BUSINESS MODELS TO

ATTRACT INVESTMENT
INTO JATROPHA
Dr Mike Taverner
Executive Chairman
JATOIL LIMITED
SYDNEY, AUSTRALIA
Biofuels - a risky investment in a
rapidly changing market?
• <2 years ago, Australian biodiesel companies
raised capital and listed with a business model
based on producing biodiesel from a secure and
affordable range of feedstocks
• Proved to be wrong model
– No affordable feedstock
– No support from Government or industry
• Results
– Losses for investors
– Reduced confidence in market
Some recent investment
experiences in biofuels
• D1 Oils had an oil refining model but changed
their business model to incorporate feedstock
production
• This attracted new investment (BP), but it
seemed that expectations of ease / speed in
establishing jatropha oil production were over-
estimated
• Jatropha business model changed again – now
with extra focus on crop improvement
Fundamentals still strong for
investment into biofuels
Summary of reasons to invest in biofuels
• High costs of fossil oil importation.
• Demand will be underpinned by national mandates for
renewable fuels and market growth from China and
India.
• Biofuels can be integrated into existing markets without
high cost changes to infrastructure. Biofuels can also be
dispensed just as gasoline is today.

From “The European Biofuels Challenge: Developments in European

Union Policy and Industry Drivers” By Urmila Doraswami. August
2008
 WWF/SNV Biofuel Study
“5.1.4.2 Multi-criteria Analysis of Suitable Biofuel Feedstock alternatives

Biofuel feedstocks have been ranked in terms financial sustainability for small holder
producers, energy balance, GHG emission reduction, environmental impacts, habitat
conversion, land and soil degradation, water pollution, and contamination from
processing effluents and agrochemicals, ease of environmental mitigation, human food
chain biofuel feedstock competition, compatibility with existing farming systems, water
and labor marginal productivities and market demand.”
Rank Feedstock
#1 Jatropha Curcas
#2 Cassava
#3 Sugarcane
#4 Soybean
#5 Maize
Other feedstocks (like palm oil) were deemed not to meet minimum qualifications for
sustainability.
There is increasing commercial
interest in jatropha oil
Air New Zealand to power plane with nut oil
“AIR New Zealand will trial flying a jumbo jet partly powered by nut
oil later this year. With oil prices soaring, the company is testing
the power of the jatropha curcus, a nut which grows in tropical,
semi-arid regions.” By Brad Crouch August 03, 2008
Toyota eyes diesel options
Toyota and PTT, in collaboration with Kasetsart University, have
been conducting experiments to develop biodiesel from the fruit
of jatropha. Santan Santivimolnat http://www.bangkokpost.com/Business/28May2008
Bio Energy Plantations Pte. Ltd has signed its first Jatropha
off-take MoU with leading bio-diesel producer Van Der Horst
Biodiesel Pte. Ltd.
Jatropha is the preferred feedstock
Conclusions from global market study*:
• Jatropha is on the move on large scale – expect
investments of >$1bn annually in the years to
come
• Jatropha can be made sustainable – if the right
models are chosen
• Need to support research and the development
of showcase models

* By GEXSi from JatrophaWorld 2008 Miami

To be attractive, business models
must now recognise:
• The need to secure affordable feedstock
• That investment in jatropha production is more
than securing access to vast areas of land
• The importance of social and environmental
sustainability in feedstock production
• The uncertainties and timescale in jatropha
production
• That supply chains need to be established and
fostered.
 Jatoil Ltd

Jatoil is a sustainable global business

producing renewable fuels with social &
environmental responsibility.
Jatoil Corporate (ASX:JAT): a public
company
• Conduit for further development and delivery of
renewable energy technologies
• Collaborate/partner with like-minded businesses
– Perennial Bioenergy AS and Imperium Renewables, Inc
• Service subsidiaries and JVs:
– loan & finance facilities
– business planning
– governance and systems
– financial management
– market development
– technical development
Jatoil development is based on:

• Jatoil’s investment into jatropha businesses

– Jatoil mandated to engage jatropha
biodiesel projects and businesses for
development and co-investment
• Attracting new investment in order to grow
Jatoil’s jatropha businesses
– Jatoil focused on staged growth with co-
investors
Jatoil structure provides for investment at
various levels:
Corporate Level

Jatoil Ltd
Alliance partners
Sydney

Country / Regional Level

PT Biodiesel Austindo GreenEnergy Biofuels

Newco
Indonesia Vietnam
Alliance partners Alliance partners

NT BT HB

Jat-Venture – Stages 1, 2 & 3

GreenEnergy Vietnam Biofuels JSC
• Jatoil Ltd and GreenEnergy Biofuels Joint Venture
Agreement – May 2008
• Initial Pilot project in Ninh Thuan approved by
Vietnamese Provincial People’s Committees
• Platform for future raising
– Competent local management
– Test viability before major expansion/investment
• Quality networks
– SNV – Dutch NGO guidelines on win/win commercial relationships
– Center for Biotechnology in Forestry – expertise/technical relations
– Ministry of Agriculture and Rural Development – approval of ‘best
use’ land allocation
• Further investment on milestones achieved.
Jat-Venture Stage 1
• Agri-station that both proves the business
concept and develops essential infrastructure for
growth
– Central office and warehouse
– 50-100ha model jatropha plantation
– Plant propagation and nursery
– Refinement of jatropha varieties and associated
agronomy and crop management
– Seed and oil processing facilities
– R&D facility
– Local field training
Jat-Venture Stage 2
• Stage 2 expansion proves the commercial scale
– Contract farming neighbouring Agri-station
– Up to 5,000 ha in 2 year period
– Agri-station now also for seed collection, processing
and possible refining
– Local farmers supported with training, seedlings,
fertilizer and management advice
Jat-Venture Stage 3
• Stage 3 commercial expansion to optimum
plantation scale
• Contract farming from 5,000 ha to 25,000 ha
• Agri-station expanded and additional processing
capacity installed
• Satellite centres established
• Revenues within years 3-4
Key features of attractive jatropha
business models:
• Secure access to CJO that is both affordable and
certified for social & environmental sustainability
• Advanced value chain planning
• Advanced supply chain development (preferably
with long term supply chain partners)
• High standard of management and corporate
governance
• Plans with flexibility to respond to market changes
yet with certainty for further investment.
Attractive plans address the key
business risks
• Management
• Production
• Political
• Market
Our understanding of the risks in a
jatropha business plan is imperfect
– but growing!
• Financial investors wary
– Need more certainty and proof
• Strategic investors ready
– Need to secure feedstock
– Prepared to share risks
Dr Mike Taverner

Executive Chairman
Jatoil Ltd
Sydney Australia
m.taverner@jatoil.net
www.jatoil.net