Biovale Energia - Partnership & Prospects

BIOVALE ENERGIA: YOUR PARTNER IN BRAZIL AND RET PROSPECTS

www.biovale.teiaslive.net

cluster of skills The strategy of BioVale is to cluster the various stakeholders of the biodiesel sector, organizing and aligning them in entrepreneurial design.

STRATEGY

The great opportunity is to cluster the best capabilities and resources to the benefit of the PERFORMANCE partners and shareholders of spinoff companies. Therefore, the innovation and intellectual capital is BioVale´s main asset, holding skills in Brazil and abroad to make out turn-key biodiesel projects.

PRODUCTIVITY

INNOVATION

BIODIESEL CLUSTER

BUSINESS CLIMATE

ECONOMIC COMPOSITION

SPECIALIZATION

COLABORATION

linking the stakeholders The main objective of the Hub is to bring capabilities of the various stakeholders involved in the bio-diesel production chain, both in Brazil and abroad providing resources and diffusing knowledge to the linked firms. The benefits provided through such linkages are of great significance because of the complimentary capabilities among the stakeholders. Linkages with foreign organizations can be a great driver of dynamism and competitiveness to develop effectively and rapidly the Brazilian bio-diesel program. The foreign firms benefit from linkages are reduced costs, local market and product intelligence and enhanced assets (UNCTAD 2001). MINASINVEST´s interventions, as a leading IPA (Investment promotion agency) are important to the extent that investors believe that an enterprising IPA can assist them in identifying and introducing reliable local firms and organizations with whom the investors can partner. The linkage envisages upgrading domestic enterprises; facilitating the transfer of technology, knowledge and skills; improving business and management practices; and facilitating access to finance and markets.

Biodiesel - a Mutual Profitable Partnership
As oil prices and environmental concerns have risen in the past few years, investment in new biofuel facilities has mushroomed in Brazil.
The Brazilian National Program for use and production was incorporated in the Brazilian energy matrix by Law nr 11.097/2005 .
Large trans-national corporations, as ADM, have already started investing in biodiesel projects in Brazil
The crop area required to produce the blend of initial mandatory 2% of biodiesel will be 1.5 million hectares, equivalent to only 1% of the total acreage under crops or available for agriculture throughout Brazil (150 million hectares).

BIOVALE ENERGY: YOUR PARTNER IN BRAZIL – FROM INCEPTION TO CONCEPTION

Possible partners Countries

:


Bearing high agricultural production costs
Bearing internal/external obligations of emission reduction (Kyoto Protocol and other compromises)
Bearing scarcity of cultivation lands
Willing strategic alternatives for vegetable oil and diesel supply

Companies

:


Having to meet social and environment responsibilities
Bearing environment liabilities
Willing to attract SRI and valuing their stock prices
Bearing intensive need of fuel sources
Investors in prospective high return SRI

BIOFUELS: FUTURE´S MOST PROSPECTIVE INVESTMENT

cooperation/partnership Possible areas of interest:
Utilization of Partners technology for biodiesel plants in building, logistics, utilization of glycerin and other byproducts, specification, engine tests, etc.
Sale of carbon credits (MDL) obtained through the utilization of biodiesel in Brazil.
Export of vegetal oil and biodiesel to Partner´s country.
Exploitation of the potential domestic market

BioVale contributions GENERAL CORPORATE ACTIVITIES General coordination among the various stakeholders Resources (financial and management) Industrialization: oil extraction and transesterification Logistics (sales, distribution, export process, shipping)

GENERAL CONSULTING ACTIVITIES turn-key/Global solution in Biodiesel projects Research & Development Institutional and Government support Project development, Project Financing an Funding International product commercialization Logistics (sales, distribution, export process, shipping)

professional management

Implementation

goals Internal capabilities

External capabilities Professional POOL

monitoring Roles of stakeholders Resources management

Action plan

BioVale Energy: your partner in Brazil.

strategies

Market scenario and prospects

the price of crude oil tripled between early 2002 and mid2005 while natural gas reaches a level six times greater than ten years earlier. Source: GTZ/WorldWatch Institute

The growing gap  energy companies have not invested in building enough refinery capacity to meet the growing level of world demand. World oil production has gone up by 40% in the past 20 years while refinery capacity has only gone up 15%. 

companies have not been able to find enough new oil and gas fields to replace the exhausting ones. Oil is being pumped out of the ground three times faster than it is being replaced by new oil finds.

the oil reserves discovered between 1950 and 1980 are being run down. Source: GTZ/WorldWatch Institute

Will oil prices rise further? "There are not enough large-scale projects in the development pipeline right now to offset declining production in mature oil fields and to meet global demand growth beyond 2007". (Chris Skrebowski, the editor of the Petroleum Review )

The total amount of energy that the world gets from oil and gas will begin to decline after 2010.

Source: GTZ/WorldWatch Institute

What alternative sources to fill the gap? The global demand for oil is increasing by just over 2% every year at present. This increase in demand added to the gap being created by the declining supply, implies new energy sources each year equivalent to 4-5 per cent of the world's current oil production:

around 1,800 million barrels of oil a year. In 2015, when world gas output ceases to increase to meet the its growing demand , the new energy sources would have to increase the annual rate at which they grew

by another 900 million barrels. Source: GTZ/WorldWatch Institute

What alternative sources to fill the gap?  The only truly sustainable energy sources are those based on the flow of energy from the sun: solar, hydro, wind, wave, biomass. These flows are very large in comparison with humankind's use of energy. Renewable sources can therefore meet all the world's energy needs, both now and in the future. The amount of energy supplied by renewable sources could be 120 times its present level . The problem is to develop these sources quickly enough to fill the gap as it opens up. Source: GTZ/WorldWatch Institute

Biofuels: a Booming Industry The world is on the verge of unprecedented growth in the production and use of biofuels , by virtue of:  Rising oil prices, national security concerns, the desire to increase farm incomes, and a host of new and improved technologies . The two most prevalent biofuels are ethanol and biodiesel. World production of ethanol more than doubled between 2000 and 2005, while production of biodiesel quadrupled.

RET OPPORTUNITIES
Renewable energy will have to supply a greater share of the world's energy requirements.
It is estimated that the market for clean energy technologies could be worth $1.9 trillion by 2020. The financial sector has a key role to play in developing and promoting this market.
In the next 25 years, the world will consume all that has been produced in fossil oils so far.
The world´s dramatic increment for fuels should be supplied by biofuels.
In the future, In the short run, ETHANOL and BIO-DIESEL are the main bio-fuels.

Renewable energy is both a solution and a business opportunity; BUSINESS AS AN AGENT OF WORLD BENEFIT

Brazilian ethanol´s use and production


PRODUCTION CAPACITY: 18 billion liters/year
PRODUCTION: 15 billion liters/year (seed/2004/2005)
EXPORTATION: 2.4 billion liters in 2004
SUGAR CANE PLANTED AREA: 5.6 million hectares
POTENTIAL FOR AGRICULTURAL EXPANSION IN BRAZIL:
90 million hectares of arable lands – Without any forest removal
INTEGRATED PRODUCTION OF SUGAR AND ETHANOL:
Provide production flexibility
UTILIZATION OF ETHANOL IN VEHICLES IN BRAZIL:
Automobiles, light commercials, motor-cycles and aircrafts
Flexible Fuel light vehicles: reached 37% of internal market sales in 2005

Brazilian domestic market projection


Law 11 097/2005: it sets forth a mandatory use of biodiesel mixture to diesel, which reflects in the following prospects

2020 2020 20% 12,4 12,4 billions billions liters/year liters/year

Source: MME

Brazil’s export potential With the launch of commercial production, Brazil becomes a potential exporter of biodiesel. The EU aims to ensure that 2% of all the fuel consumed in the region is renewable by 2005, but it has limited acreage available for growing rapeseed, the main feedstock produced in Europe, and industrial capacity is insufficient to meet the stipulated demand. Despite these constraints, the proportion of renewable fuels is set to reach 5.75% by 2010 according to EU Directive 30, ratified by the European Parliament in May 2003. Given the limitations for production growth in Europe, Brazilian biodiesel enjoys an unprecedented opportunity to build market share in the continent Europe.

Making the project workable

Market

Structure &

Strategic

sight

skills

alliances

FUNDING

EFFICIENT MANAGEMENT

Applied methodologies

Technological innovation

Competitiveness and sustainability

planning