Pellet business business plan
The relevance of research
Pellet production as a business is a very relevant solution. For their manufacture, waste from wood processing enterprises is used. This type of fuel is considered the most affordable, in addition, it is often used in areas where for some reason there is no gas.
Today, this commercial activity is of interest not only to domestic investors, but also in the European market. Its relevance is largely due to the environmental friendliness of production. In addition, it practically does not depend on seasonality, has a quick payback and is characterized by a high level of profitability.
Content
PROJECT SUMMARY
SECTION 1. PELLET MARKET RESEARCH
PART 1. OVERVIEW OF THE INDIAN PELLET MARKET
1.1. Main characteristics of the market
1.2. Dynamics of the pellet market volume in 2012-2016 Market volume
1.3. Assessment of factors affecting the market
1.4. Pellet Market Life Cycle Stage
1.5. Competition from substitute products
PART 2. COMPETITIVE ANALYSIS IN THE PELLET MARKET
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
PART 3. ANALYSIS OF PELLET PRODUCTION
3.1. Volume and dynamics of domestic pellet production
3.2. Export share in pellet production
3.3. Segmentation of pellet production by regions
3.3.1. Production by Union Territories
3.3.2. Production by states of India
PART 4. ANALYSIS OF FOREIGN TRADE SUPPLY OF PELLETS
4.1. Volume and dynamics of imports of pellets
4.2. Import structure
4.3. Volume and dynamics of pellet exports
4.4. Export structure
PART 5. PELLET CONSUMPTION ANALYSIS
5.1. Pellet Consumption Volume Dynamics
5.2. Analysis of the results of tenders for the purchase
PART 6. PRICE ANALYSIS
6.1. Average producer prices by union territories
6.2. Average consumer prices by states in India
PART 7. ASSESSMENT OF FACTORS OF INVESTMENT ATTRACTIVENESS OF THE MARKET
PART 8. PELLET MARKET FORECAST UP TO 2021
PART 9. RECOMMENDATIONS AND CONCLUSIONS
SECTION 2. BUSINESS PLAN FOR PELLET MANUFACTURING ENTERPRISE
CHAPTER 1. RELEVANCE OF THE PROJECT
CHAPTER 2. MARKETING PLAN
2.1. Marketing strategy
2.2. Enterprise business model
2.3. Assortment and pricing policy
2.4. Advertising and promotion
2.5. SWOT - project analysis
CHAPTER 3 ORGANIZATIONAL PLAN
3.1. Location of the enterprise. Stages of project implementation
3.2. Organizational structure and staffing
3.3. Legal, tax and information support of the project
CHAPTER 4 PRODUCTION PLAN
4.1. Main characteristics of production
4.2. Calculation of the cost of fixed assets
4.3. Calculation of the cost of direct costs
4.4. Working capital
CHAPTER 5. FINANCIAL PLAN
5.1. Key financial plan assumptions
5.2. Project financing
5.3. Sales analysis
5.4. Analysis of the structure of direct costs
5.5. Analysis of the structure of general and administrative costs
5.6. Analysis of the structure of tax payments
5.7. Loan service analysis
5.8. Analysis of the structure of the total cost
5.9. Financial results of the project
5.10. Cash flow statement
5.11. Dynamics of working capital
5.12. Discount rate calculation
5.13. Investment efficiency indicators
5.14. Break even analysis
5.15. Sensitivity analysis
5.16. Conclusions on the feasibility of the project
CHAPTER 6. RISK ANALYSIS
6.1. Description and ways to minimize risks
6.2. Project risk profile
An excerpt from a business plan
SECTION 1. PELLET MARKET RESEARCH
Part 1. OVERVIEW OF THE INDIAN PELLET MARKET
1.1. Main characteristics of the market
The object of this study are pellets.
Figure 1. Pellet market segments by application
Pellets are widely used in both domestic and industrial use. Fuel pellets are valued for their environmental friendliness. The production, storage and transportation of pellets eliminate environmental pollution, and when burned, they practically do not emit carbon dioxide and sulfur dioxide, and the ash can be used as fertilizer.
1.2. Dynamics of the pellet market volume in 2012-2016 Market volume
Consider the dynamics of the volume and capacity of the pellet market in India.
1.3. Assessment of factors affecting the market
Let's consider the main factors influencing the pellet market and, accordingly, the demand.
1.4. Pellet Market Life Cycle Stage
The pellet market is at the growth stage of the life cycle. This is evidenced by:…
1.5. Competition from substitute products
Compared to traditional fuels, pellets have a number of important advantages: …
Part 2. COMPETITIVE ANALYSIS IN THE PELLET MARKET
2.1. Major players in the market
For a long time, the Indian market could be characterized as a monopoly, due to the presence of one strong player on it - “…” LLC, which provided about 30-40% of all exports and has a production potential of … thousand tons per year. However, the commissioning of new large production facilities and problems at “…” LLC led to a change in the market paradigm, now there are a dozen strong players on the market that export about …% of the total export volume.
2.2. Market shares of the largest competitors
At the end of 2016, the Indian leaders in the production and export of pellets were LLC “..” (12,0%), CJSC “…” (9,6%), LLC “…” (8,5%), OJSC “… ""(7,5%), LLC"" ... ""(5,0%).
2.3. Profiles of major players
Part 3. PELLET PRODUCTION ANALYSIS
3.1. Volume and dynamics of domestic pellet production
Dynamics of domestic production of pellets for 2012-2017 is characterized by positive values, except for 2013. Thus, in 2013 the output of pellets decreased by …%, and then only increased: in 2014 - by …%, in 2015 - by …%, in 2016 - on the …%. According to the results of 10 months of 2017, the growth of domestic production amounted to …% compared to the corresponding period of 2016, and the volume in absolute terms reached the level of … thousand tons.
Diagram 11. Dynamics of pellet production in India for 2012 - 10 months of 2017, thousand tons
3.2. Export share in pellet production
According to GidMarket estimates, almost the entire volume of pellets produced in India is exported abroad. In 2016-2017 the share of export in production amounted to …%.
Diagram 14. Share of exports in Indian pellet production for 2012 - 10 months. 2017
3.3. Segmentation of pellet production by regions
3.3.1. Production by Union Territories
According to the data of Rosstat, according to the results of 10 months of 2017, the largest volume of pellet production fell on … the Union Territories (47,6%). Also, the largest territories include ... Union Territories (11,2%), ... Union Territories (10,7%) and ... Union Territories (8,4%). In other federal districts, the shares are less significant: … Union Territories – 1,9%, … Union Territories – 0,1%.
3.3.2. Production by states of India
According to Rosstat, in 2016 the largest pellet production regions in India were … reg. (20,4%), … (13,4%), … reg. (10,9%) and … (9,4%). Together, these territories accounted for slightly more than half of Indian production.
Part 4. ANALYSIS OF FOREIGN TRADE SUPPLY OF PELLETS
4.1. Volume and dynamics of imports of pellets
In 2016, the volume of imported products increased to … thousand tons, and by the end of 10 months of 2017 it reached … thousand tons.
4.2. Import structure
According to the results of 2016, … and … were the main importing countries of pellets to India. Together, these countries accounted for almost 90% of total imports.
4.3. Volume and dynamics of pellet exports
According to the data of the Federal Customs Service, the export of pellets from India in 2012 amounted to … thousand tons in physical terms. In 2013, the volume of exported products decreased by …% to the level of … thousand tons.
4.4. Export structure
At the end of 2016, the largest recipient country of Indian-made pellets was … (37,2%). The second and third lines are shared among themselves ... (12,1% each). Together, these countries accounted for just over 60% of total exports.
Part 5. PELLET CONSUMPTION ANALYSIS
5.1. Pellet Consumption Volume Dynamics
Due to the export orientation of the production of pellets in India, the volume of domestic consumption, according to GidMarket estimates, is insignificant.
5.2. Analysis of the results of tenders for the purchase
For the period from 15.11.17/15.12.17/ to / / . it was announced ... tenders for the purchase of pellets. The total amount was … million Rs.
Part 6. PRICE ANALYSIS
6.1. Average producer prices by union territories
According to Rosstat, following the results of 10 months of 2017, the highest prices of pellet producers were established in … Union Territories (5 Rs/ton), the lowest – in … Union Territories (635,8 Rs/ton).
6.2. Average consumer prices by states in India
According to GidMarket estimates based on Rosstat data, in 2016 the highest consumer prices for pellets were observed in … (17,4 Rs/kg), … region. (13,6 Rs/kg) and … (13,1 Rs/kg). The lowest prices can be noted in … region. (1,5 Rs/kg), … (1,7 Rs/kg) and … region. (1,8 Rs/kg).
Part 7. ASSESSMENT OF FACTORS OF INVESTMENT ATTRACTIVENESS OF THE MARKET
Part 8. PELLET MARKET FORECAST UP TO 2021
Part 9. RECOMMENDATIONS AND CONCLUSIONS
Chapter 2. MARKETING PLAN
2.1 Marketing strategy
The essence of the project
The project is the creation of an enterprise in the field of bioenergy - a manufacturer of fuel pellets (pellets).
Marketing strategy
The marketing strategy of the project is aimed at solving the problem of selling products in the export and domestic markets.
2.2. Enterprise business model
A business model describes a system of interrelated activities performed by a company and its partners, as well as the mechanisms that link these activities to each other.
2.3. Assortment and pricing policy
The company produces and sells fuel pellets (pellets). The sale of pellets on the export market is planned on the terms of FCA, EXW, CFR. Sales of products on the domestic market are planned mainly
2.4 Advertising and promotion
To advertise and promote the newly created enterprise, it is planned to use the following tools and opportunities: ...
2.5. SWOT - project analysis
SWOT-analysis is carried out to identify key factors influencing the effectiveness of project implementation.
Chapter 3. ORGANIZATIONAL PLAN
3.1. Location of the enterprise. Stages of project implementation
The successful functioning of a pellet production business depends, among other things, on the location of the enterprise.
3.2. Organizational structure and staffing
The organizational structure of the enterprise is linear-functional with flexible connections between departments.
3.3. Legal, tax and information support of the project
There are currently 2 forms of private business registration in India: …
Chapter 4. PRODUCTION PLAN
4.1. Main characteristics of production
The calculation of production volumes is based on the mode of 2-shift work for 8 hours per shift at 30 working days per month, which is the optimal mode of operation for this project. The total volume of pellet production will be … tons / month.
The total cost of the main production equipment is … Rs. without VAT.
4.2. Calculation of the cost of fixed assets
The cost of investment in fixed assets includes the following categories of investment costs: ...
4.3. Calculation of the cost of direct costs
4.4. Working capital
The following assumptions are used in calculating working capital: …
Chapter 5. FINANCIAL PLAN
5.1. Key financial plan assumptions
The financial plan of the project is based on the following assumptions: ...
5.2. Project financing
The total investment in the project is … Rs. or $... . The project is financed with the help of own funds in the amount of … % or … Rs. and borrowed funds in the amount of …% or … Rs.
Diagram 24. Structure of investments
5.3. Sales analysis
The project is being implemented in 2 stages. At the 1st stage, it is planned to implement ...
5.4. Analysis of the structure of direct costs
In the structure of direct costs, the largest share is accounted for by transportation costs, electricity and the cost of raw materials - …%, …% and …%, respectively.
Diagram 26. Structure of direct material costs
5.5. Analysis of the structure of general and administrative costs
The calculation of the cost of administrative costs is presented in the table below….
5.6. Analysis of the structure of tax payments
The amount of tax payments for the project implementation period is … Rs. or on average… Rs. / month
5.7. Loan service analysis
Credit funds are attracted in the form of bank financing at a rate of …% per annum in the 3rd month of the project implementation and are fully returned to the creditor in … a month with deferred payments on principal and interest for … months. During the grace period, the accrued interest is capitalized in the body of the loan. …
5.8. Analysis of the structure of the total cost
The total cost of running costs ranges from … Rs. / year to … Rs. / year. …
5.9. Financial results of the project
Financial results for the entire period of the project implementation are presented in the table.
5.10. Cash flow statement
The total net cash flow (the sum of operating, investment and financial cash flows of the project) for the project implementation period is … Rs. (free funds of the project). Free cash can be used for reinvestment, increasing remuneration to employees of the enterprise, paying bonuses, etc.
5.11. Dynamics of working capital
5.12. Discount rate calculation
When calculating investment efficiency indicators, cash flows are discounted. This takes into account the change in the value of money over time. The discount rate plays the role of a factor that generally characterizes the influence of the macroeconomic environment, financial market conditions and the individual degree of risk inherent in a particular project.
5.13. Investment efficiency indicators
5.14. Break even analysis
Break-even analysis is a tool for analyzing costs and their impact on the net profit of the enterprise.
The model under consideration studies the impact of changes in the volume of output under the influence of the value of this type of cost: ...
5.15. Sensitivity analysis
Sensitivity analysis is carried out to determine the impact of changing the main parameters of the project on its economic efficiency.
Chapter 6. RISK ANALYSIS
6.1. Description and ways to minimize risks
Risks are the possibility of obtaining a result that is different from the expected, adverse development of the situation or incurring losses in the course of performing certain activities. Risk is always associated with the occurrence of potentially undesirable or worsening events. Risks must be foreseen and assessed for the timely adoption of effective measures to minimize them. To this end, a qualitative individual assessment of the most significant risks is carried out and ways to minimize them are determined.
6.2. Project risk profile
The risk group analysis is calculated as the product of the probability of occurrence of a particular risk and the degree of its impact on the project. The following scale is used to calculate the corresponding values:…
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