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15/18/08 IQ 2008 Contest Finalist © 2008 <author> & Innovation Q

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On-Tanker Oil-Spill Boom

Fastest spill response time

Lucas [email protected]

Wesley WaughJared HuntingtonTravis Stagnaro

Faculty Sponsor/Advisor: Prof. Cirovic

IQ Innovation Contest FinalistMay 18, 2008

IQ Innovation Contest FinalistMay 18, 2008


Product DescriptionProduct Description

On-tanker rapid-deploy oil containment boom

35/18/08 IQ 2008 Contest Finalist © 2008 Whipple, Waugh & Innovation Q

Product ApplicationProduct Application

• Each oil tanker will be retrofitted with our boom

• In the event of a spill, the tanker staff will respond immediately by deploying the boom

• Nearly all oil will be contained and recoverable

• Only one recovered oil spill will save the customer hundreds of millions of dollars


Key InnovationKey Innovation

• Current containment methods respond in hours; ours takes minutes.

• Faster response means more oil is contained

July 21, 2006 August 3, 2006


Product Validation Product Validation

• We have built a prototype design of ~1/1000 scale and confirmed its success containing oil

• Next comes a larger, self-inflating model using production materials

• This new prototype will demonstrate the speed at which oil can be contained


Project LogisticsProject Logistics

• Within six months, we will have a production design prototype; within a year, a proof-of-design prototype

• The boom is fully scalable – production is identical for all tankers

• There are 7.8 million meters of potential oil tanker circumference


Resources and StaffingResources and Staffing

• Needed Staff:– Chemist– Manufacturing engineers– Manufacturing and delivery staff– Installation and maintenance technicians

• Start-up capital for:– Facilities– Materials– Manufacturing equipment


The MarketThe Market

• Customers are primarily oil-shipping companies, but also include others who ship floating cargo

• Reducing monetary and environmental damages improve public image and reduce cost of business

• Other similar products cannot compete with our deployment times or convenience


Market OpportunityMarket Opportunity

• 10,000 oil tankers are currently in service; all need our boom. We expect customers to install the boom on their entire fleets within 10 years

• Considerable savings to customers:

Oil Spilled (barrels) Retail Cost Fees and Fines

Exxon Valdez 300,000 $375,000 $5,000,000,000

ABT Summer 2,000,000 $250,000,000

There have been 34 oil spills larger than Exxon Valdez


Go-to-Market andBusiness Development

Go-to-Market andBusiness Development

• To sell the product, we will market to members of the ITOPF (International Tanker Owners Pollution Federation)

• Early adopters will receive a public-image boost

• Distribution will be convenient because the product will be moving to major shipping ports – no over-land shipping


ROI: Return on InvestementROI: Return on Investement5 Year P & L Year 1 Year 2 Year 3 Year 4 Year 5 5 Year TotalsSalesUnits sold in Year 5 15 40 100 300 Average Selling Price $200,000.00 $180,000.00 $170,000.00 $160,000.00 $150,000.00Average Cost/Unit $40,000.00 $38,000.00 $36,000.00 $34,000.00 $32,000.00

Revenue $1,000,000 $2,700,000 $6,800,000 $16,000,000 $45,000,000 $71,500,000

Cost of Goods Sold

Product Cost ($200,000) ($570,000) ($1,440,000) ($3,400,000) ($9,600,000) ($15,210,000)Other Manuf. Costs ($50,000) ($130,000) ($500,000) ($1,500,000) ($5,000,000) ($7,180,000)

Gross Profit $750,000 $2,000,000 $4,860,000 $11,100,000 $30,400,000 $49,110,000

Operating Expenses (include salaries)Engineering and Development 300,000$ 400,000$ 570,000$ 900,000$ 1,100,000$ 3,270,000

Sales & Marketing 210,000$ 300,000$ 450,000$ 750,000$ 1,000,000$ 2,710,000General and Admin 200,000$ 550,000$ 850,000$ 2,000,000$ 2,500,000$ 6,100,000Manufacturing Wages 280,000$ 800,000$ 2,000,000$ 4,200,000$ 13,860,000$ 21,140,000

990,000$ 2,050,000$ 3,870,000$ 7,850,000$ 18,460,000$ 33,220,000$

Income Before Taxes (240,000)$ (50,000)$ 990,000$ 3,250,000$ 11,940,000$ 15,890,000$

Outside Investment (est. maximum) 1,240,000$ 1,750,000$ 2,870,000$ 5,900,000$ 18,050,000$ 13,860,000$


ConclusionsConclusions

• Our product offers significant improvements in oil containment response time and recovery rates

• Our product will pay for itself within one spill situation

• Everyone wins – environmentalists, oil companies, the consumer, and our company


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1 5/18/08 IQ 2008 Contest Finalist © 2008 & Innovation Q Innovation Quest – Learn by Doing…Give...

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