1. Your company information
Presentation Title
Your company information

2. Agenda Perpetual Energy Group Recommendation Overview Why Biodiesel?
Production Process
Market Distribution
Performance Evaluation
Recommendation

3. Perpetual Energy Group
West Texas Biodiesel Facility
Profit
(Financial)
People
(Social)
Planet
(Ecological)
The Perpetual Energy Group is a business built on the foundation of sustainability. With that in mind, the newest investment to further enhance their sustainability is the West Texas Biodiesel Facility. By operating the facility, Perpetual looks forward to increasing their contribution to the Three Ps: planet, people, and profit. Building a sustainable business practice requires environmentally friendly practices along with, adding a revenue stream, using economical raw materials, implementing a safe and eco-friendly processes, and increasing profitability.
Thesis - In this presentation we will analyze the new facility in terms of social, financial, and ecological impact.

4. Recommendations West Texas Biodiesel Facility People Planet Profit
Today, we as SKY Consulting have analyzed the Perpetual’s sustainable business strategy through different options for the West Texas Biodiesel Facility.
Our analysis focused on three main criteria that Perpetual looks forward to contribute: people, profit, and planet.
With this in mind, we recommend Production method of animal fat and vegetable oil. Through doing this, Perpetual can better recycle waste to generate energy.
We also recommend that Perpetual Energy group distribute its biodiesel to greyhound and Sun Metro to contribute back to the people in society and improve the environment of this planet.
Additionally, we added a new revenue stream to sell biodiesel to the lighter fluid market. This would help Perpetual energy group to increase profit and at the same time, provide people an ecological product to use when they go camping or just doing barbeque in the backyard.
Based on our cost, revenue and NPV analysis, these options we recommended are actually very feasible and profitable.
Finally, in the future, we recommend perpetual to further develop and use glycerin byproduct. Perpetual can build a refinery for glycerin to further increase revenue.
Distribution Market
50-50 Production
Additional Revenue Stream

5. Waste Energy Why Biodiesel?
So why Biodiesel? Why not hydropower or solar power? Biodiesel is the best alternative energy because we’re taking waste from other productions and creating a fuel alternative for an affordable price and it is done safely with the environment in mind. We’ve considered hydropower but it is both costly to build the dam needed and the dams can cause serious ecological damage. Solar energy was also considered, but we opted out of it because its low efficiency

6. (4.5 million at full capacity)
Production Process
3.825 million gallons
(4.5 million at full capacity)
Glycerin
50% Waste Vegetable Oil
50% Animal Fat (Tallow)
Animal fat and oil blend- “We’ll being using a 50% animal fat, 50% vegetable oil blend; therefore our biodiesel would be made completely from waste. We opted out of using soybeans because of the negative social effects that would be caused by our mass consumption. For example, we would be driving the price of soybeans, negatively affecting consumers. According to the Southwest Farm Press in May 2013, the soybean price has increased 74 cents on average due to the increased consumption of biodiesel producers. Instead, with the use of animal fat, we would be using the most economical raw materials for production, while maintaining a high profit.
What we’ll do with our by products- glycerin- In keeping with our enthusiasm for sustainability and increasing profit, we will be selling crude glycerin to refineries, which will add a revenue stream, at virtually no cost to us.
Produce 4.5 million gallons / year
375,000 gallons / month
Projected 85% sales of capacity
50 – 50 Raw Material
50% - waste vegetable oil
50% - animal fat waste (tallow)
Price of soybeans increases $0.74
May, 2013
Byproduct – Glycerin
Add revenue stream

7. Acquisition of Raw Materials
Used Vegetable Oil (50%)
Local Restaurants
Subsidized container and pick up expense
Eco-friendly way of disposing local waste
Animal Fat Waste (50%)
Long-term contract with Tyson
Subsidize cost for delivery from Tyson
With the Production method, we must acquire slightly over 1.9million gallons of used vegetable oil and animal fat waste each. In order to give back to the community, we will acquire our used vegetable from local restaurants, offering free container and pick-up. It provides a profit for both companies with benefits for the environment. For our animal fat waste, we will sign a contract with Tyson Foods located in Dallas. Currently, Tyson has few of its own biodiesel factories and distributes the rest of the fat waste to third party manufacturers. Through acquiring the wastes, we hope to generate a positive impact for the community and environment.

8. Distribution of Biodiesel
Main Point 2- Market Distribution
Overview - Our primary distribution will consist of the transportation market and the fluid lighter. We will distribute 2 million gallons to the Sun Metro of El Paso, 1 million gallons to producing lighter fluids, and 825,000 gallons to Greyhound for the use as a B20. Our selection of distribution is based on the opportunity costs as well as the consideration of making a profit while giving back to the community and improving the environment.

9. Greyhound
Greyhound - The Greyhound headquarters is located in Dallas, Texas. With 5.5 billion passenger miles per year, Greyhound displays an attractive fuel market for the ecological producers. As a major destination and shortstop, Dallas is a top candidate for our distribution to the transportation market. We will distribute our biodiesel to be consumed as a B20 and since the mixing process does not require any production, Greyhound has an incentive to go green without any additional costs. Thinking about our sustainable business practice, Greyhound operates nationally and if we can reduce the pollution little by little, it can lead to a national distribution.

10. Sun Metro
Sun Metra - As the biggest public transportation company in El Paso, we believe we must give back to the community. Currently, the Sun Metro is consuming natural gas for their buses. But we believe that the natural gas is an unstable market with many hazards to the environment and people. The natural gas emits CO2 and is explosive and potentially dangerous. Also the fracking process to extract the gas is creating many environmental concerns such as water pollution, creating earthquakes and more. With that in mind, we will work with Sun Metro to provide a safer and cleaner means of transportation. We will sell lower than the market cost in order to ensure a strong relationship with Sun Metra. We look forward to contributing to our community and enhancing the ecological contribution.

11. Lighter Fluids
Lighter Fluid - Our greatest stream of revenue is the distribution of the lighter fluids. Because the lighter fluids do not require any production, costs to produce are minimal with only bottling and packaging costs. The lighter fluid will be made by simply combining 40% biodiesel and 60% ethanol. Ethanol is made from the distillation of corn; therefore both components of our lighter fluid are completely natural. We will be making a safe, odorless, and healthy alternative to the regular charcoal lighters. Our lighter fluid would be ideal for things like grilling, because the regular lighter fluid can potentially make your food taste less desirable. In addition to the health benefits, an extensive breakdown of costs and investment show that the high profitability of this investment, while maintaining a competitive price. Therefore, the lighter fluids provide more than 75% of our revenue.

12. Performance Evaluation
Revenue
Profit
NPV
Now that we have covered the social and ecological aspect of the sustain strategy, I will analyze the performance evaluation of the new facility and their projected revenue, profit, cost per unit, and finally NPV

13. Revenue
Revenue - By year 3, we expect to increase our revenue to 37.5 million. As you can see from the graph, our revenue stream consists of four sources. The fluid lighter consists of 75.3% of revenue while the Greyhound distribution consists of 8%. Also, the distribution to Sun Metro contributes 16% of our revenue. FInally, the sales of crude glycerin generates about less than 1% of our revenue.

14. Profit Sustainable Strategy Profit $10 Million Glycerin Refinery
Profit - Our bottom line profit is slightly over $10 million. In order to increase future revenue streams, we may increase our production of lighter fluid and also add a facility to refine the crude glycerin to be sold at a higher price. With the production and distribution reaching a stable point, Perpetual can consider potential expansion to strengthen their sustainable strategy. Also, we have used conservatism when calculating our subsidy for tax expenses to $1. Since the subsidy can increase to as high $1.5, we may see an increase in the profit from there as well.
Glycerin
Refinery
Potential
Expansion
Increase Production

15. NPV Analysis
After taking a consideration of all the options we suggested, we ran an NPV analysis to have an general idea of profitability and feasibility for biodiesel project. As you can see from this chart, the red line (which is the cash inflow) is much higher than the blue line (which is the cash outflow), and it keeps increasing every year during the 10 year-period we projected. These cash flows generates a positive NPV of $45,000, indicating that West Texas Biodiesel Facility will be able to earn a large profit adopting options we suggested.

16. Recommendations West Texas Biodiesel Facility Planet People Profit
Today, we as SKY Consulting have analyzed the sustainable business strategy for Perpetual Energy Group and we have discussed different options for West Texas Biodiesel Facility.
Our analysis focused on three main criteria that Perpetual looks forward to contribute: people, planet, and profit.
With this in mind, we recommend a Production method of animal fat and vegetable oil to better recycle waste into energy we can use.
We also recommend distributing biodiesel to greyhound and Sun Metro to contribute back to the people in society and improve the environment of this planet.
Additionally, we added a new revenue stream to sell biodiesel to the lighter fluid market. This would not only help Perpetual to increase profit but at the same time, provide people an ecological product to use when they go camping or just doing barbeque in the backyard.
Based on our cost, revenue and NPV analysis, the options we recommended are actually feasible and profitable.
Finally, if perpetual want to further increase revenue in the future, we would recommend perpetual to build a refinery to develop glycerin byproduct.
50-50 Production
Distribution Market
Additional Revenue Stream

17. Questions or Comments

18. Acquisition of Animal Fat Waste from Tyson

19. Acquisition of Vegetable Oil

20. Bottling Machines

21. Cost of Containers

22. Delivery Truck Costs

23. Depreciation

24. Glycerin Revenue

25. Income Statement Net Income

26. Income Statement Expenses

27. Income Statement Revenue

28. Lighter Fluid Expenses

29. Lighter Fluid Revenue

30. Per Unit Costs

31. Per Unit Product Contribution Margin

32. Raw Materials for Biodiesel Production

33. Revenue and Profit 2017

34. NPV Assumptions

35. NPV Calculation

36. Works Cited
Animal Fat
Animal Fat – Distribution
Biodiesel - Production
Biodiesel – Defining
Biodiesel - Uses
Biodiesel – Market Price
Biodiesel - Potentials

37. Works Cited Biodiesel – Advantages vs. Disadvantages
Biodiesel – Increases price of Soybeans
Biodiesel – Saving Costs for Consumers
Biodiesel – Uses
Competitor’s Pricing for LNG
Competition with Megabus
Diesel - Market Price
Delivery Truck – Price

38. Works Cited Delivery from Tyson
Financial Statement (travel 5.6 billion miles per year *81% U.S., 2000 vehicles *81%
Glycerol – Potentially Valuable
Glycerol - Market
Greyhound – Cost / Gallon
Market Prices of Competitive Fuels
NPV – Discount Rate
NPV – WACC 16.94%

39. Works Cited NPV – Inflation Rate
NPV – Growth Rate
Natural Gas Hazards
Sun Metro Current Fuel Usage
Used Cooking Oil - Container
Used Cooking Oil – Price
Used Cooking Oil - Price