hire processing will include appropriate orientation to the company policies and procedures. Training and ongoing monthly professional development will be
provided. Schedules, written policies, procedures and job descriptions are being prepared.
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7. Financial Plan
7.0 Financial Plan Biodiesel II, LLC is expecting to raise a minimum of $50,000,000 of capital and provide shares of Biodiesel II, LLC to its investors. Further information may be requested. 7.1 Break-even Analysis The company’s break-even analysis is based on the average of the first-year numbers for total cost of sales, and all operating expenses. These are presented as per-unit cost, and fixed costs. Although it’s not really the same as fixed cost, these conservative assumptions make for a better estimate of true risk. 7.2 Projected Profit and Loss Biodiesel II has the potential to be financially prosperous because the manufacturing cost is less than other biodiesels and ethanol which is reflected in the consumer pricing. Further information may be requested at BiodieselII@USA.com
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