Final SIP Report on marketing of engineering services

8/12/2019 Final SIP Report on marketing of engineering services

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A REPORT

ON

Marketing of EngineeringServices

By

Bhagyashree Pathade

13BSPHH010143


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TecSo GlobalA REPORT

ON

Marketing of EngineeringServicesBy

Bhagyashree Pathade

13BSPHH010143

TecSo GlobalA report is submitted in partial fulfilment of

The requirements of


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PGPM Program of

IBS HyderabadDate of Submission: 16thMay, 2014

AuthorizationThis is to certify that this report is submitted in partial fulfilment of therequirements of PGPM program of ICFAI Business School (IBS), Gurgaon. Thisreport document titled: Marketing of Engineering Services is done byBhagyashree Pathade as part of the completion of the study at TecSo ProjectsLtd. during her Internship program under the guidance of Mr. Kartikey Hariyani,Director (TecSo Global) as Company Guide and Mr. VenkateshwaraRaoKorasiga, Professor at IBS Hyderabad.


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ACKNOWLEDGEMENTThe satiation and euphoria that accompany the successful completion of theproject would be incomplete without the mention of the people who made itpossible.I would like to take the opportunity to thank and express my deep sense ofgratitude to my company guide Mr Kartikey Hariyani and Mrs. Kinnari Hariyani forgiving me this wonderful opportunity to work with TecSo Projects Ltd. and to gainvaluable learning experience from it. I am greatly indebted to my faculty guideProf VenkateshwaraRao Korasiga for providing me continuous guidance, insightsand encouragement which acted as a continuous source of support for me duringthis entire period.I would also like to thank all the staff members of TecSo Projects Ltd. who havehelped me indirectly and supported me


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I hope that I can build upon the experience and knowledge that I have gainedand make a valuable contribution ahead.

SYNOPSIS

I was working as an intern at TecSo Global, an integrated engineering and global

sourcing company. It is a leading company in the area of Engineering Services and

Global Sourcing for the Automotive, Off-highway Vehicles, Industrial Machineries and

Equipments. Initially I had to understand the company profile so that it would help me

later in research of potential markets and customers for the company.

I had been assigned the task of searching potential market and clients for engineering

division of the company in India and outside India. I had to collect the data base of the

potential clients, do a background search of these companies in terms of product they

make, their clients, their branches across the world and the turnover of the company.

Later I will had to make cold calling to these potential clients, explaining them what we

as TecSo Global had to offer to them and our expertise in the field, our previous

successful projects and accomplishments and how we can

I had to focus on the companies which manufactures engineering and construction

products so that TecSo Global could provide the service of designing the products or


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field validation, external test certification, CE marking & approval of the products and

even manufacture these products

For accomplishing these tasks I had to do intense web based research in the right

direction. There is lot of information given on the web but it is important to correctly

identify the required valid information. But it has its own limitations also.

Apart from this the company is also planning to expand itself into industrial solution. I

had been focusing on agriculture supply chain. India, the world's second largest

producer offruits and vegetables, is throwing away fresh produce worth Rs 13,300crore every year because of the country's lack of adequate cold storage facilities and

refrigerated transport, according to data compiled in a new report by Emerson ClimateTechnologies India.Indian Cold Chain industry is expected to grow at a CAGR of 28%

over the next 4 years and reach a market size of USD 13 Bl in 2017. The Study has

estimated the cold storage requirements of 61.13 million tons in the country. The

present capacity of cold storage has been worked out at 23.51 million MT only. The

cold storage gap of about 38 million metric tons has been estimated. Thus these

scenario leads to highly potential market where company can grow itself with its

knowledge of technical expertise. While the technical team was working on the design

and technical requirements of cold storage I had to look at the market requirements for

cold storage. I had had to collect data state wise, search for different government

benefits and schemes and bank loan schemes

Next my task was to work on an ERP software, myERP, I had to understand its

functioning. Initially I used dummy data ti understand the software, later I used the data

which I had collected after doing my research. Since there were some flaws in myERP,

I had to find a new ERP software. Finally I found the right ERP system called Vtiger. I

even worked on a CRM called ZOHO CRM.

Next came the task of research on Bio-fuel, Pellets.By 2035, global energy consumptionis projected to grow by 41% and, in our view, consumption of liquid fuels is expected to rise by

20% - almost 15 million more barrels per day. With the worlds population projected to reach
http://economictimes.indiatimes.com/topic/fruitshttp://economictimes.indiatimes.com/topic/fruitshttp://economictimes.indiatimes.com/topic/Emerson%20Climate%20Technologies%20Indiahttp://economictimes.indiatimes.com/topic/Emerson%20Climate%20Technologies%20Indiahttp://economictimes.indiatimes.com/topic/Emerson%20Climate%20Technologies%20Indiahttp://economictimes.indiatimes.com/topic/Emerson%20Climate%20Technologies%20Indiahttp://economictimes.indiatimes.com/topic/Emerson%20Climate%20Technologies%20Indiahttp://economictimes.indiatimes.com/topic/fruits


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8.3 billion by then, an additional 1.3 billion people will need energy. To meet this demand a

diverse energy mix is needed. This is where biofuels can help; by 2035 the share of biofuels

transport demand is expected to grow from 2.5% to 4% (by energy).

Finally came the task of handing over the position of Marketing to the new marketing team.

For this I had to consolidate all the data that I had collected over the period of my internship. I

had to update the Marketing Manual according to the changes that were done during the

period.

The company also looks well after its employees and their personal development.

Every Saturday it organizes a presentation and a discussion on particular topic which

has to be presented by the employees thus trying to improve the communication skillsand interaction amongst the employees.

Thus even I had a major role in helping the expansion of the company and its growth.

Not just the company but I as an intern is learning the various marketing strategies and

understanding the markets .As an individual, being a fresher I am learning the

corporate world and how it works and most importantly Time Management


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TABLE OF CONTENTS

Authorisation iii

Acknowledgments.iv

Synopsis...v

1. TecSo Projects Ltd.-AN INTRODUCTION.3

1.1 Objective of the internship.... .6

1.2 Action Plan....6

1.3 Limitations.6

2. B2B LEADS

GENERATION...7

3. CRM AND ERP

SYATEMS9

4. MARKETING THROUGH

FACEBOOK...12

5. REVAMPING THE CORPORATE

PRESENTATION..14

6. A NEW TAGLINE FOR THE

COMPANY16

7. ABOUT US- FOR TECSO

WEBSITE18

8.

HANDOVER...20


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9. MARKET RESEAECH

REPORTS..23

9.1 A REPORT ON COLD STORAGE SENARIO IN

INDIA.24

9.2 A REPORT ON BIOMASS- WOOD

PALLETS.59

LIST OF FIGURESFigure 3.1 Sales procedure.11

Figure 4.1 myERP.12

Figure 4.2 ZOHO CRM.12

Figure 5.1 TecSo Global Facebook

page....14

Figure 5.2 Page Insights of TecSo Global Facebook

page..15

Figure 6.1 Old Corporate Presentation..16

Figure 6.2 New Corporate Presentation.17

Figure 7.1 New Tagline.19


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CHAPTER 1TECSO PROJECTS LIMITED- AN INTRODUCTIONTecSo Global, an integrated engineering and global sourcing company. It is a leading

company in the area of Engineering Services and Global Sourcing for the Automotive,

Off-highway Vehicles, Industrial Machineries and Equipments. A brief about company

profile which I could understand is as follows

Product Development Experience with reputed engineering OEMs world wide End-to-end product development & sourcing New product design, Analysis,

Build, Testing Validation, Certification, Vendor Development & Sourcing

Support.

Product Testing & Homologation/CE Marking field validation, external testcertification, CE marking & approval

Corporate Training to various designing professionals of different Industries onCAD/CAM and CAE

The Key Business Areas of TecSo Global are:

Engineering:Product Design

Finite Element Analysis (FEA)

Design Validation

Prototype Development

Fixture Design

Reverse Engineering


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Product Homologation

Global Sourcing

Product Cost Benchmarking

Inspection Services

Logistic Support

Production MethodsProduction Layout

Material Handling & warehousing

Assembly Planning & DesignPerformance and testing

Strain Gauging

Product Behavior Analysis

Products Audit

Quality Systems Evaluation

Customer Clinics

Product Benchmarking

QFD

The main engineering products on which the company focuses on are

Construction Equipment:


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BackhoeLoaders Wheeled Loader Excavators

Skid Steer Loaders

Road Building equipment:

Tandem Rollers Soil Compactors Asphalt Paver

Mobile Equipment

Telehandlers Hydraulic Mobile Cranes CrawlerCranes

Concrete Equipment

Concrete Batching Plants Transit Mixer Self-Loading Transit Mixers

Material Handling Equipment

EOT /Ladle/Cranes Forklifts Jib Cranes/ Pick N Carry Cranes

Machinery and equipment

PressureVessels Storage Tanks Molding Machine


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Apart from the engineering division it also has Solar Division, TecSolar.TecSolar is one

of the most competitive Solar Power/Renewable Energy Consulting, Engineering and

Contracting Company in India, with extensive experience and expertise in

solar/Renewable Energy Industry. Till now they have been associated as Solar Energy

consultants for about 110 MW Grid-connected Solar PV projects India.

With a broad array of renewable energy consulting services include project conception,

development and implementation, market entry strategies, strategic diversification, due

diligence, DPR(Detailed Project Report) for setting up Solar Pv projects.

Also it has an Education Department, SMARDCAD.SMARDCAD is a comprehensive

training solution provider for the professionals as well as the students. The training is

imparted through scientifically developed curriculum with the application of latest

versions of CAD/CAM/CAE software.

1.1 Objective of the Internship:

Identify market for engineering and industrial solutions Identify potential Strategic partners in engineering services Identify potential customers Support web-based promotion

1.2 Action Plan: Web-based research for both market and client search Client interaction Develop market reports

1.3 Limitations Even after contacting the clients, its not necessary that they would be

needing the engineering services that TecSo provides The economic conditions around the world influences the need for

engineering services required by other companies


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Government policies can create a hindrance for the execution of theproject.

CHAPTER 2MARKET RESEARCH ON INDUSTRIESI had to search companies manufacturing these machines so that TecSo Global could

provide them with engineering services like Product Design, Finite Element Analysis

(FEA), Design Validation, Prototype Development etc.

I had to go for Indian companies or the international companies which had their

manufacturing unit here in India. Then I had to search industries outside India. I even

visited many websites of trade fairs showcasing these products to get leads. Also had

to go through International Technology magazine (IVT) to search for leads. I could

generate more leads from online research. But even after finding many leads I had to

scrutinize all the leads and select the best possible prospective client. The selection

process was based on the range of products they manufacture, the financial conditionof the company etc.

Going step by step, I first searched the market for pressurized vessel tanks

manufacturers in India. I had divided them into different zones and found many

manufacturers in the western zone of India. Then I had to find the tank mount trailer

manufacturers again going through various websites I found around 16 manufacturers

from them I had to scrutinize the possible best clients. I was successful I getting a very

positive response from one of the manufacturers. Our guide Mr. Kartikey Hariyani had a

talk with Vasant Fabricators owner and soon we be having a deal.

Next the target was for tractor manufacturers in India and other international tractor

companies who have their manufacturing unit in India. There were 26 main tractor


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manufacturers in India, some of them Indian and some international. Some of the

renowned names in the field of tractor manufacturing were SONALIKA

INTERNATIONAL, TAFE LIMITED, MAHINDRA & MAHINDRA LIMITED, and JOHN

DEERE INDIA PRIVATE LIMITED etc. After having their details I had to call them and

inform them about the engineering services that TecSo global could provide for their

products. With the help of my company guide Mr. Kartikey Hariyani I got lot of guidance

on how to talk, what to talk, when to talk with the clients. Initially I talked with little

hesitation with the clients, but as I called more and more clients I was confident. With

each new call I could learn on exactly how to talk and what to talk. For this my initial

study of TecSo Corporate Profile helped me in explaining what TecSo global had to

offer to their company. Some clients were interested in the engineering services and

asked for corporate presentation, some were not interested and simply said they were

not in need of such services right now. In this corporate world I even learnt to hear

rejection and take each conversation positively and learn from it. I learnt to be patient

while talking with people and wait for some positive response from them.

Apart from this market research I was assigned the work of reading an agreement

between TecSo Global and other company and find the payment method. The terms

which I studied in subject of Law, helped me understand the agreement better. Then Ihad to understand the ERP application called myERP. There I understood how and

when a lead would get converted into opportunity and after getting an order we had to

make a sales order for that. This application was helpful in keeping a track of all the

clients and acted as a guiding tool for taking next step for marketing. Apart from

myERP application I even had to understand other CRM application called ZOHO,

Which had a few different applications. Right now I have to explore a few more ERP

applications and find the best application that can fit for the company.

In order to develop communication skills and presentation skills TecSo has taken up an

initiative for the overall development of its employees. Every Saturday any one of the

employee has to present on a given topic and later everyone has to participate in the

discussion. My collogue Mr. Shrirag Gaekwad and me had to present on the topic of


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stress management and soon in the coming week we have to teach how to use power

point Presentation and Prezi more effectively

Overall its been a very enriching experience working at TecSo global and looking

forward to learn as much as possible from here and apply whatever Ive learnt so far in

the books of management. Each day is a new learning experience

CHAPTER 3B2B LEADS GENERATION

Since my company Engineering Services Company, it was my job to generate B2B

leads. For creating leads I had to understand a few things firs, like

1) Understanding MarketUnderstanding my market is probably the number one aspect of any business tobusiness lead generation campaign. I had to understand my company, the offerings

the company are taking to market, who is the ideal customer, how they buy, why they

buy, when they buy, how often they buy, who influences the decision and why they

would buy from my company.

There were multiple markets to target or segment the market by different criteria. I

had to understand each of these markets or segments individually. For example if I

am talking with an international client I would give them the reference of other

international company with whom my company had worked with while communicating

with the new international clients.

I have to know what to communicate to get their interest, where to market the

company, what information to give, when to communicate etc.


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asked to be contacted by a sales person. A cold call is usually the start of a sales

process generally known as telemarketing.

Initially hesitant in calling the clients, but with the help of my company guide I could

gain knowledge on how to do cold calling, what keywords to use while talking,

referring the previous successful projects done by my company. Soon I gained the

confidence to talk with the potential clients


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The sales procedures are described in below steps:

Figure 3.1 Sales Procedure


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CHAPTER 4CRM AND ERP SYSTEM

At TecSo Global I also got the opportunity to work with

ERP and CRM softwares.I had to explore the

software, Identify its Pros and Cons, work on dummy

data to see actually how it works and even explore

other software and compare both. I worked with

myERP, ZOHO CRM and Vtiger. As I was learning

the software I came to know the following importance

of these software. Figure 4.1myERP

Identifying RolesAs sales team I have to contact the potential clients. If I navigate

through a company each time it lowers productivity. Therefore

itsimportant to identify the right client in the CRM database and saves from cold calling

and take to the right decision makers

Mark Progress Figure 4.2 ZOHO CRMAs sales member I need to understand whats working and whats not and if itsin line

with the objective of the company. With the help of CRM it was possible to see the

progress and the one which needed the renewal, hence will let me know if I am working

in the right direction

Sharing


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CRM isnt just a bank of information used for occasional reference, it should be

accessible to everyone related to the sales team. Collaborating over data keeps

everyone updated.

KnowledgeTo beat the competitors, we need to understand the market. With the use of CRM, I am

informed about who my potential clients, which sales are completed are and what is not

working. Thus the CRM is the foundation for market knowledge and this increases the

productivity.


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CHAPTER 5MARKETING THROUGH FACEBOOK

I was given the responsibility of handling Facebook page of TecSo Projects Ltd. Every

day I had to have some activity on Facebook page. It could be changing the cover

picture, putting some technology facts, success quotes, posting photos of events

happening in TecSo. In this way I had to keep the audience engaged and also increase

the likes of the page.

The main idea behind this was to promote the services provided by the company and

also the various activities that take place inside the company like a cricket match was

held between the TecSo employees and the SMARDCAD students, presentation given

by the employees on Saturdays in order to increase their confidence in giving

presentations and remove stage-fear. This was done not only to target the leads, the

companies, but also target the job-seekers who would like to become a part of the

company.

Figure 5.1 TecSo Global Facebook Page


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Figure 5.2 Page Insightsof TecSo Global page


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While working on Facebook page my knowledge of knowing Photoshop software came

to use. It helped me edit any image which was either cluttered or had unwanted

information. Also I used my knowledge of knowing photography to use by clicking each

and every activity taking place at TecSo Global. Thus keeping page active each and

every day. I had to post about all the services that the companies provides in the form of

images, each image had to be creative or attractive and in this Photoshop came as

immense help.

CHAPTER 6REVAMPING THE CORPORATE PRESENTATION


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Figure 6.1 Old TecSo Global Corporate Presentation


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Figure 6.2 New Corporate PresentationI was given the task of making TecSo Corporate presentation in Prezi, which was earlier

made in Power point. Making it in Prezi gave a totally new look. Again in making this

presentation I knowledge of using Photoshop came to great help.

CHAPTER 7A NEW TAGLINE FOR THE COMPANYEvery company needs to change its self in some or the other way. Revamping the logo

or website or changing the tag line etc. After changing the corporate presentation my

next task was searching for a new tag line for the company.

The main instructions I was given by my company guide were

a) To keep it SimpleIt should be simple enough with just 3-5 words and explaining the mission and vision

of the company.

b) Explain Your OfferingTaglines are not just simple and memorable, but they're also something else:

functional. A tagline should explain your product or service to potential customers or


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capture what it is that makes your business different than competitors' business.

TecSo was different in terms of Innovation

I had suggested the following tagline to the company

- Innovation at work- Serving innovative ideas- Where innovation gets built

- Powerhouse of Innovation- We believe in Innovation- We design Innovation- Building Innovation- Innovative people- Designing future- Delivering Innovation- Mastering innovation- Delivering Technology- Designing for future

After all these Taglines finally INNOVATION AT WORK was selected as a new Tagline

of the company.


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Figure 7.1 New tagline

CHAPTER 8ABOUT US - FOR TECSO WEBSITE

With the new tagline for the company and the change in the website outlook too, it

needed a change in the About Us of the company on the website also needed a

change. The following is the new About Us written for the website by me along with the


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guidance from my company Guide

With more than a decade of innovation in engineering and technology, at

TecSo Global we have endeavored to make the vision of our customer as

our sole mission. As I-EEE i.e. Innovation In Engineering, Energy and

Education, we strive every day to be a world-class organization for each of

three business divisions. While making sure our customers get more than

their expectations, we believe in listening to our customers and delivering

Quality in our service which is unmatched. Our strong belief in Execution -

as a discipline in to link three core processes - A Motivated Team, Strategy

and The Operating Plan has yielded great results in achieving customer's

delight.

f we do not lay out ourse lves in the service of mankind whom should weserve John Adams

CHAPTER 9REGISTERING IN BUSINESS PORTALSince the company had not registered into any of the business portals, it was my next

job to register the company to the various business portals like

- Yellow Pages


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- Mingle Box- Gortal- Think Vidhya- TataB2B- India Trade Zone- Trade Portal of IndiaThey asked for the company details like Address, contact Details, Services provided

by the company. But to provide verified details about the company, these portals call

the head of the company and verify. Only after verification it is published on their

Business Portal

CHAPTER 10HANDOVER


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With the experience as a role of intern, next came the role of handing over the

marketing department to the new employees. It was a totally new experience where I

had to act as a mentor to those new employees. I had to orient them about the

company, the way marketing is done at TecSo Global. For all this my experience of 3

months of internship came to great help. I gave them demo/training of cold calling.

Within 10 days Ive to guide the new marketing employees.


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REPORTSDuring my internship I had to do market research on COLDSTORAGE and BIOFUELS-PELLETS. Below are the 2 marketresearch reports. These research were result of intense webbased research


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REPORT ONCOLD STORAGE SENARIO IN INDIA


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INDEXSr. No. Topic Page No

1 CHAPTER 1: MARKET BACKGROUND:COLDSTORAGE

27

2 CHAPTER 2: PROJECT PROFILE FOR COLDSTORAGE

30

3 CHAPTER 3: COMPREHENSIVE NOTE ON CREATIONAND MANAGEMENT OF COLD CHAIN

INFRASTRUCTURE FOR AGRICULTURE & ALLIED

SECTOR

33

4 CHAPTER 4: SHORT TERM LOAN ON COLDSTRAGES 40

5 CONCLUSION 44


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List of IllustrationsList of figuresFigure1.1 Temperature controlled Vehicle Market..28Figure1.2 Cold chain Industry in India28Figure 1.3 Overall Facts..29 List of TablesTable 2.1 Funding Pattern.30Table3,1 Year wise cold storage capacity..33Table3.2 Requirement Scenario....34Table3.3 Cold Storage Capacity Gap....35


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There are 6300 total cold chain storages in India, with most of these facilities built in the 1960s

and suitable only for potatoes. Another flaw is that most cold storages are single-product

facilities, which narrows capacity utilization.

Cold chain industry: Future aheadIndian Cold Chain industry is expected to grow at

a CAGR of 28% over the next 4 years and reach a

market size of USD 13 Bn in 2017 and is largely

unorganized in nature. Thereby, presenting a

great opportunity for foreign companies.

Organized players contribute only 8%10%of the cold chain industry market

36% these cold storages in India havecapacity below 1,000 MT

Figure1.1 65% of Indias cold chain storage capacity is contributed by the states of

Uttar Pradesh and West Bengal With the current capacity only less than 11% of what is produced can be stored

According to industry estimates, approximately 104million metric tons of perishable produce is

transported between cities each year

Of this figure, about 100 million metric tons movesvia nonreefer mode and only four million metric tons

is transported by reefer Figure 1.2

Even though, India has about 250 reefer transportoperators (mostly small & non integrated firms) that


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transport perishable products and >30,000 refrigerated vehicles currently ply in India

Majority of the refrigerated vehicles (~80%) are utilized for milk and milk productstransportation

The Government of India recognizes that development of cold chain is an essential next step

in upgrading Indias food processing industry and therefore offers many incentives for

promoting growth


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CHAPTER 2PROJECT PROFILE FOR COLD STORAGECold Storages are essential for extending the shelf life, period of marketing, avoiding

glut, post-harvest losses reducing transport bottlenecks during peak period of

production and maintenance of quality of produce. It is, therefore, necessary that cold

storages are to be constructed in major producing as well as consuming centers. The

development of cold storages in the country has an important role in reducing the

wastages of the perishable commodities and providing remunerative prices to the

growers and to make available farm products to the consumers at competitive and

affordable prices.

LocationThe project may be located anywhere in the country suitably either near the producing

farms or consumer centers.

Project cost


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The

project cost for setting up of 5000 MT Cold Storage may be in the range of Rs.350 - 400

lakh, including cost of the land.

Quantum of subsidy

Back- ended subsidy @ 40% of the project cost for general and 55% in case of hilly and

scheduled areas for maximum storage capacity up to 5,000 per ton under the Govt. of

India / NHB Capital Investment Subsidy Scheme.Table 1 Funding pattern under Capital

Investment Subsidy Scheme

Indicative Project Outlay (Rs.in lakh)


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1. Land and land development - 50.00

2. Building and civil works - 85.00

3. Plant & machinery - 148.00

4. Utilities - 23.00

5. Technical Know-how - 2.00

6. Misc. fixed assets - 20.00

7. Pre-operative expenses - 17.00

8. Contingencies - 13.00

9. Margin money - 12.00

Total - 380.00

Unit size

The storage capacity envisaged for a multipurpose / multi commodity cold storage plant

is 5000 MT. Plant operation will be on an average of 10 hours / day. Approximately 1

acre of land of land is required for setting up of a multipurpose / multi commodity cold

storage plant.\

Protocol for Implementation of Technical Standards


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The Govt. of India vide letter F.No.45-64/2010-Hort. dated 25.2.2010 has informed that

all the project proposals received under various schemes of Department of Agriculture &

Cooperation for setting up of Cold Chain Projects should invariably comply to the

prescribed technical standards. The details of these standards are available on

Websitehttp://nhb.gov.in

Procedure for availing assistance

Societies willing to set up new cold storage /modernization / expansion of their existingcold storage are required to apply to National Horticulture Board (NHB) for issue of

LOI and send copy of DPR and data-sheet duly filled in by consulting engineer to

NHB. The DPR and data-sheet shall also be enclosed with the application by the

society to NCDC, seeking financial assistance.

Loan application forms are available with the office of Registrars of Cooperative

Societies/Regional Directorates/HEAD OFFICE of the NCDC at New Delhi.

Application forms can also be downloaded from NCDC website (http://ncdc.in).

CHAPTER 3COMPREHENSIVE NOTE ON CREATION ANDMANAGEMENT OF COLD CHAIN INFRASTRUCTUREFOR AGRICULTURE & ALLIED SECTORS
http://nhb.gov.in/http://nhb.gov.in/http://nhb.gov.in/http://ncdc.in/http://ncdc.in/http://ncdc.in/http://ncdc.in/http://nhb.gov.in/


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Availability of Cold StoragesCold Storage development in India from the year 2004 to 2012 is shown in Table 3

given below.

Table 3.1 Year wise cold storage capacity/

Of the 300.05 lakh MT cold storage capacity, nearly 140.00 lakh MT has been created

between 20002011 on account of interventions by National Horticulture Board (NHB),

National Horticulture Mission (NHM), Horticulture Mission on North East and Himalayan

States (HMNEH), Agricultural and Processed Food Products Export Development and

Authority (APEDA), Ministry of Food Processing Industries (MoFPI) and Department of

Animal Husbandry and fisheries (DAHD).

Agency wise details of Cold Storages/CA/MA Infrastructure created (2009-12)*

Table 3.2 Requirement scenario


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National Spot Exchange (NSE) undertook a study in December, 2010. The gap in cold storage

capacity in


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Table3.3

Coldstorage capacity gap


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Government initiativesi. Enhanced Pattern of Assistance:Subsidy has been enhanced from 25% to 40% in General Area and from 33.33% to

55% in Hilly and scheduled area, to attract more entrepreneurs and private investment

in Cold Chain Infrastructure Sector since April, 2010.

ii. Rural Infrastructure Development Fund (RIDF) for warehousingFinance Minister in his budget speech for 2012-13 has proposed to earmark Rs. 5,000

crore for creating warehousing facilities (including cold storages) from the allocation

under RIDF. During 2011-12, there was provision of Rs. 2,000 crore under RIDF VII for

the first time.

NABARD has informed that as against the allocation of Rs. 2000 crore. NABARD

sanctioned an amount of Rs. 2252.90 crore during 201112. Of this Rs. 1493.82 crore

was sanctioned to 13 state Governments/UTs, while the remaining amount of Rs.

759.08 crore was sanctioned and disbursed to banks as refinance. Assistance fromNABARD is likely to create a storage capacity of 7.30 million metric tons. Keeping in

view the shortage of warehousing infrastructure (including cold storage) for agricultural

commodities, GOI has increased the allocation for 2012-13 to Rs. 5000.00 crore from a

level of Rs. 2000.00 crore in 201112.

The interest rate regime governing RIDF has undergone a change w. e.f. 01 April, 2012.

NABARD is in the process of finalizing the policy for the year 2012 13, in consultation

with Department of Financial Services, Ministry of Finance, and Government of India

iii. Exemption on Excise and Custom DutyCustom Duty - The projects of cold storages, cold room (including farm level pre-

cooling) or industrial projects for preservation, storage or processing of agricultural,


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apiary, horticultural, dairy, poultry, aquatic and marine produce and meat have been

granted project import status with concessional Basic Customs Duty (BCD) of 5%. The

Truck refrigeration units and Refrigeration motor vehicle have been fully

Exempted from BCD.

iv. Excise DutyThe Central Excise duty has been fully exempted for installation of a cold storage cold

room or refrigerated vehicle, for the preservation, storage, transport or processing of

agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat,

air conditioning equipment and refrigeration panels for cold chain 4 infrastructure and

including conveyor belts used in cold storages, mandis and warehouse.

v.Service TaxThe Central Board of Excise and Customs have clarified that sub-clause (v) of Section

66D of the Finance Act, which specifies the Negative List of services and where the

services by way of storage and warehousing of agricultural produce are covered. The

expression Agricultural Produce has been defined in Section 65(B)(5) of the said Act.

Thus storage and warehousing of agricultural produce is not liable to service tax.

Moreover, serial No. 14 of the Mega Exemption 25/2012-ST, dated June 06, 2012 has

exempted the construction of postharvest storage infrastructure for agricultural

produce, including cold storage for such purposes

vi. External Commercial Borrowing (ECB)External Commercial Borrowing (ECB) can be raised for investments in new projects,

modernization/expansion of existing production units in real sector industrial sector

including infrastructure sector for creating cold storages or cold room facility, including

farm level pre-cooling, for preservation or storage of agricultural/horticultural and allied

produce.


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vii. Foreign Direct Investment (FDI)100% Foreign Direct Investment (FDI) is allowed under automatic route in storage and

warehousing including warehousing of agriculture products with refrigeration i. e. cold

storages.

viii. National Mission on Food ProcessingIn order to have a better outreach and to provide more flexibility to suit local needs of

fruits and vegetables, it has been decided that a new centrally sponsored scheme titled

National Mission on Food Processing would be started, in cooperation with the State

Governments in 2012-13 under which cold storage for processing purposes will also be

developed. This mission will be implemented by MoFPI as a centrally sponsored

scheme.

ix. Introduction of Horti TrainIntroduction of dedicated train and reefer van is also expected to bridge the gap

between the producers and consumers thereby ensuring remunerative prices to the

farmers. The first Horticulture Train, nonstop trail run was conducted between Bhusawal

Azadpur (New Delhi) sector in the month of January, 2012 which carried about 1100

MT of banana from Bhusawal to Azadpur market yard in 26 hours.

Another round of Train run with potato was successfully conducted between Agra

Turbhe (New Bombay) sector on 12th June, 2012. The Train reached its destination in a

record time with extremely good condition of produce at APMC Turbhe, Vasi Market.

Another round of trail run of full rake load of onion from Khedwadi (Niphad, Distt.

Nashik) to Chitpur, Kolkata (West Bengal) was done in June, 2012.

After conducting trial run on various sectors and with different commodities, service of

Horticulture Train is proposed to be formally launched on viable origin destination

(OD) pairs; i. e. is AgraTurbheTulgalabad/AzadpurAgra.


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x. Technical Standards NotificationFollowing Technical Standards for storing fresh fruits & vegetables had been notified for

implementation w.e.f.1.4.2010.

a. Fresh Horticulture produce Not requiring pre-cooling before storage (Technical

standard number NHB-CS-Type 01-2010)

b. Fresh Horticulture produce requiring pre-cooling before storage (Technical standards

number NHB-CS-Type 02-2010)

c. Control Atmosphere (CA) Cold Storage (Technical Standards Number NHB-CS-Type

03-2010)

d. Fruit Ripening Units (Technical standards number NHB-CS-Type 04-2010)

ix. Negotiable Warehouse receipt system in Cold Storages Warehouse for horticulturecropsThe Warehousing Development and Regulatory Authority (WDRA), a statutory body, in

consultation with NHM, Department of Agriculture & Cooperation has introduced, in

June 2012, negotiable warehouse receipt system in cold storage warehouses for the

major horticulture produce so that the farmers producing horticulture crops may also

avail the benefit of loan from the banks against the deposit of their produce in the

registered warehouses (cold storages). This will help in commercialization, effective

post-harvest management and integrated development of agriculture including

horticulture in the country. The WDRA has notified 26 horticulture commodities for the

issuance of NWRs by the registered warehouses (cold storages). The WDRA has also

finalized the checklist for accreditation of warehouses (cold storage). The Authority has

also approved following 5 Government organizations as accreditation agencies for the

cold storage warehouses.

1. National Institute of Agricultural Marketing (NIAM)


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2. Directorate of Marketing and Inspection

3. National Cooperative Development Corporation (NCDC)

4. National Productivity Council (NPC)

5. The Rail India Technical and Engineering Services (RITES) Ltd

CHAPTER 4SHORT TERM LOAN ON COLD STRAGES

UCO BANKhttp://www.ucobank.com/rural-banking/agriculture-credit.aspx#.UxQOY_mSwp8Product Segment

Agriculture-Indirect

Purpose

Our Bank provides medium term loans for setting up of Cold storage units, warehousesgodowns and silos. In addition, following type of short term loan facilities are also

provided by our Bank with a view to promote storing capacity of Agricultural produce

and better price realization by the farmers.


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Cash Credit limit of working capital to cold storage units for direct expenses likewages, salaries, electricity charges, and fee and maintenance expenses.

Eligibility The Cold storage must be granted a license for running the storage units indicating

its staring capacity by the Competent Authority in the State.

Cold storage owner should obtain permission from Additional Director, AgriculturalMarketing of the concerned State Govt. or other Competent Authorities for storing his

own stockand stock of the renters and traders for the current season.

Quantum of loan Quantum of loan should be fixed on objective assessment of working capital need.

Security Primary Security- Hypothecation of all types of plant and machinery installed and/or

to be installed as also all type of furniture, fixture and

Collateral Security- Equitable mortgage of Land and Building of Cold Storage and/orany other property (Land and Building owned by the Cold Storage owner(s).

Guarantee- Third party guarantee/personal guarantee from the partner/directors ofthe unit should be obtained.

Minimum Margin40% of the expenses projected on the unit and accepted (verified on the sanctioning

authority on the basis of past trends).

Repayment/adjustment of the limit


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The Cash Credit limit sanctioned to be adjusted fully along with interest and othercharges within the storing period of the Stock of Agril. Produce.

InsuranceThe building, plant and machinery, furniture/fixture equipment and other fixed assets as

also stocks stored must be comprehensively insured with agreed Bank clause.

ORIENTAL BANKhttps://www.obcindia.co.in/obcnew/site/inner.aspx?status=4&menu_id=23

Scheme for Financing Working Capital Requirement of Cold Storage Eligibility :Working Capital Finance is to be provided to those units, who have either availed term

loan from our bank or have not availed any loan facility from any other financial

institutions.

The term loan account of these cold storage holders should be Standard Regular.

Multiple banking arrangement is strictly prohibited under the scheme.

Purpose :To meet the working capital requirement of cold storage units for onward lending to the

farmers who have stored their agricultural commodities with them. In Addition facility is

also allowed for agriculture commodities belonging to cold storage owner


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Amount of Loan :70% of the capacity of the storage unit or last 3 years actual average storage and

market value or minimum support price of agricultural commodities whichever is less.

However, under the on lending the loan amount per farmer should not exceed Rs.2.00

lac or 70% of value of produce stored whichever is lower.

Security :Primary SecurityHypothecation of receivables/ book debt arising out of advances to farmers for storage

of agricultural commodities/ Agriculture Commodities owned by the cold storage owner

Collateral SecurityFirst/second charge on fixed assets of the cold storage unit.

1. Personal guarantee of partners/promoters/directors.

2. Any other tangible collateral security if available.

Validity period :The account shall be got adjusted in the phased manner as per following:

50% up to October.

90% by Nov. and in exceptional cases (where seed quality potato is stored)

by December

10% of Peak level limit during the off season month of Nov. to Feb. against book-debt

stocks (consumables) available instead of liquidation of limits.

In case of multi commodity cold storage the limit may continue on regular basis & dra

may be allowed as per D.P.

However D.P shall not be allowed against any agriculture commodity beyond 12 month

storage.


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CHAPTER 5

APPLICATION FOR COLD STORAGE

1.Choose the New LOI Application on NHB Interactive and proceed by entering allthe details required as part of the application.

2.On successful submission of application

a)In case you choose to pay through online mode through Credit Card/DebitCard/Internet Banking, the system will generate a Acknowledgement with official

LOI No. for your application. The system will provide you with options to view/print

"Acknowledgment" and "Online Application Form". Take a print out of the "Online

Application Form" and support documents ( Refer Checklist) required as part of the


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application and submit the application to National Horticulture Board within one

month from the date of submission of application online

b)In case you choose to pay through offline mode through DD, the system willgenerate a Temporary Application No. for future reference. On receipt of your offline

payments along with the physical enclosures, you will get an official

acknowledgement from us. The system will provide you with options to view/print

"Online Application Form" Take a print out of the "Online Application Form" and

attach the demand draft for the fee ( Refer Fee Structure) and support documents (

Refer Checklist) required as part of the application and submit the application to

National Horticulture Board within one month from the date of submission of

application online

For further information go through the website: http://www.nhb.gov.in/csIndex.aspx


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FORMAT-I

1) Date of application

2) Control No. :

(to be given by NHB)

PHOTO

ToThe Managing DirectorNational Horticulture BoardPlot No. 85, Sector-18, InstitutionalArea, Gurgaon-122015(Haryana)


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Application for Letter of Intent LOI) under the scheme Capital Investment SubsidyScheme for Construction/Modernization of Cold Storages and Storages of NationalHorticulture Board)A. BENEFICIARY/ENTREPRENEUR

1. Name :_________________________________

Permanent Address :_________________________________

Postal Address :_________________________________

2. Constitution : Individual/Company/Joint Promoter/Government

In case of Individual

3. Category : SC/ST/OBC/Ex-Service Man

4. Gender : Male/Female ___________ Age _______

5. Occupation :

5. Promoters/beneficiary profile :

In case of companies -

Registration number & date of registration Registering authority Act under which Registered Authorized share capital _________ Paid-up share capital _________ Reserves & surplus _______

(by end of last financial year)


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B. PROPOSED ACTIVITY

1. Name of the Project

2. Location:

Survey/Khasra No.___________ Village ___________, Taluka _______,

District _________, State ___________

3. Component : Cold Storage/CA Storage/Modified Storage/Onion Storage/

Modernization of Existing Storage

4. (A) Existing capacity, if any Chamber (s) Capacity in MT Chamber No. 1 .......................

Chamber No. 2 .......................

Chamber No. 3 .......................

Chamber No. 4 .......................

Total .......................

(B) Proposed new capacity Chamber (s) Capacity in MTChamber No. 1 .......................

Chamber No. 2 .......................

Chamber No. 3 .......................

Chamber No. 4 .......................

Total .......................

(C) Chamber/Capacity Proposed Chamber (s) Capacity in MT for modernizationChamber No. 1 .......................


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Chamber No. 2 .......................

Chamber No. 3 .......................

Chamber No. 4 .......................

Total .......................

(D) Justification for Additional Capacity/Modernization

B.II (a)Whether proposed activity in application is Yes/Noa completely a new activity

(if No, the details of pre-existing activity or any component thereof included inthe application should be indicated clearly)...............................................................................................................................

...............................................................................................................................(b) Whether any subsidy has been availed Yes/No

for the proposed proposal/activity from

Central Govt. or any of its Agencies.

(if YES, please indicate clearly in detail...............................................................................................................................

...............................................................................................................................

C. PROPOSED PROJECT COST (Component-wise)

D. PROPOSED MEANS OF FINANCE(i) Promoters share ..........................


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(ii) Bank/FI term loan ..........................

(iii) Proposed subsidy from other sources, if any ..........................

a) Form State Govt. ..........................

b) From Central Govt. other than NHB ..........................

Total ...........................(Note: Unsecured loans from friends/relatives will not be treated as equity)Expected back-ended subsidy from NHB: Rs.

NHB subsidy will be considered as per Boards guidelines, if found in order, butnot guaranteed)

E. EXISTING STATUS OF PROJECT(Please give details about the activities of the proposed project already completedat the time of submission of application of Letter of Intent (LOI)......................................................................................................................................

......................................................................................................................................

......................................................................................................................................

G. Whether any assistance in the form of soft loan and subsidy has been availed bythe beneficiary earlier from the National Horticulture Board? If yes, give detailsthereof......................................................................................................................................

.....................................................................................................................................

H. Whether any subsidy has been availed from the Board, other Central Govt.


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organization or State Govt. for the same activity on same piece of land, khasra no.etc.?.....................................................................................................................................

.....................................................................................................................................

Details of subsidy, if availed from:(i) MFPI :(ii) APEDA :(iii) NHM :(iv) Technology Mission :

I. Name of the Bank/FI from where the term loan is availed/to be availed by theBeneficiary (Please enclose a copy of the duly filled up term loan Application).

a) Name of Bank: ......................................................................................

b) Details of Bank Branch:

.

c) Bank

Code:...

J. Date & Amount of sanction of termloan, if any : ______________________

K. Details of release of term loan, if any : ______________________


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L. DETAILS OF LANDI) Whether own land (ancestral) : _________________________

ii) Whether own land purchased : _________________________

iii) Whether leased If so, how many years lease :

_________________________

iv) Whether lease/tenancy/contract is registered with the Competent RegistrationAuthority(copy of the proof of each title be enclosed)

M. IMPLEMENTATION SCHEDULE OF PROPOSED ACTIVITY

N. MARKETING OF PRODUCE

O. Cost of Application Form & Scheme Brochure will be as under:

Projects costing up to Rs. 10.00 lakh : Rs. 1000/-

Projects costing above Rs. 10.00 lakh

and below Rs. 20.00 lakh : Rs. 2000/-Projects costing above Rs. 20.00 lakh

and below Rs. 50.00 lakh : Rs. 5000/-

Projects costing above 50.00 lakh : Rs. 10000/-


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The above prescribed cost of application form and brochure will be non- refundable.

P. Please remit the cost of application and scheme brochure by Demand Draft drawnin favour of National Horticulture Board payable at Gurgaon (Haryana)

Q. Name & address of consultant who prepared the project report (DPR).

Certified that the information/contents as above furnished by me/us in the application

are true to the best of my/our knowledge & belief and nothing material has been

concealed. In case, any information furnished in the application is found false, my/our

application may be rejected out rightly at any stage by the Board.

(Signature of the Beneficiary)Name & Address: .........................

Place: Telephone/Fax No. .........................

Date :

Enclosures: Letter of Intent (LoI) procedure under the NHB scheme Capital InvestmentSubsidy for Construction/Expansion/modernization of Cold Storage & Storages ofHorticulture Produce ,

1.1 Section ADocuments related to Letter of Intent


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Application Form (Format I) Affidavit (Format II) Prescribed cost of application from and scheme brochure

Basic Data Sheet Board Resolution

1.2 Section BDetailed Project Report

Promoter Profile

Proof of identity of applicant Marketing Strategy Implementation Schedule Key Map of Project land showing project details and land bound

details

Site layout Plan Financial Analysis Annexure

1.3 Section CLand Documents

Land Allotment Registered Lease Deed Registration Industrial Approval NOC from State Pollution Control Board

1.4 Section D


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Bank Documents

Bank Consent Letter

1.5 Section ECompany Related Documents

Memorandum of Association & Article of Association Certificate of Incorporation

FORMAT-II

AFFIDAVIT(on stamp paper of Rs. 20)

I/we ............................................ (Name of the promoter/Director son of

Mr..........................(fathers name) resident of ........................................

(residence address) do hereby solemnly affirm and declare as under:

1. That I/we am/are individual grower/promoter/director/partner/group of

growers/association of growers/proprietor of M/s ..........................

.................................. (name of beneficiary) having its Registration no.

.. Registered Office at ........................................ (office address of

beneficiary).

2. I hereby make application and I am duly authorized in my own right/by management

vide its resolution no. ..dated ..to apply and sign all required


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documents including this affidavit on behalf of company/partnership firm/cooperative

society named as ; and am fully aware of the facts relating to the

setting up the project at Survey No. ....................., Village..,

Tehsil., District..State.. (location of the project) for

.............................. (activities to be undertaken by project) and application is being

made to NHB for seeking Letter of Intent (LOI) under the scheme Capital

Investment Subsidy Scheme for Construction and Modernization of Cold Storages

and Storages.

3. That the term and conditions of the scheme of NHB under which an application is

made by the applicant have been properly read and understood by me and I affirm

that the project/proposal/scheme comply with the terms and conditions of NHB and

the application is made in the correct applicable scheme.

4. That the proposed activities to be undertaken by the project/proposal scheme are

covered under the above scheme of NHB and no part of the scheme/infrastructure

of the project is designed or assigned to be used for any activity other than the

horticulture activities specified in the application at present or in the near future.

5. That the information provided in the application of Letter of Intent (LOI) is true and

correct to the best of my knowledge and belief. The estimate of the cost of

project/proposal/Scheme, financial viability and operating results have been worked

out/computed as per the rule and generally accepted principle and norms in this


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regard.

6. No subsidy/grant-in-aid other than shown in application form has been availed/is to

be availed by the promoters/ directors/partners/proprietors for this new project and

component thereof from Central Govt. or any of its agencies Except the NHB.

7. Myself or any other promoter of Cooperative Society, Partnership Firm, Self Help

Group has not availed any subsidy from NHB which has not been disclosed in the

application.

8. I/we also solemnly affirm that the proposal activity in the application for LOI is a

completely new activity and not a pre-existing activity or any component thereof.

In case of concealment of any facts in this regards, the Board would have right to reject

my application out right at any stage.

DEPONENT VERIFICATION

Verified on solemn affirmation at ..................................... (place) on this ............ (date)

of, .................... (month), 20 .................(year) that the content of the above affidavit are

true to the best of my knowledge and belief and nothing material has been concealed.

DEPONDENT/COMPETENT AUTHORITY


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CONCLUSION

Looking at the requirement scenario and growing demand for cold storages, it is a good

project to look forward. With the growing population each year we need equivalent food

supply Present requirement of cold storage being 61.13 MT and capacity being only

23.51 MT, the remaining 37.62 MT food just gets wasted. If we could store this amount

of food, then this would not only be beneficial for the people of the country but even the

government would be able to sell the remaining storage internationally.


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A REPORTON

BIOMASS-WOOD PELLETS


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INDEX

Sr. No. Topic Page No

1 Chapter 1: INTRODUCTIONBIOMASS 62

2 Chapter 2:NATIONAL POLICY FOR BIOFUELS 65

3 Chapter 3: GLOBAL SENARIO OF WOODPALLETS

67

4 CONCLUSION 74


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List of IllustrationsList of FiguresFigure3.1 Various energy Sources in relation to the worlds total primary

energy supply..............67

Figure3.2 Development of Direct Trade of Energy Biomass in 2004-2011 by various

types of energy68

Figure 3.3 Biomass Use for energy purpose in 2009.69

List of TablesTable3.1 The largest countries using Biomass in industrial sector in 2009.69

Table3.2 The 15 Largest Pallet producing countries in 2011..71


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CHAPTER 1INTRODUCTION BIOMASS

Biomassisbiological materialderived from living, or recently living organisms. It mostoften refers to plants or plant-based materials which are specifically calledling-cellulosicbiomass.As an energy source, biomass can either be used directly via combustion toproduce heat, or indirectly after converting it to various forms ofbiofuel. Conversion ofbiomass to biofuel can be achieved by different methods which are broadly classified

into:thermal,chemical, andbiochemicalmethods.Wood remains the largest biomass energy source to dateexamples include forestresidues (such as dead trees, branches andtree stumps), yard clippings, wood chipsand evenmunicipal solid waste. In the second sense, biomass includes plant or animalmatter that can be converted into fibers or other industrialchemicals, includingbiofuels.Industrial biomass can be grown from numerous types of

plants,includingmiscanthus,switchgrass,hemp,corn,poplar,willow,sorghum,sugarcane,bamboo, and a variety oftreespecies, ranging from eucalyptustooil palm(palmoil).

PELLETSPellet fuelsare heating fuels made from compressed biomass.Wood pelletsare themost common type. A form ofwood fuel, wood pellets are generally made fromcompactedsawdustor other wastes fromsawmillingand other wood productsmanufacture,Other woody biomass sources includepalm kernelshell,coconutshell,and whole-tree removal or tree tops and branches leftover after logging and which

otherwise help replenish soil nutrients.[2]As wellgrassescan also be pelletized,
http://en.wikipedia.org/wiki/Pellet_fuel#cite_note-2http://en.wikipedia.org/wiki/Pellet_fuel#cite_note-2http://en.wikipedia.org/wiki/Pellet_fuel#cite_note-2http://en.wikipedia.org/wiki/Pellet_fuel#cite_note-2


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creatinggrass pellets. Pellets are manufactured in several types and grades as fuels forelectric power plants, homes, and other applications in between. Pellets are extremelydense and can be produced with a low moisture content (below 10%) that allows them

to be burned with a very high combustion efficiency.

Further, their regular geometry and small size allow automatic feeding with very fine

calibration. They can be fed to a burner by auger feeding or by pneumatic conveying.

Their high density also permits compact storage and rational transport over long

distance. They can be conveniently blown from a tanker to a storage bunker or silo on a

customer's premises.

HOW ARE PELLETS PRODUCEDPellets are produced by compressing the wood material which has first passed through

ahammer millto provide a uniform dough-like mass.This mass is fed to a press whereit is squeezed through a die having holes of the size required (normally 6 mm diameter,sometimes 8mm or larger). The high pressure of thepresscauses the temperature ofthe wood to increase greatly, and the ligninplasticizes slightly forming a natural "glue"that holds the pellet together as it cools.

Pellets can be made from grass and other non-woody forms of biomass that do not

contain lignin:distiller's dried grains(a brewing industry byproduct) can be added toprovide the necessary durability.A 2005 news story from Cornell University Newssuggested that grass pellet production was more advanced in Europe than North

America. It suggested the benefits of grass as a feedstock included its short growing

time (70 days), and ease of cultivation and processing. Grasses produce 96% of the

heat of wood and that "any mixture of grasses can be used, cut in mid- to late summer,

left in the field to leach out minerals, then baled and pelleted. Drying of the hay is not

required for pelleting, making the cost of processing less than with wood pelleting.

Rice-husk fuel-pellets are made by compacting rice-husk obtained as by-product of rice-

growing from the fields. It also has similar characteristics to the wood-pellets and more

environment-friendly, as the raw material is a waste-product. The energy content is


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about 4-4.2 kcal/kg and moisture content is typically less than 10%. The size of pellets

is generally kept to be about 6mm diameter and 25mm length in the form of a cylinder;

though larger cylinder or briquette forms are not uncommon. It is much cheaper than

similar energy-pellets and can be compacted/manufactured from the husk at the farm

itself, using cheap machinery. They generally are more environment-friendly as

compared to wood-pellets.In the regions of the world where wheat is the predominantfood-crop, wheat husk can also be compacted to produce energy-pellets, with

characteristics similar to rice-husk pellets.

A report by CORRIM (Consortium on Research on Renewable Industrial Material) for

the Life-Cycle Inventory of Wood Pellet Manufacturing and Utilization estimates the

energy required to dry, pelletize and transport pellets is less than 11% of the energy

content of the pellets if using pre-dried industrial wood waste. If the pellets are made

directly from forest material, it takes up to 18% of the energy to dry the wood and

additional 8% for transportation and manufacturing energy. An environmental impact

assessment of exported wood pellets, by the Department of Chemical and Mineral

Engineering, University of Bologna, Italy and the Clean Energy Research Centre, at the

University of British Columbia, published in 2009, concluded that the energy consumed

to ship Canadian wood pellets fromVancouvertoStockholm(15,500km via the PanamaCanal), is about 14% of the total energy content of the wood pellets.


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CHAPTER 2NATIONAL POLICY FOR BIOFUELS

The National Policy on Bio-fuels and its implementation has been approved by theUnion Cabinet. Setting up of a NationalBiofuelCoordination Committee andaBiofuelSteering Committee has also been approved. The Policy endeavors tofacilitate and bring about optimal development and utilization of indigenous

biomassfeedstocksfor production of bio-fuels. The Policy can be visited at theMinistrys Websitewww.mnre.gov.in.Bio-fuels provide a strategic advantage to promote sustainable development and to

supplement conventional energy sources in meeting the rapidly increasing requirements

for transportation fuels associated with high economic growth, as well as in meeting the

energy needs ofIndias vast rural population. Bio-fuels can increasingly satisfy theseenergy needs in an environmentally benign and cost-effective manner while reducing

dependence on import of fossil fuels and thereby providing a higher degree of National

Energy Security. The Indian approach to bio-fuels is based solely on non-food feedstocksto be raised on degraded or wastelands that are not suited to agriculture, thusavoiding a possible conflict of fuel vs. food security.The salient features of the National Policy on Bio-fuels are:-

Bio-diesel production will be taken up from non-edible oil seeds in waste/degraded / marginal lands.
http://www.mnre.gov.in/http://www.mnre.gov.in/http://www.mnre.gov.in/http://www.mnre.gov.in/


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An indicative target of 20% blending of bio-fuels, both for bio-diesel and bio-ethanol, by 2017 has been proposed.

Minimum Support Price (MSP) for non-edible oil seeds would be announced withperiodic revision to provide fair price to the growers.

Minimum Purchase Price (MPP) for purchase of bio-ethanol and bio-dieselwouldbeannouncedwith periodic revision.

Major thrust will be given to research, development and demonstration with focuson plantations, processing and production of bio-fuels, including Second

Generation Bio-fuels.

Financial incentives, including subsidies and grants, may be considered forsecond generation bio-fuels. If it becomes necessary, a National Bio-fuel Fund

could be considered.

A NationalBiofuelCoordination Committee, headed by the Prime Minister, will beset up to provide policy guidance and coordination.

ABiofuelSteering Committee, chaired by Cabinet Secretary, will be set up tooversee implementation of the Policy.

The Ministry of New & Renewable Energy has been designated as the

coordinatingMinistry forbiofueldevelopment and utilization while specific roles havebeen assigned to other concerned Ministries. MNRE has taken several initiatives on

various aspects ofbiofueldevelopment. An exercise has been initiated with scientificagencies ICAR, CSIR, DBT, DRDO, NOVOD Board on collection, screening and

identification of elitegermplasmsofjatrophaand on processing and end usetechnologies. The objective is to generate and make available elite planting materials

for plantations. The scientific agencies and the private sector have identified 25 superior

genotypes/accessions ofjatrophafor further multiplication for demonstration at varioussites in potential States. Another exercise has been taken up on realistic costing of

biodiesel which will provide guidance on review and revision of the purchase price for

biodiesel.A survey has been undertaken to assess the status ofJatrophaplantations in


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nine States. Major thrust is being given to development of second generation biofuels.An Indo-USMoUhas been signed onbiofuels with focus on joint R&D, particularly onsecond generationbiofuelssuch as, cellulosic ethanol and algal biodiesel. Anotherinitiative with research institutes and industry is on for development of high efficiency

engines for use of SVO for stationary applications.

CHAPTER 3GLOBAL SENARIO OF WOOD PELLETSCurrently, biomass covers approximately 10% of the global energy supply. Roughly two

thirds (34 EJ/a) of the energy use of biomass took place in developing countries for

cooking and heating. The remaining use of biomass (about 18 EJ/a) took place in

industrialized countries, where biomass is utilized both in industrial applications within

heating, power and road transportation sectors and for heating purposes in the private

sector, Figure 1-1. In 2009, about 13% of biomass use was consumed for heat and

power generation while the industrial sector consumed 15% and transportation sector

4%. The global consumption of biofuels in transportation equaled to about 2% of the

total fuels use of the transport sector. In the same year, biomass use in power, heat

and CHP plants was approximately 7 EJ.


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The markets of energy biomass are developing rapidly and becoming moreinternational. The areas from which biomass is procured, especially by large biomass-

users, are expanding quickly, and more and more biomass is being sourced from

abroad, including from other continents. Comprehensive information of the current

bioenergy market is an essential factor for contributing the market development.


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Global energy use of biomassAccording to the Energy Balance of the World by IEA, the total use of biomass for

energy was 52 EJ (as primary energy) in 2009. Figure 4-1 shows the global biomass

consumption in various end-use sectors. Most of the biomass use is inefficient

residential use, mainly in developing countries for cooking and heating purposes.

Industry is the second largest user, followed by electricity plants and transportation

sector. The modern use of biomass excludes residential and other use sectors but

covers other sectors.


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Biomass used in the industrial sector in India is for example bagasse, rice husk, straw

and cotton stalks, which are used for power generation. Bagasse is used especially in

sugar mills. Biomass is also used significantly in pulp and paper mills. In Brazil, in total

21% of the energy used in the industrial sector was derived from sugar cane bagasse


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According to a survey published in Bioenergy International Magazine, there are globally

about 600 operational pellet mills with the annual installed capacity of more than 10 000

tonnes calculated for 24/7 operation. Of these, 71 are mills with the annual installed

capacity of more than 100 000 tones. These largest pellet mills are located in 21

countries, mainly in Northern America and Europe. Most of them are in Canada,

Germany, Sweden, the US and Russia. The combined capacity of the mills listed in thesurvey is more than 42 million tons a year, including mills under construction or

planned. The global pellet production capacity in 2012 was estimated to be around 40

million tons (680 PJ/a)

The largest pellet mills listed in the table use mainly sawdust and wood residues as

feedstock. Vyborgskay Cellose mill in Russia uses chipped wood logs, and the

company leased a number of forest lands in the Northwest Federal District when the

plant was under construction. Feedstock is local in most of the mills listed in the table.

The Bio wood mill in Norway used imported wood chips from US, Canada, Liberia,

Baltic region and Russia, but the production at the mill ended in 2013. The production of

the largest pellet mills is mainly aimed for European markets. The EU is the main

destination for the wood pellet trade. European pellet production could in 2010 still


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cover the EU demand, but the consumption has since then been increasing faster than

the production.

In Canada, most of the pellet production is located in British Columbia. In 2010, 72% of

the pellet production capacity in Canada was utilized, and 94% of production, 1.4 million

tones, was exported, of which 90% to Europe. In the US, most of the pellet mills are

small. The average capacity of a US pellet mill is between 30 000 and 70 000 tons per

annum. Most of the mills use sawmill residue as their feedstock. Currently, the lack of

suitable raw material is limiting their production. Many of the new, large pellet mills do

not use sawmill residue, which enables them to concentrate on export. For example, the

production of Georgia Biomass and Green Circle mills, 800 000 t/a and 550 000 t/a,

respectively, is targeted to the European market. The Georgia Biomass mill is shown in

Figure 5-1. Domestic pellet use in the US is on the rise due to government policies

supporting renewable energy use, and in spite of the increasing export, 80% of the US

pellet production goes to domestic use

In Russia, wood pellet production is increasing; both large Russian mills listed in Table

5-2 are new mills. Most pellet mills are located in the North-West region, where

transportation costs to the EU are low due to the short distance. Domestic wood pellet

consumption in Russia is around 30% of the production. There are currently around 150

pellet mills in Russia, but in 2009, nine producers produced 75% of the countrys total

production

In the European area, pellets are produced to either domestic use or for export to other

European countries. Germany is the largest pellet producer in Europe with the

production capacity of 3.2 million tons in 2010, when the actual production was 1.7

million tons. Nearly 70% of the production goes to domestic use, and the rest is

exported to other European countries, mainly to the United Kingdom, Sweden and

Denmark. In Sweden, the largest pellet producersuse saw dust and shavings as raw

material. The competition of raw material is intense, and pellets are consumed more


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than produced. In 2010, 30% of the consumption was imported. The Baltic States,

Estonia, Latvia and Lithuania have good pellet production conditions due to ample

forest resources and low labor and energy costs. Latvia is one of the largest pellet

producers in Europe, and the production is mainly exportedthe most important

destinations are Denmark and Sweden.

The most common way to extract biomass energy is to combust the biomass directly.

Modern technologies use steam to make turbines rotate and generate heat and power

(or both). Various fuel materials can be applied for direct combustion: wood, municipal

garbage, agricultural residues, etc. (Saxons et al., 2007). However, the bulkiness of the

biomass constrains its storage and transport while its low energy content renders

expensive the combustion of unprocessed feedstock. To avoid these problems,

transformation methods such as the compression of biomass into pellets are frequently

applied (Eubia, 2007). Pellets are usually made of sawdust and wood residues. In

Northern Europe, where wood residues are abundant, the use of pellets has risen fast in

recent years. Uses range from domestic heating in stoves or boilers to district heating

and CHP plants. Briquettes are larger and are usually combusted in industrial devices

(REAP 2009).

The largest wood pellet producer is Sweden, followed by Canada and the United States;

together these countries account for over 3.5 million tons. Sweden is also the largest

purchaser, along with some Central European countries, while the Baltic countries,

Finland, Russia, Poland and Canada mainly produce for export. Countries with future

export potential include Russia, Brazil, Argentina, Chile and New Zealand (Peksa-

Blanchard et al., 2007).

Most of the pellets produced are made out of by-products from the forestry sector(Hadders, 2002). In the future, it is probable that other agricultural products will become

more important, such as grass and agricultural residues. In Sweden, experiments with

reed canary-grass have shown good results, while in Thailand and China, cassava and

rice straw are gaining market share. Important factors for the choice of feedstock are


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energy content as well as moisture content/evaporation requirements. In view of the

relatively high capital costs, cheap feedstock and high efficiency are required. (Nilsson

and Bernesson, 2008).

CONCLUSIONBy 2035, global energy consumption is projected to grow by 41% and, in our view,

consumption of liquid fuels is expected to rise by 20% - almost 15 million more barrels per

day. With the worlds population projected to reach 8.3 billion by then, an additional 1.3 billion

people will need energy. To meet this demand a diverse energy mix is needed. This is wherebiofuels can help; by 2035 the share of biofuels transport demand is expected to grow from

2.5% to 4% (by energy).

With these statistics we can conclude that Biofuel has a good future ahead. It would be

good for environment in the long run.


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