Mynampati Sreenivasa Rao,

M.B.A

BUSINESS CONSULTANT
Mobile: 9866119816
www.mcsindustrialconcepts.com
----------------------------------------------------------------------------------Biodiesel manufacturing Industry
Biodiesel is the name of a clean burning alternative fuel, produced from domestic,
renewable resources. Biodiesel contains no petroleum, but it can be blended at any
level with petroleum diesel to create a biodiesel blend. It can be used in
compression-ignition (diesel) engines with little or no modifications. Biodiesel is
simple to use, biodegradable, nontoxic. Biodiesel is better for the environment
because it is made from renewable resources and has lower emissions compared to
petroleum diesel. It is less toxic than table salt and biodegrades as fast as sugar.
Cocoa Butter Oil, Coconut Oil, Cotton Seed Oil,Jatropha oil,Karanja oil,Mahua Oil,
Maize Oil, Mustard Seed Oil, Olive Oil, Palm Kernel Oil ,Palm Oil, Rapeseed Oil,
Safflower Oil, Sesame Oil, Soybean Oil, Sunflower Oil , Palm oil Stearin etc natural
renewable oils can be used to manufacture the Biodiesel. Due to cost considerations
Jatropha oil,Karanja oil,Crude Palm Oil and Palm oil Stearin are being used as raw
material to manufacture biodiesel.
Biodiesel is safe, biodegradable, and reduces serious air pollutants such as
particulate, carbon monoxide, hydrocarbons, and air toxic. Blends of 20% biodiesel
with 80% petroleum diesel (B20) can generally be used in unmodified diesel
engines. Biodiesel can also be used in its pure form (B100), but it too may require
certain engine modifications to avoid maintenance and performance problems.
Biodiesel (fatty acid alkyl esters) is a cleaner-burning diesel replacement fuel. Just
like petroleum diesel, biodiesel operates in compression-ignition engines. Blends of
up to 20% biodiesel (mixed with petroleum diesel fuels) can be used in nearly all
diesel equipment and are compatible with most storage and distribution equipment.
These low level blends (20% and less) generally do not require any engine
modifications. Biodiesel can provide the same payload capacity and as diesel.
Using biodiesel in a conventional diesel engine substantially reduces emissions of
unburned hydrocarbons, carbon monoxide, sulfates, polycyclic aromatic
hydrocarbons, nitrated polycyclic aromatic hydrocarbons, and particulate matter.

These reductions increase as the amount of biodiesel blended into diesel fuel
increases. The best emissions reductions are seen with B100.
The use of biodiesel decreases the solid carbon fraction of particulate matter (since
the oxygen in biodiesel enables more complete combustion to CO2) and reduces the
sulfate fraction (biodiesel contains less than 24 ppm sulfur), while the soluble, or
hydrocarbon, fraction stays the same or increases. Therefore, biodiesel works well
with new technologies such as diesel oxidation catalysts (which reduce the soluble
fraction of diesel particulate but not the solid carbon fraction).
Emissions of nitrogen oxides increase with the concentration of biodiesel in the fuel.
Some biodiesel produces more nitrogen oxides than others, and some additives
have shown promise in modifying the increases. More R&D is needed to resolve this
issue.
Biodiesel has physical properties very similar to conventional diesel. Biodiesel's
Physical Characteristics:
Specific gravity

0.87 to 0.89

Kinematic viscosity @ 40C

3.7 to 5.8

Cetane number

46 to 70

Higher heating value (btu/lb)

16,928 to 17,996

Sulfur, wt%

0.0 to 0.0024

Cloud point C

-11 to 16

Pour point C

-15 to 13

Iodine number

60 to 135

Lower heating value (btu/lb)

15,700 to 16,735

BIODIESEL BENEFITS

Bio-Diesel is a substitute or extender for traditional petroleum diesel.

It can be used in conventional diesel engines.
Scientists believe carbon dioxide is one of the main greenhouse gases contributing
to global warming. 100 percent biodiesel (B100) reduces carbon dioxide emissions
by more than 75 percent over petroleum diesel. Using a blend of 20 percent
biodiesel
reduces
carbon
dioxide
emissions
by
15
percent.
Biodiesel also produces fewer particulate, carbon monoxide, and sulfur dioxide
emissions, all targeted as public health risks by the Environmental Protection
Agency.
Since biodiesel can be used in conventional diesel engines, the renewable fuel can
directly replace petroleum products; reducing the country's dependence on
imported oil.
Biodiesel offers safety benefits over petroleum diesel because it is much less
combustible, with a flash point greater than 150C, compared to 77C for
petroleum
diesel.
It
is
safe
to
handle,
store,
and
transport.
Biodiesel can help reduce our dependence on foreign oil and help us leverage our
fossil fuel supplies. It can also help reduce greenhouse gas emissions, as well as
public health risks associated with air pollution. It is nontoxic and biodegradable.
Biodiesel contains only trace amounts of sulfur, typically less than the new EPA
standards that will go into effect in 2006 for diesel fuel. It is safe to handle,
transport, and store, and has a higher flash point than petroleum diesel. It can also
be stored in diesel tanks and pumped with regular equipment except in colder
weather, where tank heaters or agitators may be required. Biodiesel mixes readily
with petroleum diesel at any blend level, making it a very flexible fuel additive.
Biodiesel is an oxygenated fuel, so it contributes to a more complete fuel burn and
a greatly improved emissions profile. The more biodiesel used in a blend, the higher
the emission reductions. One of the unique benefits of biodiesel is that it
significantly reduces air toxic that is associated with petroleum diesel exhaust and
are suspected of causing cancer and other human health problems.

DEMAND AND SUPPLY:

Recent trends are indicative of tremendous increase in the production of
Commercial Vehicles and the consumption of Diesel. The import bill is mounting and
the availability is going down. New sources will have to be developed and new units
have to be put up in the next decade to manufacture BioDiesel which will substitute
imported diesel in large quantities to meet the domestic demand where by causing
smaller drain of our limited sources of foreign exchange.

The growth of Automotive industry, particularly in the last 15 years, has been
spectacular. It is not the magnitude of volume only, but also the diversity of
products (Commercial vehicle, cars, two/three wheelers), which have been
impressive. The proposed product, i.e. BioDiesel also shows a good potential growth
for demand.
Project Cost:
1. Capacity Of the Industry: 10000 liters per day
2. Raw materials required per day:
i) Palm oil Stearin =8105.4 kgs. Price: Rs.32.00 kg
ii). Methanol=1185 kgs. Price: Rs.20.00 Kg
iii).KOH=189.60 Kgs. Price: Rs.90.00 Kg
3. Manpower required: 8 Nos.
4. Power required: 55HP
PROJECT FINANCIALS:
1
2
3
4
5
6
7
8
9
10

TOTAL CAPITAL EXPENDITURE

LAND & DEVELOPMENT EXPENSES
BUILDINGS
PLANT & MACHINERY
OTHER EQUIPMENT
ELECTRICAL FIXTURES &FITTINGS
OTHER FIXED ASSETS
DEPOSITS
OFFICE FURNITURE & EQUIPMENT
PRELIMINARY EXPENSES
PREOPERATIVE EXPENSES

0.5 acer
4000 sft

TOTAL CAPITAL EXPENDITURE

1
2
3
4
5

WORKING CAPITAL REQUIRED PER MONTH

RAW MATERIALS
SALARIES & WAGES
REPAIRS
ADMN.EXPENSES
Other expenses
TOTAL WORKING CAPITAL
REQUIRED PER MONTH
TOTAL PROJECT INVESTMENT
TOTAL CAPITAL EXPENDITURE
TOTAL WORKING CAPITAL

7.50
16.00
65.00
5.00
1.00
5.00
2.10
0.90
1.00
2.50
106.00

70.00
0.72
0.1
1
0.67
1.50
73.00

106.00
73.00

TOTAL
MEANS OF FINANCE:
Promoter Investment
Term loan
Working Capital Loan
TOTAL PROJECT INVESTMENT

179.00
59.00
71.00
49.00
179.00

Profitability (100% capacity utilisation)

ANNUAL SALES
Bio-diesel
30,00,00
0
Glycerol
94,704

Rs.35.00
liter
Rs.15.00
Kg

TOTAL SALES INCOME

2
i)
ii)
iii)

iv)
v)

Less

1
2
3

TOTAL ANNUAL EXPENSES

Working expenses
Depreciation
Interest
a) Term Loan
b) Working Capital Loan
Total Interest
PRELIMINARY EXPENSES WRITE OFF
PREOPERATIVE EXPENSES WRITE
OFF
TOTAL ANNUAL EXPENSES
Profit:
TOTAL SALES INCOME
TOTAL ANNUAL EXPENSES
PROFIT
PROFIT ANALYSIS
Profit on Turn Over
155.56/1064.20 x 100
Profit on promoter equity
155.56/59.00 x100
Profit on Total Investment
155.56/179.00 X100

1050.00
14.20
1064.20

73.00
95.00

12
15%

876.00
14.25

71.00
49.00

12%
13%

8.52
6.37
14.89
1.00
2.50
908.64

1064.20
908.64
155.56

14.61%
263.66%
86.91%

Note: The financial data given above is tentative only. There may be some changes
at the time of project implementation. Like any new and fast-growing business, the
future profitability and return on investment, if any, are dependent on a large
number of conditions, some of which include; supply and demand for products,

location of the
Biodiesel plant, feedstock(s) for each new Biodiesel plant,
agricultural conditions of the country and region where we obtain our feedstock,
political, economic and socio-economic conditions, global/regional and market
prices and fluctuations of the production output and co-products, foreign exchange
markets and other currency conditions/variations, labour and management
conditions, among others.

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