BUSINESS PLAN

BIO GAS
PARTICIPENTS:MARWA SHIEKH SHER AFGAN CHEEMA HAMZA ZAHEER NUMERA ALI HIRA AMJAD 2009-ag-1028 2009-ag-1376 2009-ag-1375 2009-ag-992 2009-ag-1275

Table of Contents
1... Executive summary----------------------------------------------------------------- 1 & 2

3.1 Company profile--------------------------------------------------------- 3

3.2 Products and Services -------------------------------------------------------------3 3.3 Size and form of Business --------------------------------------------------------3 3.4 Office Equipment and Personnel-------------------------------------------------3 3.5 The Entrepreneurs------------------------------------------------------------------3

4.1 Vision ------------------------------------------------------------------------------4

4.2 Mission-------------------------------------------------------------------------------4 4.3 Market need--------------------------------------------------------------------------4 4.4 The problem----------------------------------------------------------------------- 4

5. Situation analysis-------------------------------------------------- 5
5.1 POLITICAL------------------------------------------------------------------------5 5.2 ECONOMICAL--------------------------------------------------------------------5

6.1 Social------------------------------------------------------------------------------ 6 6.2 Technological-------------------------------------------------------------6 7. Industry Analysis--------------------------------------------------------------7

7.1 Energy Supply & Demand------------------------------------------------------------7

8.1 Competition----------------------------------------------------------------------------8
8.2 Current Trends----------------------------------------------------------------- 8 8.3 Environment------------------------------------------------------------------- 8

9. SWOT ANALYSIS---------------------------------------------------------------9 9.1 Strengths------------------------------------------------------------9 9.2 Weaknesses--------------------------------------------------------9 10.1 Opportunities-----------------------------------------------------------------10 10.2 Threats-----------------------------------------------------------10

10.3 Segmentation & targeting--------------------------------------------------10

11.1 POSITIONING---------------------------------------------------------------11 11.2 Slogan-------------------------------------------------------------11 11.3 Service differentiation------------------------------------------11 11.4 Image differentiation--------------------------------------------11

11.5 4Ps--------------------------------------------------------------11
11.6 Product---------------------------------------------------------------------11

11.7 Level of products---------------------------------------------------------11 11.8 Price------------------------------------------------------------------------11 11.9 Placement------------------------------------------------------------------11 12.1 Promotional Mix-------------------------------------------------------------12 12.2 Marketing Strategy------------------------------------------------------12 12.3 Marketing Objectives---------------------------------------------------12 12.4 Production Plan Biogas generations------------------------------12 12.5 General factors which influence biogas production-------------------12

13. BIO GAS Generation Process-----------------------------------------13 14. Management plan--------------------------------------------------14

14.1 Form of Business--------------------------------------------------------14 14.2 Identification of the members------------------------------------------14 14.3 Board of Directors-------------------------------------------------------14
15. `Roles and Responsibilities of the Members------------------------------15

16.1 REWARD STRUCTURE--------------------------------------------------16

16.1.1Financial Rewards--------------------------------------------------------------------16 16.1.2 Others Rewards-----------------------------------------------------------------------16 16.1.3 Working Hours------------------------------------------------------------------------16 16.2 Lunch Hours-----------------------------------------------------------------------------16 16.3 Leave Schedule-------------------------------------------------------------------------16 16.4 Succession Planning--------------------------------------------------------------------16 16.5 Training----------------------------------------------------------------------------------16

17. Financial plan------------------------------------------------------------------17

18. Pro Forma Income Statement-------------------------------------------------18

19.1 Pro forma Balance sheet--------------------------------------------------------------------19

20. Risk Assessment-------------------------------------------------20

20.1 Level of Risks---------------------------------------------------------20
20.2 Product and Execution Risk------------------------------------------------------20 20.3 Financial and control Risk---------------------------------------------------------20

20.4 CONCLUSION-------------------------------------------------------20

Executive Summary
Perennial Power is a Faisalabad based startup company dedicated to providing a cost effective renewable energy source Biogas in the form of different products, categorized according to different consumption patterns that will be extremely beneficial for our target customers in the face of this severe energy crisis in the country. The product offerings of the company include Biogas for households, Electricity for industry and Biogas for transportation. The company is also aimed at providing consultancy services regarding the integrated energy solutions by pursuing the strategy of continued Research and Development. The company was formed in 2008 and currently has 7 members. The companys name truly reflects the nature of the business, which is to provide the energy source that is never ending. The companys management team consists of the MBA students having specializations in the fields of Human Resource Management, Finance and Management Information System. 3.1The main reasons for the initiative taken by the company are to capitalize on the opportunity of providing alternative energy sources to the consumers, the recognition of the fact that biogas technology is progressive and the demographic changes in the consumer demands to use more cost effective energy intensive products. 3.2By pursuing this business the company is aimed to introduce the solutions for reducing dependence on the energy imports and thus contributing the economy in a very positive way, while at the same time to further our efforts for making environment friendly products and having a very beneficial output from the waste. So, the company is pursuing the project which is not only socially acceptable but at the same quite profitable as shown by its economic feasibility. The initial capital required for the establishment and operations of the company is Rs. 31 million. In the first full year of operation, the company has estimated to reach Rs.75 million of sales. The analysts project that the sales will grow to 35% a year within the next 3 years, with the gross profit margin of 45%. The payback period of the project is four years. The companys values include quality, trust, respect for teammates and betterment of environment. The company intends to become a pioneer, for producing biogas on the commercial level in Pakistan, by introducing and expanding its diversified products and geographical coverage with the passage of time. The perennial power company organization is based on modern management structure comprises on two committees EXCOM and MANCOM. EXCOM (Executive committee) comprises on head of the departments and MANCON (Management committee) comprises on functional management

who are looking day to day activities of the organization. The company is applying the HR practices for the betterments of its employees. The target market for Perennial Power Company is considered to be the villages closer to the companys production plant at the initial level. In addition to this the companys major customers include WAPDA and other factories located near the production site. Currently, the company is not expected to face any kind of direct competition for biogas production, at least at the commercial level. For the future, the company believes that it would be able to compete effectively because of its high quality products, dedicated workforce, effective planning and continued R&D. To increase the public awareness about the venture, the company has decided to use word of mouth, education sponsorship programs and radio advertising as the prime sources. The company, at the initial level, plans to use 6,500 cubic meters of animal manure and 4,200 1 cubic meters water as the input. After producing the required amount of biogas from this input the remainder or bio slurry can be used as the fertilizer, making this process even more beneficial and profitable because this can be sold at the reasonable cost, which then can be utilized for covering the input cost of Perennial Power Company. For the efficiency and timeliness of its operations while at the same time for ensuring the appropriate control over the production process, the company is aimed at using Information Technology as a competitive edge. In this regard, it has decided to use customized software to control the whole production process in the highly effective and efficient manner with the great accuracy. In addition to this, the internal computer network is established for the close coordination between the production and the technical staff while at the same time the external networks and internet would be utilized, especially by R&D personnel, in order to keep themselves current about the latest trends and developments in the environment and provide their recommendations and suggestions to the top management and operational staff accordingly. The R&D department is also in close collaboration with Pakistan Council of Renewable Energy Technologies (PCRET) for having the information about the latest research and development being done in the sector of alternative and cost-effective methods of producing biogas. The physical plant of the company for the biogas production is installed at the Burleb Sewage Canal, Sargodha Road, Faisalabad. The total area covered by this plant installation is 8 acres and is acquired at the lease of per acre per annum. The machinery and equipment required for the process include Digesters, Gas chamber, 15 Turbines, Pressure Control System, Cylindrical Purification System, Bacteria Checking Machines, Container Trucks, Process Control System. With reference to companys manufacturing facility the whole gas production process is done by the Perennial Power Company and no part of the production is subcontracted to some other entity. The company receives the input for the biogas production process from Adil Dairy Farm, Shoukat Dairy Farm, and 3000 small farmers, Vegetable Market, Dead Animals, Sewage Lines and Bhains Colony. The company has an initial risk of financing and product execution while other risks are not much concern to the greater extent. The company is doing business in a suitable environment

where the chances of success are very high.

3.1 Company profile

Perennial Power Company, will be located in Faisalabad, is basically a startup venture for producing
biogas at the commercial level taking biomass and other manure as the input and at the same time providing integrated energy solutions to the end consumers and society in a very economical and environment friendly way. The objective of this company is to provide biogas energy to its customers at the lower cost than other renewable energy resources while at the same time to preserve our environment by recycling the waste to produce beneficial products.

Name of product: GREEN AND CLEAN ENERGY Name of company: PERENNIAL POWER COMPANY Address of company: NISHATABAD ROAD WEST FAISALABAD

3.2 Products and Services:The products and services that will be offered are categorized according to different segments of consumptions consisting of; Industry, household Transportation. The offerings in this regard will include biogas for household use as well provide to industry at initial stage, bio fuel for the vehicles named as Bio CNG cylinders, bio energy for electricity generation and the consultancy services for house hold energy solutions.

3.3 Size

and form of Business:-

The key factor determining the success of the business is that it is going to operate in the sector where the demand of the energy is considered to be ever increasing and everlasting, which is also depicted by the name of the company.

3.4 Office Equipment and Personnel:The company has more than 30 employees working in three shifts; whole process of production is carried through the support of technology.

3.5 The Entrepreneurs:The companys name truly reflects the nature of the business, which is to provide the energy source that is never ending. The companys management team consists of the MBA students having specializations in the fields of Marketing, Human Resource Management, Finance and Management Information System.

Website: www. Perennial power.com

4.1 Vision:Changing life styles with economic and unique available resources

4.2 Mission:Our mission is to provide integrated energy solutions to our customers in an environmentally friendly and socially responsible manner. In other words, we will strive hard to provide power in a way that is sustainable in the long term. We believe it is essential not only to make profits but also to care about people and protect the environment. We will lead by example through a commitment that empowers our customers ensuring the excellence at all levels of our operations, performance, products and services.Simultaneously,actively contribute towards welfare of society and social uplift of the under privileged section of the community

4.3 Market need:Pakistan is one of the developing countries facing a huge demand in the energy sector due to the trends of improving lifestyles and growing population. However, sufficient number of industries cant be set up especially in rural areas so far due to scarcity of energy supply. Security and affordability of energy supplies are key inputs to ensure sustainable development. Equitable access to energy constitutes a basic element of effort to combat poverty and sustained economic activity. Pakistan has predominantly rural society where biomass fuel is the major source for cooking and rural women are primarily involved in biomass collection and use.

4.4 The problem:Excessive use of biomass energy is not only a threat to the environment due to the high use of forest resources, but also results in a drop off in the agricultural productivity due to the diversion of agricultural residues and animal waste from farms to fireplace. This situation is worsened by the low level efficiency of these fuels, which are a health hazard due to increased air population, particularly to rural women who are the managers, producers and users of energy at the household level.

5. Situation analysis of Perennial Power Company

Environmental analysis 5.1 Political:Presently, the political scenario of Pakistan is quite favorable for using renewable energy resource in order to eliminate the severe energy crisis in Pakistan. One of the major problems facing the new government, the energy crisis, is intense, costly and multidimensional. The infuriating electricity and gas disruptions and soaring fuel prices in turn pushing the cost of living have made life very difficult for the people of Pakistan. The even before it took office the new government was greeted with two jumps in fuel prices, accounting for the 15% in two weeks. Meanwhile crude oil prices have been registering all-time-highs, shooting 40% in the past year. The endless reality is that this global spike will somehow have to be accommodated in the energy prices in Pakistan. In this crucial situation, the government now understands that, in order to tackle the existing energy crisis and ensure a prosperous energy future, the backbone of the future energy policies would have to be reliance on domestic resources (Biogas, Hydropower, Solar and Wind energy) as well as the energy conservation. In this regard, government made a policy commitment to encourage the biogas installation plants in the country along with the 75% interest subsidy on loan from the federal government of Pakistan.

5.2 Economical:Energy sector is one the most important sectors driving the economy of Pakistan and thats why some of the latest fluctuations due to the energy crisis in Pakistan are having an adverse impact on the economy of Pakistan coupled with the widening gap between demand and supply in this particular sector. A huge shock for the present economic condition is that international oil prices have not only broken all records and are touching the new heights. Moreover, speculators all around the world expect oil prices to touch $110 per barrel in the medium term. With concerns over many issues oil prices dont see any other way but to shoot upwards. The macro economic implications of supply shock induced energy crisis are large, because energy is the resource used to exploit all other resources. Pakistans Medium Term Development Framework (MTDF) 20052010 sets out a challenging program to achieve 8% annual growth in GDP. Associated growth in energy consumption is forecasted at 12% a year and this expected growth would have drastic pressure on all sectors of Pakistans primary energy supplies. Pakistan has a deficit of fossils or hydrocarbon sources of energy to cover up the deficit; it depends upon importing crude oil at an enormous cost from its meager forex reserves. The need of crude oil is on an increase because of an improved lifestyle, which has necessitated the use of vehicles are cars for transportation. Imports of crude oil at about $110 per barrel increased the trade deficit and the current account deficit. In addition to this, being an energy importer, the shooting up dollar value is also posing a huge threat to the economy. In view of Pakistans meager resources of fossil fuels, the dependence on imported petroleum is expected to increase, therefore putting the economy under great strain. In this way, an alternate source like nuclear,

solar, wind and biomass energy would have to be explored. But it should be kept in close consideration of the environment degradation problems and processes, which are environment friendly, should be adopted.

6.1 Social:Pakistan has predominantly rural society where biomass fuel is the major source for cooking and rural women are primarily involved in biomass collection and use. Biogas energy has potential to save the metabolic energy and the time of women, which could be used for other productive activities that enable women to be socially, psychologically and politically empowered. Their livelihoods are threatened due to their heavy workloads and deteriorating health conditions in the absence of good nutrition and health services. There are alternative energy resources (especially biogas) that offer significant potential in terms of reducing women drudgery and improving health conditions, allowing rural women to have enough time to be involved in income-generating, social and community development activities for their self-enhancement and empowerment. Often the beliefs, prejudices, habits, etc, prevailing in the society pose problems for promotion of the biogas technology .Factors such as educational background and income of the beneficiaries may also affect the speed of BT adoption. This has to be tackled in two ways: (1) Weve to try to introduce the plant models most suited for the area and (2) devise suitable training of extension workers to enable them to take the message of BT to the people.

6.2 Technological:Pakistan Council of Renewable Energy Technologies (PCRET) has been recently established by merging National Institute of Silicon Technology (NIST) and Pakistan Council for Appropriate Technologies (PCAT). PCRET has been assigned the responsibility of Research and Development dissemination and provides trainings to promote renewable energy technologies in the country and their main areas of functions include providing all the information and technical assistance regarding biogas plants installations in Pakistan. The technology change rates, with respect to biogas plants, is non-existent and therefore there is no such problem fostered in the installation of the biogas plants in the country as well as much of the technological help and incentives are being provided by the PCRET. In addition to this, leaflets, calendars, posters and manuals written in the local language can be effectively utilized for creating the awareness regarding the benefits and uses of biogas. Pakistan being agriculture based, breeds sufficient live stock to produce enough animal waste for the production of biogas. Currently, all such animal waste is burned in the dry form as the domestic source of energy. The same can be used for producing biogas on commercial bases with effective utilization of technology. There is quite a potential for using biogas technology as rural energy though out the country by network of community biogas plants.

7. Industry Analysis
Pakistan has one of the worlds fastest growing economies and energy resources development will be essential to increase its ability to sustain the high growth rates through the 1990s.Three critical characteristics must be considered in analyzing Pakistans energy sector. A complex range of energy resources is available and each plays a different role in meeting the national needs. The gap between domestic energy supply and demand is widening because of inadequate production, poor transmission and distribution system and inefficient energy use. Exploiting the energy resources creates the environmental hazards that threaten the longterm development prospects and social welfare.

Gaseous fuels like Natural gas; Biogas has been explored as an alternative to petrol and diesel to lighten the import burden. Natural gas in compressed form is already being used successfully as vehicle fuel. Pakistans population is growing at a very rapid pace and more than half of this population lives in rural areas, therefore the environmental issues like greenhouse effect and correct waste disposal methods as well as providing energy for all the people in rural areas is gaining much attention in the current scenario.

7.1 Energy Supply & Demand:Pakistans recent economic acceleration together with rapid rates of population growth is having a significant impact on the countrys energy supply and demand balances. The current situation in the Pakistans energy sector is that the important energy resources have been depleted and whatever resources are available are simply too expensive to buy or already acquired by the countries which had planned and acted long time ago. The current situation in Pakistan is that it is producing 64,000 bbl/d and has ambitious plans to increase its current output to reach 100,000 bbl/d in 2010. According to Oil and Gas Journal (OGJ), Pakistan had 28.8 million barrels of proven conventional oil reserves as of 1 Jan 2005. Consumption of petroleum products is estimated at 351.4 thousands bbl/d. Today, the primary energy supplies are not enough to meet even the present demand. So, Pakistan, like other developing countries of the region, is facing is facing the serious challenge of energy deficit. There is enough livestock for producing biogas up to 16 million cubic meters a day and it can be very effectively used as fuel. Sector wise consumption of the Natural gas is given as below:

Sector Power Sector Fertilizer Industrial Household Commercial Cement

Natural gas consumption 35.4% 23.4% 18.9% 17.6% 2.8% 2.5%

8.1 Competition:On the commercial level production of biogas in the country there is no competition at all in the market. There are some of the biogas production projects already running but they all are on the very small-scale level. So, Perennial Power Company would not face any kind of direct competition in the commercial sector. The indirect competition in the energy sector is being fostered by the other alternative renewable energy resources including natural gas, firewood, wind energy, solar energy, and coal and petroleum products. But due to its cost-effective and environment friendly nature, biogas plant at the commercial level is going to have a firm standing in the presence of this indirect competition.

8.2 Current Trends:The following factors are contributing to the sharply rising demand for the conventional energy supplies in Pakistan: Industrialization. Urbanization. Population growth. Shift in consumer demands towards energy intensive products.

8.3 Environment:The Govt. of Pakistan is attempting to raise the living standards of its citizens and has meant that the economical development has largely taken precedence over environmental issues. Unchecked use of hazardous chemicals, vehicle emissions and industrial activity has contributed to a number of environmental and a health hazard; chief among them is water pollution. Much of the country suffers from a lack of healthy and clean drinking water due to industrial waste and agricultural runoff that contaminates drinking water supplies. The overall impact of the biogas technology in terms of environmental conservation is considerably beneficial as the process provides an environmentally sound means of managing animal and plant wastes. An important advantage of the biogas programme is that it results in considerable reduction in fuel wood demand especially in the rural areas. The substitution of fuel wood by biogas leads to three main benefits: Firstly, it slows down the deforestation trend, thus achieving numerous environmental benefits. Secondly, it generates less air pollution by the combustion of biogas instead of wood or animal dung. Finally, we get natural fertilizer (manure) from biogas sludge, which is why biogas offers a safe and clean source of alternate energy.

8.4 Availability of Biomass:Availability of Biomass in Pakistan in 50,000 tons garbage collected in the major cities, millions of gallons of wastewater, millions of cotton stalks and rice husk etc.It is very economical and

friendly way of disposing off the municipal waste that is collected in tons every day in the big cities but unfortunately no efforts have been made in this particular direction in Pakistan.

9. SWOT ANALYSIS 9.1 Strengths: Low price Environment Friendly Initiative step for alternative energy Qualified management Government and Public Support No complexities in production of Biogas Agriculture support No harmful material waste No pollution Ozone Friendly Use of Animal Wastage

9.2 Weaknesses:
Product rate is low No more outlets Expensive generators for electricity Special technical staff Financial constraints

10.1 Opportunities: Being Agrarian country, abundant ingredients for biogas. Kisan Dost Lease Finance Facility available for the installation of biogas plant. Less labor than tree felling. Economically feasible and socially acceptable concept. Huge potential of around 5 million houses. Great backup from Biogas Support Program.

10.2 Threats: Fierce competition with gas grid extensions. Antibiotics used in the feed of animals can cause difficulties in production. Forest areas in Pakistan hardly serve as the carbon sink.

10.3 Segmentation & targeting:GEOGRAPHIC

World region Country Cities Climate Density South Asia Pakistan All major cities of Punjab Humid climate Urban and rural

DEMOGRAPHIC
Age Gender Family size Family life cycle Income Occupation Race Applicable in every age group Male, female 1-2,3-4,5 plus Married, Unmarried Rs.5000 plus From lower to upper class Asian

PSYCHOGRAPHIC
Social class Lifestyle Lower class to upper class. Actualizes,fulfilled,believers,achievers,strivers, Experiences makers and strugglers

BEHAVIOURAL
Benefits User status Loyalty status Cheap,24/7availability, First time user Optimistic

11.1 POSITIONING:Transformation of useless wastage into cheap and effective energy!

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11.2 Slogan:Defining the Future

11.3 Service differentiation:

Services provided by our specialist consultants are added benefit of buying product from the distributors!

11.4 Image differentiation:

Brands innovative name, logo and symbol are its differentiation features.

11.5 4Ps
11.6 Product:Our basic & innovative product bio gas!

11.7 Level of products:Core Benefits Basic product Augmented Product Potential Product Cheap energy Bio gas Consultancy and after sales services like replacement of cylinders Different sizes of cylinders will be available in future

11.8 Price:
Presently PPC is following brand pricing. Our per unit price will be 8.05. Our whole promotion is based upon our price strategy. We have decided to compete by our low price. It will increase our production and sale and ultimately increase our revenues. For Biogas Cylinders and Electricity we have competitive prices. For these two products we have cost plus profit margin model. We will add 25% profit margin in cost of these two products. We will offer Biogas based CNG at 25% less price in relation to LPG prices prevailing in the market.

11.9 Placement:Placement is important factor; we will use vehicles to deliver the Biogas in Cylinders form to the end consumers. It includes all the companys activities which make the product available to the

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market. We will provide Biogas Electricity to WAPDA from our production plant. We will provide Biogas to nearly located industries through the pipeline.

12.1 Promotional Mix:

Company is following four tools of promotional mix It is our goal to spread information Biogas for better Life in depth of customers mind. And we will use different methods: Banners Personal Selling Awareness programs Events Radio Public Relations (Words of Mouth)

12.2 Marketing Strategy 12.3 Marketing Objectives: Customer value and satisfaction Creating strong position Creating strong distribution channel To achieve better market share Try to increase growth rate To provide high quality

12.4 Production Plan Biogas generation

Biogas develops through anaerobic fermentation. During this process, organic substances are decomposed by microorganisms. The substances added to the system produce the biogas in an oxygen-free environment. In the first step, the organic substances are divided into molecular components (sugar, amino acids, glycerin and fatty acids). Microorganisms convert these intermediate products into hydrogen and carbon dioxide, which are then transformed into methane and water according to the Equation: CO2 + 4H2 ----> CH4 + 2H2O

12.5 General factors which influence biogas production:

The production of biogas is a natural process that functions in suited facilities. The following factors must be considered during biogas production: Organic substrates must be able to be biologically decomposed by microorganisms. The substrate should contain only a minimum of microbiological restrictors.

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The temperature during the decomposing process must be within a certain range (35 to 55C). The pH-value should range from 6 to 8 the fermentation must take place in an area sealed off from air and light. The fermentation tank must be mixed at regular intervals.

BIO GAS Generation Process

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14. Management plan

14.1 Form of Business:The form of business is private limited and established under Companies Ordinance 1984. There are total seven (7) members in this organization and actively participating in the organizations activities.

14.2 Identification of the members:This business is private limited and all the members have contributed equal share of amount. All the members have equal shares in the company and are responsible for their respective activities as they are performing actively in the organization. The term of membership is on the basis of equal share of profits & losses and rewards and bonus are on the basis of the achievement in the respective area of responsibility.

14.3 Board of Directors:The members are also the members of the board of director. The board of director is comprised of one chairman who is selected by the members or board members and THREE board members.

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15. `Roles and Responsibilities of the Members: The responsibilities of directors may include: Review of operating and capital budget. Development of network for the efficient working of the organization. Resolving conflicts among all the managerial and departmental activities. Ensuring that the assets are in proper and efficient use of their own. Major task is decision making.

DESIGNATION
KEY RESPONSIBITIES:

(CHAIRMAN)

Smooth functioning of whole organizational departments, to overlook complete activities of the organization, build long term and short term strategies and policies. Salary: Rs. 70,000/DESIGNATION (HEAD OF MARKET&CONSULTANCY)
KEY RESPONSIBITIES: To handle sales, forecast sales, promotions and handle the service area of company which is consultancy for other biogas plants.

Salary

Rs.30, 500/-

DESIGNATION

(HEAD OF R & D)

KEY RESPONSIBITIES: To understand the complexities of the biogas plant, find new better and efficient ways to produce gas and electricity, new and better plant designs for the further extension of the plant, to find better resources or raw material for quick and more production of biogas, give advices for new product introduction according to the better research and results.

Salary

Rs.45, 950/-

DESIGNATION (HEAD OF TECHNICAL FACILITY) KEY RESPONSIBITIES: To see the technicalities of the biogas plant, provide the engineers and technical staff the required type of material and help, technical changes in the biogas plant, interval inspection of the plant.
Salary Rs.40, 000/-

DESIGNATION (HEAD OF PRDUCTION AND OPERATIONS) KEY RESPONSIBITIES: Provide production facilities, over look the purchases and the raw material conditions; see the difficulties of distribution channels and the better resource for raw material, handle the activities of subordinates, provide them effective advices about the production and operation of the complete plant.
Salary Rs.15, 000/-

DESIGNATION

(HEAD OF FINANCE AND CONTROL)

KEY RESPONSIBITIES: Look at the financial position, activities and resources of the company, handle the books of accounts of the company, perform internal audit and annual external audit of the company, look at resources from finance is available, give advices according to the financial position to the chairman and the for further strategies of development or product diversification. Salary Rs.30.000/-

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DESIGNATION

(HEAD OF HR MGT.)

KEY RESPONSIBITIES: Handle the organizations human resource activities like recruiting, selection, orientation, performance appraisals, motivation, rewards and benefits to the employees, governmental obligations and regulations about the bio hazard and employees, employee safety and health issues. Check the balance of the employees in the organization for excessive and under employed workers. Salary Rs. 20,000/-

Key responsibilities of team of R&D

In research and development, technicians usually work in laboratories testing mechanical, electrical, chemical, pneumatic, hydraulic, thermal, or optical scientific principles. Typical employers include institutions, private industry, government, and the military. Working under the direction of an engineer, physicist, and chemist, or metallurgist, technicians use specialized equipment and materials to perform laboratory experiments. They help record data and analyze it using computers. They may also be responsible for periodic maintenance and repair of equipment.

16.1 REWARD STRUCTURE:There will be Extrinsic and Intrinsic rewards. 16.1.1Financial Rewards:
Conveyance allowance (will be 5% of basic salary) Medical allowance (will be 3% of basic salary) Education allowance for children

16.1.2 Others Rewards:Promotion Career Development Greater job freedom Participation in Decision making

16.1.3 Working Hours:9am to 6pm for Desk job 8.30am to 4.30pm for labor workers Shift 1 4.30pm to 12.30am for labor workers Shift 2 12.30am to 8.30a.m for labor workers Shift 3

16.2 Lunch Hours:1.30pm to 2.30pm for all workers

16.3 Leave Schedule:2 leaves will be sanctioned to all employees 16.4 Succession Planning:Out sourcing for lower management level For key position we will consider REPLACEMENT CHART 16.5 Training:On the job training for lower and middle management

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17. Financial plan

Manufacturing Budget of all Three products for 1st 3 Months

Jul
1.Electricity to WAPDA
Projected Sales(MW) "1 MW per day"

Aug
0.8 MW/day

Sep
0.8 MW/day

0 0 0 0 0

Ending inventory
Available for Sale

0 0 0
0.8 MW/day

0 0 0
0.8 MW/day

Less: Beginning Inventory

Production Required in Mega Watt 2. BIO compressed gas to Factories

Projected Sales (m3)
Ending inventory Available for Sale

0 0 0

1425 1425 1425

1430 1430 1430

Less: Beginning Inventory

Production Required

3. Bio CNG cylinders

Projected Sales(Cylinders) Ending inventory Available for Sale

0 0 0 0 0

2000 60 2060 50 2010

2200 50 2250 60 2190

Less: Beginning Inventory

Production Required

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18. Pro Forma Income Statement, Three Year Summary(in millions )

percent
sales
Less: Cost of goods sold Gross Profit
Less: Operating Expenses Salaries & Wages Office Supplies Insurance

Year1
79.53 44.74 34.79

Year2
156.63 88.81 68.51

Year 3
345.34 194.27 151.07

100 56.26 43.74

5.09 0.19 1.51 1.51 3.98 0.13 1.51

4.05 0.15 1.20 1.49 3.16 0.10 1.20

7.98 0.30 2.36 2.36 6.23 0.00 2.36

17.59 0.65 5.21 5.21 13.73 0.00 5.21

Depreciation
Fuel expenses Licensees Other

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Total operating expenses Profit before tax Tax at 35% Profit after tax

13.91 29.83 10.39 19.39

11.53 23.44 8.20 15.23

21.79 46.73 16.35 30.37

48.04 103.03 36.06 66.97

19.1 Pro forma Balance sheet for 3 years (millions)

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20. Risk Assessment

20.1 Level of Risks: Perennial Powers Company faces only execution and startup risks; there is no other risk except some level of financial and product execution risk. The overall environment is very helpful for the company operations and its sales. There is no market and product branding related risk for the company because the company is serving in the necessities of life which are going to be extinct in near future so the company has a great scope for its products and services. 20.2 Product and Execution Risk: This is the point of concern for the company at the initial level that companies estimate may be wrong and some major changes have to make for meeting the actual requirements. The gas estimation and generation is important in this whole process of energy generation. The some initial level changes have to make for efficient production. There is no direct competition and risk is attached with the company technology. 20.3 Financial and control Risk: Company faces the risk of capital arrangement in the start of business. The owners of the company committed to the Islamic mode of financing so there is lesser chance to obtain debt financing. The management of the company is inexperienced and some control risks are exists. The company is selling to WAPDA so, the major risk is of late payment.

20.4 CONCLUSION:There is large potential of biogas generation in Pakistan to make it an alternate fuel for vehicle. Biogas produced in large size biogas plants should be enriched before bottling for storage and mobile purpose, as enriched biogas has more calorific value and better fuel quality. Out of several methods of biogas enrichment, water scrubbing is found to be a simple, low-cost and suitable method for enrichment of biogas in rural areas. Overall, the study revealed that biogas enrichment and compression system is a profitable venture for rural areas due to availability of large quantity of cattle dung. The system is recommended to establish rural entrepreneurship for the effective utilization of local biomass resources for production of biogas energy in decentralized manner and sustainable rural development.

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Appendices
Technology:
Perennial powers focus on the technology that is useful for the efficient production and sales control. The whole process is control through specially design software.

Certificates required by the Perennial Powers Company

The perennial powers company is looking for the licenses to start the operations of the company and for the maintenance of quality and control. The company has applied for new licenses from the below described organizations and National Electricity and Power Regulatory Authority (NEPRA).

Forecasts and Financial Analysis

The details of forecasts and financial analysis are provided in the part of Financial Plan of this feasibility.

Generic Value Chain for Biogas