G e e B i z2 0 1 1 C o m p e t i t i o n

AE*(IranPersian/English),AweSariatAdenike(NigeriaYoruba/English), ElianaSofaMartnesCollazos(ColombiaSpanish/English),JillBalek(USA), GG*(IranPersian/English),SandraSimanskyte(USA), KellyYulianaOspinaTuberquia(ColombiaSpanish/English),AndreGilhespy(NewZealand) *Iraniannameshavebeensuppressedforthesafetyofthestudents.

Tab le o f C o n t e n t s

Overview3 Goals.3 TheJatrophaTree3 BusinessConcept.4 Marketenvironment.5 Impact..5 Financial..6

Overview
BioDieselNigeria(BDN)isacompanythatwillprovidejobsforNigeriansbyfarmingJatropha seeds.Thecompanywillemploythoselivinginpovertyinthecitiesandrelocatethemto Jatrophafarmsinthenorth.HeretheywillbetrainedtofarmJatrophatreesandbepaida decentwage.OncetheyhaveworkedforBDNthroughoneharvesttheywillbecomepart ownersofthebusiness,givingthemtherighttoashareoftheprofits.Inthisway,BDN ensuresthatcontrolofthebusinessstayswiththeworkersandtheprofitsgotothelocal community.TheJatrophatreegrowswellinaridlandunsuitableforfoodcropsandcanhelp combatdesertification,makingitwellsuitedtothenorthofNigeria.Thereisasignificant marketfortheseedsthatsellforapproximatelyUS$140pertonne.

Goals
BioDieselNigeriahasmultiplegoalsforimprovingNigeria: ReducepovertylevelsthroughworkerownedJatrophafarms.Byrecruitingdirectly fromthoselivinginpovertyandtheirfamilies,BDNwillbemakinganimmediate impactonpovertyinNigeria. Createasustainablebusiness;keepingtheprofitsinNigeriabydistributingthem betweentheworkersandreinvestingtogrowthesizeofplantations.Thiswillensure theprofitsarenotbeingtakenoverseas;theyaredirectlybenefitingthelocal community. Provideasourceofincomeforthecountrythatdoesnotrelyontheoilindustry.The internationaldemandforJatrophaoilisgrowing,givingNigeriathechancetoreduce itsdependenceontheoilcompaniesforincome. HelptohaltdesertificationbyplantinglargevolumesofJatrophatreesalongthe edgesofencroachingdesert.ThiswillbenefitfarmersgrowingsouthoftheJatropha farmsbyprotectingthemfromdecreasingsoilquality.Thiswillgivethemthe opportunitytoimprovetheirsoilqualityandgrowingpotential.

The J a t r o p h aT r e e
TheJatrophacurcastreeisasmallperennialtreethatgrowswellinbarrenlandandis droughttolerant.Itcangrowalmost anywhereanditshedsitsleavesinthe dryseasoncreatingmulcharoundthe baseofthetree.Thismulchencourages earthwormactivity,coupledwiththe nitrogenfixingqualitiesofthetreethis helpstoimprovesoilquality.Thetree producesseedsonceayearandstarts toproduceinthefirstyearwithyields increasingasthetreeages.TheJatropha curcascanliveforupto40yearsso thereisnoneedtoreplanteachyear.

 Jatrophaseedscontainroughly2830%ofnonedibleoilthatburnswithasmokefree flame.Thisoilisoneofseveraldifferenttypesthatcanbeusedincreatingbiodiesel.Itis alsousefulforindoorcookingandlanternsduetothelackofsmoke.Priortobeing processed,theseedsmustberemovedfromthefruitpodsanddried.Exposuretosunlight duringdryingtendstodegradequalityandstoragelifeoftheseedssoitisimportantto havecoveredareasfordrying.Ifdriedcorrectlytheseedscanbesafelystoredforupto15 months. Seedyieldsvarysignificantlyduetogrowingconditionssuchasmoisture,spacing, fertilisation,andsoilquality.Itisclaimedthatsandysoilcanproducethebestresultsif fertiliserisadded.Inmoretropicalenvironmentswithregularrainfall,theJatrophatreeis capableofproducingseedseveryfourmonthsinsteadofonceayear.Somesourcesclaim thatataspacingof3mX2m(1600perhectare),eachtreecanyieldbetween0.51kgof seedspertree,resultingin1.64tonnes/hectares.Seedyieldsincreaseasthetreeages resultinginhigherproductivityperhectare.

B u s i n e s s C o n c e p t
BioDieselNigeriawillberunbyNigerianbusinessmen/womenwhoalreadyhaveknowledge oftheagricultureindustry.Itwillhirethoselivinginpovertyinthecitiesandhelprelocate themtonorthernNigeria.TheywillreceivetrainingonJatrophafarmingandstartplanting thefarms.Anyemployee,farmerornot,whohasworkedforthecompanythroughtheir firstharvestwillthenbeconsideredashareholder.Thiswillentitlethemtoanequalshare inthecompanysprofits,makingsurethemoneystaysinthecommunity. Thecompanywillstartwithaplantation sizeof2,000hectaresandaimtohire 4,000farmers.Farmingpracticesvary significantlyaroundtheworld,withsome sourcesclaimingonefarmerperfour hectaresandotherscitingfourfarmersper hectare.BDNhaschosentotrialthe middlegroundwithtwofarmersper hectareandwillhavetheflexibilityto modifythisratioifneeded. Largedryingshedswillbesetupinacentrallocationtofacilitatetheextractionoftheseeds fromtheirpods,drying,andpackingforshipmenttobuyers.Thiswillprovidethecomplete servicefromgrowingtoshippingtoprocessors.ThereisaJatrophaoilprocessingplant currentlybeingbuiltthatwillbeoperationalbythetimeourfirstharvestisreadytobesold. DuetogoalsofBDNwewouldprefertofindlocalbuyersforourseedsinordertokeepas muchoftheprofitswithinNigeriaaspossible. IfthereisinsufficientcapacityforseedprocessingwithinNigeriawewouldsetupaplantof ourown.Thiswillprovideuswithahighervalueproductandanextrarevenuestreamfrom processingothergrowersJatrophaseeds.Asourcompanygrows,someprofitswillbe

reinvestedinexpandingthenumberofhectaresundercultivation,providingmorejobsfor thoseinpoverty.Someprofitswillalsobeinvestedintechnologysuchasdripirrigationto boosttheproductivityofthefarms.

M a r k e t En viron men t
Nigeriaisreliantontheoilindustryforthevastmajorityofitsexports;itisthe12thlargest producerofpetroleumintheworldandthe8thlargestexporter.Theseearningsdonot tendtotrickledowntheeconomyandthepooraregettingpoorer.However,in2005 Nigeriapaidoffitsinternationaldebts,freeinguproughly$1.15billionperyearforpoverty reductionprograms.AgricultureisaveryimportantsectoroftheNigerianeconomy;itused tobetheworldslargestexporterofgroundnuts,cocoa,andpalmoil.About60%of Nigeriansworkintheagriculturalsectorbuttherearestilllargeareasofunderutilisedland available. TheNigeriangovernmentistryingtopromotethefarmingandprocessingofJatrophaseeds. Astheindustryisonlyjustgettingstarted,thereislittlecompetitionandalotofsupport fromthegovernment.TherehasbeenN50billionsetasideforcommercialfarmingincluding Jatrophaandisofferingspeciallowinterestloansforinvestorsinthebiofuelindustry.The FederalMinistryofScienceandTechnologyissupportingJatrophafarming,offeringtraining workshopsandotherservices. Thereisanestablisheddemandinternationallyforbiodieselanditcontinuestogrowdueto environmentalconcerns.Theworldwidemarketwas$18.4billionin2010andisestimated toincreaseto$71billionby2020.Asignificantpartofthisgrowthisduetomanymajor airlinespledgingtosourceupto10%oftheirfuelneedsfrombiofuelsby2017.

I m p a c t
BioDieselNigeriahasthechancetosignificantlyimprovethelivesofthousandsofNigerians livinginpoverty.Itcandirectlyaffectthequalityoflifeofitsemployeesbyprovidinga decentincomeandprofitsharing,andcanindirectlyaffectthelivesofthousandsmore Nigeriansasearningsarespentwithinthelocalcommunities.Astheoperationexpands,the directimpactwillincreaseandthetrickledown effectwillbecomemoreandmorepronounced. Becausethecompanyisownedandoperated byNigeriansitincreasestheseeffectsby keepingalltheprofitsinthecountry,further increasingitsabilitytoincreasethestandardof livingofmanyNigerians. BDNwillalsohelptoincreaseactivityinthebio fuelindustrywithinNigeriaandraisethenonoil contributiontoGDP.Thiswillhelptheeconomy breakfreeofitsrelianceontheoilindustryand fosterasenseofpridewithinthoseworkingforBDN.

ByplantingJatrophaalongthearidnorthernbordersofNigeriaBDNwillplayasignificant roleinslowingandpossiblyhaltingdesertification.Oncetheplantationsbecomeirrigated, thisimpactwillbefurtherincreased;havingtheeffectofimprovingthesoilqualityofthe surroundingareas.Thiswillaidthecountryasawholeduetolargerareasoffarmableland andreducingtheworryoflosinglandtotheencroachingdesert.

F i n an c i al

2000haplantation US$ Year1 Year2 Year3 Year4 Year5 Year6 Seeds(tonnes) 3,200 4,000 5,000 8,000 10,000 10,000 Sales 448,000 560,000 700,000 1,120,000 1,400,000 1,400,000 Wages GrossProfit 387,000 61,000 387,000 173,000 387,000 313,000 387,000 387,000 387,000

Therewillbeotheroverheadcostsandsetupcostswithinitialplantingandlandpurchasing, butatthisstage,itishardtoestimate.BDHisnotexpectingtomakeaprofitinthefirst year,asseedyieldswillbequitelow,howeverthestandardmodelforJatrophafarmsshows profitsinthesecondorthirdyear.Asthetableshows,profitsincreaserapidlyasseedyields increase.Thiswillallowinvestmentinirrigationtechnologyattheendofthethirdyear, significantlyincreasingyieldsinthefollowingyears.Attheendofthe4thyearwewilllook atexpandingthenumberofhectares undercultivationtocapitaliseonthe marketandpushgrowth. WewillpayourfarmersN30,000per year.Thisisabovetheaverage agriculturalwageofN1020,000and almostdoubletheminimumwageof N18,000butstillN3,000lessthanthe percapitaincomeofN33,000.Wedoexpecttheirincometoincreasesubstantiallyaftera fewyearsduetoprofitpayoutsfromBDN.Becausethecompanywillnotbeprofitablefor thefirst12years,thewageneededtobesetatareasonableratebutnotsohighasto cripplereinvestmentopportunities. Ourstartupcapitalwillbesecuredfromlowinterestgovernmentloansaspartoftheir initiativetopromotetheagriculturesectorandJatrophafarminginparticular.Ifwedecide tobuildaprocessingplantfundingisavailablefromthegovernment,theyhaveputaside N10billionforlowinterestloansavailabletoinvestorsinbiofueldistilleries.

733,000 1,013,000 1,013,000