The Business Plan Of BD Biodiesel Project

“If we don’t change direction soon, we’ll end up where we’re heading.”, a recentlywarning has given by International Energy Agency. The topic human need to face is how tomake the energy resources beneficial for mankind rather than the damage of the earth. Withthe rapid growth of economic in the New economies, the global consumption of energy isincreasing constantly. Nowadays, human rely on nonrenewable fossil energy, such as fossil oil,coal, natural gas, etc. The exploitation, refining and use of these fossil energy causes seriousdamage of ecology and environmental pollution, and make the living environment of humanand other creatures deteriorating. In addition, the resources of traditional fossil energy arelimited, and become exhausting as the exploitation constantly growing. This factor forces usto seek and develop clean renewable energy such as the new energy: solar, wind, biomass, etc.Based on the factor that LH Co is a traditional energy supplier in Hong Kong, it has highlocal market share, and expansion from local to overseas and investment of new energyprojects are the strategy of the company. The BD project is a renewable energy project whichaims to recycle waste into treasure, as it dedicates to recycle waste cooking oils and sewageinto clean biodiesel. The technical research of the project has been carried out, as well as thepilotscale experiment has also been successfully passed, and investment will be made to buildup the refinery. BD project meets the development strategy of LH Co, and allowing thecompany to expand the sector from the traditional energy to the new energy. LH Co has beeninvolved in the preparatory work of the BD project. This business plan aims to provide acomplete project information as a basis for the LH Co investment decisions and for potentiallenders through planning and research the investment and construction of BD project.This business plan firstly elaborated the fundamental state of LH Company and thesituation of BD project, then analyzed industry policy, the status of economic, social andtechnological development, etc. Five Forces Model and SWOT method have been used inorder to analyze the market competition status of the project, the external opportunities andthreats the project faces, as well as internal strengths and weakness. The analysis indicatesthat the BD project have good market opportunities, location advantages, policy advantages,technological advantages and shareholder advantages. Even though the project faces thethreats from newcomer and feedstock, as well as the weakness of lack of managementcapacity, the effect is limited. Next the future operation and management have been plannedand designed, then marketing strategies have been made.The plan have also measured the economic barometers for the project and prepared a detailed financial statement. According to the analysis of financial statement, the projectstarted making profits in the second year. As the NPV for this project reaches84,966,600HKD with4.41years dynamic investment pay-back period and46.7%IRR, the project hashigh return of investment with a short pay-back period. Finally, the analysis indicates that themanagement and market risks, as the main risks of the project, are tolerable and controllable.Through the results of above analysis may conclude that, the project matches the trend of newenergy development with feasible technic, good financial index, risk tolerable, and has gooddevelopment prospects.