Team 16 business plan submission

Business Plan

”Clean Cookstoves, Sustainibility for Indonesia”

TEAM #16 BIOKRAFTSTOFFE PPM SCHOOL OF MANAGEMENT JAKARTA


TEAM #16 BIOKRAFTSTOFFE PPM SCHOOL OF MANAGEMENT Page 1

EXECUTIVE SUMMARY

Indonesia with its 240 million population, at least 100 million people cook with kerosene and wood-fires stove for their daily cooking needs. These group belongs to lower-middle income communities which can only afford to buy these kinds of stove. These stoves suffer for low efficiency and poor level of emissions. The unavailability of more proper stove and fuel made them stay in the same condition for years. This condition becomes even worse when the Indonesian government run convertion of kerosene to gas. Since most people can not afford to buy gas stoves, regulators, and the jar, there is a lot of kerosene users are back again using firewood which has worse emissions level and low level of security.

What is needed by this community is a stove with a low level of emission, high efficiency and affordable fuel. This condition provides an opportunity to position the stove named Protos as a substitute for kerosene stoves and firewood to a cheaper fuel than LPG. This idea could not work alone. We need a program to support and deliver those ideas. That’s why we came up with a program named “Clean Cookstoves, Sustainibility for Indonesia” to challange those ideas. By doing it, we aim to bring community to enjoy live by doing cleaner, healthier and happier cooking.

We are Biokraftstoffe here as a partner of BSH (Bosch and Siemens Home Appliances Group) will act as an agent who colaborates some partners to build alliances in order to run these programs. Our vision is “Achieving Healthy Way of Cooking to Support Indonesia Sustainability Environment”. This vision reveals our goal which is distributing 5.000 protos cookstove into one spesific area and reach break even points within 2-3 years while there is still cost gap which we have to cover costs for $ 30 for each stove. To achieve this goal we collaborate the power of local partners that has full concerns in developing CSR program deal with Carbon reduction and environmental program through community development to cover this cost gap. We colaborate three local partners and one international partner that has fitted the criterias. Our local partners are BSH, PT. Indocement Tbk (HeidelbergCement Group), and PT Shell Indonesia; while our international partner is CER’s (Certified Emission Reduction)’s buyers.

BSH will act as protos cookstove producer who provides the cookstove, while PT Indocement Tbk (part of the HeidelbergCement Group) will provide plant oil supply from jatropha plantation in their areas since 2007 as part of their CSR program. Our local firm, PT Shell Indonesia will donate such amounts to support our program which align with their program named “Global Alliances Clean Cookstove Program”. On the other hand, CER’s buyers (international companies) will buy the certified emission reduction issued by us as agent who collaborates our local partners regarding CDM (Clean Development Method). All those partners are colaborated into one to be hand in hand supporting our program. We will organize and run all their support and investment so that our vision will be acomplished.

“Clean Cookstoves, Sustainibility for Indonesia” is a program that consider with the implementation of CDM (Clean Development Management) project under the supervision of UNFCCC which requires application of a baseline and monitoring methodology in order to determine the amount of Certified Emission Reductions (CERs) generated by a mitigation project in a project host country like here in Indonesia. There are 3 projects of CDM that we are possibly going to develop. They are AMS-I.G (Plant oil production and use for energy generation in stationary applications). This project will be collaborated with PT Indocement Tbk which have 170 hectares jatropha plantation and produce plant oil which next will be used for supporting oil supply of protos. The second project is AMS-I.H (Biodiesel is produced from cultivated oil crops or from waste oil/fat and used for the generation of electricity. This program will be in charge of Biokraftstoffe which are doing two main activities: processing jatropha crops to become plant oil then sell it to our customers and collecting used oil from food stall and sentra “gorengan” in Sumedang and Majalengka then sell it to our customers. The last project is AMS-II.G (Energy



efficiency measures in thermal applications of non-renewable biomass). This project will be collaborated with BSH by producing and distributing protos cookstove with low level of emission.

These 3 projects in the following three years will reduce totally 15.252 ton CO2 at the end of 3rd year of which counts for 2.217.333.052 rupiahs. This amount can cover the cost gap of 1500 cookstove for the next two years and keep the price as minimum as $ 5. The CDM program will keep generating revenue for years running. On this basis the cost gap of 1500 protos cookstove annually will be covered.

We plan to implement this program in a place named Citeureup, 45 km away from southern Jakarta and 20 km away from northern Bogor. We chose this region since it’s near factory of PT Indocement so that it can be correlated with CDM program done by them. Besides, this region is densely populated area which most of their citizen is from low-middle economic classes that mostly used kerosene as their way of cooking. These type of citizens belongs to our target consumers so by chosing this place is very beneficial for us. Citeureup consists of 12 villages, namely Hambalang, Citeureup, Tajur, Pasir Mukti, Leuwi Rubber, Nambo, Bantarjati, Gunung Putri, Lulut, Gunung Sari, Tarikolot and Puspanegara. These villages are part of the three villages, namely sub Citeureup, Gunung Putri and Cileungsi. There are 75,000 people live right next to the factory area. By assuming that each family consist of 5 members, there will be 15.000 households as our potential market while we target 5.000 households (one-third of all citizens of Citeureup).

However, the whole progam has to be safeguarded. One important thing that needs to be considered is the availability of fuel supply for 5000 families that would be our target consumers. Currently, the availability land of jatropha owned by PT Indocement is not enough to meet the objectives of this program. For that reason, we need to secure our supply by combining fuel supply of Jatropha and used oil we gained by collecting used oil from fast-food industry like McD or KFC, and Sentra Gorengan near the neighbourhood and build the system that enable household to collect their used oil to the collector we point. This activity will sooner become small business entity and empower community to be a real businessman as used oil collector and middleman. Form of used oil collection can be designed like depo or cooperation located in each village under the supervision of Minister of Small-Medium Enterprise. By doing this, it will atrract and retain protos user to keep using their stove because of cheaper and easier to find biofuel rather than kerosene or fire-wood.

We will acquire customers by promotion activities like bundling system, cooking competition, food bazaar in Independence Day, Microfinance program, Membership program, and Member get member program. The cooperatif (Koperasi) in selected villages will be set as integrated selling point, that is to sell the cookstove, fuel and service inquiries. The promotion activities can also be embedded with training program to help the customer getting the product’s insight. The one in charge for this training is Cooperative (Koperasi) staff which is regarded as our sales person in retail chains. Cooperative (Koperasi) will gain profit from us with special discount for $3 for each protos purchasing item.

We will raise capital fund from charity plan in Europe, involving BSH and all its chain including retailers and customers. We bring the campaign to offer non-cash BSH consumers 1 cent Euro for each purchasing activities. We target to gather amounts for € 150.000. The charity fund will be used to help to register CDM project AMS-I.G and AMS-I.H. The whole business plan will see break-even-point in the first quarter of the 2nd year. The NPV (Net present Value) will be Rp. 1.527.558.148 and IRR (Internal rate of Return) value would be 53% and 44% for MIRR (Modified Internal Rate of Return).



1. MARKETING PLAN

a. Product Description and Purpose

Protos is the world’s first plant oil cookstoves. Based on technology developed by BSH, Protos is able to burn almost any filtered plant oil – including used frying oil. Protos cookstove is rigorously tested, affordable, aesthetic, and directly meet consumer needs while providing health, environmental and economic paybacks. Our products are ideal carbon programs due to their ultra-high efficiencies and 5-year extended life durability.

By using this stove, it can reduce indoor air pollution (black soot/smoke) and increase the overall health of the family. The ultimate purpose is helping non-traditional customers enjoy safer, cleaner and lower-cost cooking so that it will support environmentally sustainibility program. Here is the product spesification of Protos Cookstove:

The elements support are:

mat,

oil tank,

stove cover,

stove body,

regulator,

adaptor,

pump

vaporizer

b. Competitive Strategy and Positioning

Competitive strategy is a plan for how a firm will compete, formulated after

evaluating how its strengths and weaknesses compare to those of its competitors. Protos

cookstove as “a new to the world product” decide to concentrate on special niche product

offered in limited areas after determining it cannot compete on price with major

competitors (kerosene stove). We will compete with kerosene stove which is known as

•2-2,5 kW Power range

•2-4 liters/ week Usage

•All plant oil also used oil Fuels

•45-58 % Efficiency

•Ten times lower than kerosene Emission

•Netrals CO2 Balance



cheaper, excessive fuels supply, and popular to the people. Here is competeitive strategies

that we are going to use to distribute Protos to target markets:

1. Collaborating with three local partners and one group of international partner by

bringing issue of CDM (Clean Development Mechanism). By doing so, we could get

offset from CER’s issued. This program will be sustainability visible to cover the cost

gap which is $ 30 per stove and will be (mechanism will be explained later in Cash

flow statement). We’ve pointed three local partners to support our programs. Those

are:

One international partners is group of companies which frequently bought CER from

carbon stock market. We’ve identified 9 international buyers related with our carbon

issue (list of companies explained in Annexes).

By gathering these partners into one, it will strengten our goals to drop 5.000 protos

cookstoves within 3 years, either we can do by conducting promotion strategy,

delivering intensive training and small talkshow about products to potential users,

above the line promotion, or media exposure as part of company activities in

developing CSR program.

2. Attracting target market by educating them through event based marketing usually

done in neighbourhood near target market (Citeureup). The event can be like Arisan

RT or RW (monthly housewifes community gathering), Food bazaar, Cooking

competition commemorate The Independence Day of Indonesia, or Bazaar promo.

These events will be beneficial since we can educate the market the advantages using

Protos rather than kerosene or fire-wood. We can give special promo to target market

by giving them discount for the first trialist user. We can also retain them in order to

keep using the stove by using membership program which allow them to get oil supply

regularly by delivering them directly into their house. This service will satisfy customer

since they don’t need to look for the oil or gather the oil themselves.

3. Combining two kinds of oil supplies which are Jatropha oil and used-frying oil to

ensure the availability of oil supplies. By doing this pattern we can solve the problem

in keeping the availability of oil support that mostly became weakness of BSH which

implement this program years by years. Based on our research, Jatropha oil will

produce 321.000 Litre/ year with total area of 170 ha owned by PT Indocement Tbk,

while used oil will produce 300.000 Litre/year which we get by collecting them from

Sentra Gorengan Majalengka until Sumedang and some Restaurants located in West



Java. This supply has been excessive for the need of Citeureup markets annually which

is 150 Litres/year/household.

4. Empowering Citeureup citizens by opening new businesses focused on used frying

oil collection so that it fulfill the employment. They can be a collector, middleman or

reseller of used frying oil. By doing so, it will improve the welfare of citizens there.

5. Supporting the issue of CDM (Clean Development Mechanism) in order to response

to environmental and Health (MDGs) program. Here is list of three projects which we

will run to support CDM project:

By implementing those strategies, we can have positioning for Protos as:

c. Market Penetration Assumptions

As we are “new to the market” with the product that has been developed in six years

period, we have to use market penetration strategy. We assume that we will penetrate the

market by gaining competitors' customers (part of their market share) which considered to

be kerosene and fire-wood user. Other ways include attracting non-users of our product or

convincing current customers to use more frequent of our product (by promotion or training

activities etc). By doing so we will gain the advantages of entering a new spesific market.

The assumptions are as follows:

Cle

an D

evel

op

men

t M

ech

anis

m (

CD

M)

AMS-I.G : Plant oil production and use for energy generation in stationary applications

AMS-I.H : Biodiesel production and use for energy generation in stationary applications

AMS-II.G: Energy efficiency measures in thermal applications of non-renewable biomass

The world’s first plant oil stove which is efficient, reliable, healthy, eco-friendly with high technology support so that it can burn for almost any filtered plant oil – including Jatropha and used frying oil.

Kompor Minyak Nabati

Murah, Hemat, Aman ,



Number of potential customer (all citizens of Citeureup) 75.000 citizens (Source: PT Indocement Tbk Final Report

Number of household (assumption 1 household: 5 citizens) 15.000 households

Number of target market 5.000 households

Percentage of target market from potential market 5.000/15.000 x 100 %

33,3 %

Those numbers will be acquired for three years period by calculation as follows:

Year 1-5 1st year 2nd year 3rd year 4th year 5th year

Sales of Protos Cookstove (unit)

1600 1700 1700 1500 1500

Percentage of target market

10,67 % from

potential market

11,33 % from

potential market

11,33 % from

potential market

10 % from

potential market

10 % from

potential market

Price per unit (dollar) 5 5 5 5 5

Price per unit (rupiahs) 42.760 42.760 42.760 42.760 42.760

Sales of Cookstove (in rupiahs)

68.416.000 72.692.000 72.692.000 64.140.000 64.140.000

We also provide fuels and pre-heating materials to burn those cookstove using two

kinds of fuels which are jatropha oil and used-frying oil. Besides, we also can get revenue

from these sales. Here is the calculation:


Sales of Jatropha oil (Litres)

321.970 321.970 321.970 321.970 321.970

Price per Litre (rupiahs) 3.500 3.735 3.985 4.252 4.537

Total sales of Jatropha Oil (rupiahs)

1.126.893.939 1.202.395.833 1.282.956.354 1.368.914.430 1.460.631.697

Sales of Used-frying oil (Litres)

300.000 350.000 428.030 653.030 878.030

Price per Litre(rupiahs) 3.500 3.735 3.985 4.252 4.537

Total sales of Jatropha Oil (rupiahs)

1.050.000.000 1.307.075.000 1.705.577.271 2.776.480.561 3.983.228.556

Sales of Spiritus (Litres) 58.240 120.120 182.000 236.600 291.200

Price per Litre (rupiahs) 10.000 10.670 11.385 12.148 12.962

Total Sales of Spiritus (rupiahs)

582.400.000 1.281.680.400 2.072.049.980 2.874.140.527 3.774.409.775

TOTAL SALES OF FUEL AND PRE HEATING

2.759.293.939 3.791.151.233 5.060.583.605 7.019.535.518 9.218.270.029

Number of jatropha oil sales remains same every years since we only have 170 ha

jatropha plantation that we can organize for 5 years periods owned by PT Indocement Tbk.



while sales for used-oil is getting increase following the increasing number of coockstove sold

every years.

Besides selling our main business as explained above. we also gain revenue from the

sales of CER’s (Certified Emission Reduction) from CDM project. Here is the calculation:


Project AMS-II.G (tCO2/year)

1.722 3.552 5.382 6.997 8.611

Project AMS-I.G (tCO2/year)

1.610 1.610 1.610 1.610

Project AMS-I.H (tCO2/year)

620 755 1.153 1.547

Price per tCO2/year ($) 17 17 17 17 17

Price per tCO2/year (Rp) 145.384 145.384 145.384 145.384 145.384

Total Sales of CER from CDM

250.386.140 840.613.702 1.126.333.210 1.418.861.447 1.710.830.318

Here is the total sales for all products wesell in 5 years period:

Year 1 Year 2 Year 3 Year 4 Year 5

Net Revenue (rupiahs) 3.283.344.080 4.922.532.936 6.477.684.815 8.694.956.965 11.185.660.347

d. Price Strategy

We use cost-based and competitive-based pricing which means we set the price for

our products based on each items build for installment and production of cookstove.

jatropha oil, used-frying oil and pre-heating materials. We also concern the price of our

competitors product for both of the cookstove and the fuels (Jatropha and used-frying oils).

Here is the price list we are going to set for four of our products:

e. Promotion Strategy

The activities we are going to develop for promotion strategy is by using two kinds of

activities:

1) We offer protos cookstove by bundling system. We will sell protos cookstove, plant

or used oil, and spiritus in a package so that our customer will find no difficulties in

Products Price

Protos Cookstove Rp. 42.760

Jatropha oil/Litres Rp. 3.500

Used frying oil/ Litres Rp. 3.500

Pre heating materials (spiritus)/Litres Rp. 10.000



Rp. 40.000 Rp. 28.000 Rp. 42.760

*Cash only

using it. Our promotion campaign is “Buy Protos, Discount for Fuel Supply!!” only for

cash payment. In the first time user buy the cookstoves, we will provide the oil and

spiritus for 1 month consumption. We will stimulate user to buy the oil in koperasi

regularly every month with very low price for fuel for Rp. 3.500/litre. This bundling

system is more economical than buying separatedly. Bundling system sold for Rp.

70.760, while for seperated buying sold for Rp. Rp. 110.760. Buyers will save for 36 %

with this system.

2) Regular promotion collaborate with bundling system, means we regularly attend and

educate housewife joining monthly meeting in each villages of neighbourhood (arisan

PKK RT, RW, dan kelurahan) to try and use Protos cookstove. The promotion activities

are giving discount by offering the first 7 cook stoves buyer free for oil supply for a

month. By promoting to 12 villages we will get 1008 buyers in a month.

3) Event based Promotion such as:

a) Cooking Competition.

Promoting cooking competition by using protos cook stove as burner and

collaborating with food or cooking materials such as instant meatball.

sausage. or food flavor. Each group of 4 people must pay for registration fee

for Rp. 100.000. By paying and joining this competition. they will get one

Protos Cook stove to be used as burner. if they win they will get some

attractive and valuable prices. This activity will be done every 6 months. We

targeted 100 people will join this program per event. so there will be 50

buyers in a year.

Spiritus Plant oil

SAVE 36 %



b) Food Bazaar Protos Expo

This activities is held by joining bazaar usually done to comemorate the

independence day of Indonesia. We will give special price by launching

offering “Buy 2 get 1 free” for only one day event. This event we will target 50

buyers in a year.

4) Microfinance Program

We will offer micro finance program by giving them access to pay for the stove within

four to six months through fuel savings alone. This self-financing loop makes it

possible to scale-up the initiative over time impacting millions across the globe. We

will colaborate with koperasi in collecting the installment. Every months we will billed

the money paid by our buyer. We target to acquire 15 buyers every 3 months period

so there will be 60 buyers in a year.

PARAMETER KEROSENE STOVE PROTOS COOKSTOVE

Fuel + pre-heating Rp. 204.000/month Rp. 68.000 /month

Price of stove Rp. 200.000 Rp. 42.760

Total Rp. 404.000 Rp. 110.760

If they use protos cookstoves, they will benefit economically better than use kerosene

stove. By doing so, they’ll save Rp. 293.240 per month. This amount will be allocated

for Rp. 55.000 to pay the installment fee per month (package of cookstove and one

month fuel supply), even they still can save the rest Rp. 182.480 for monthly saving. By

2 months period they can fulfill the installment.



5) Membership (Retention Program)

We also make our retention program for our customer by offering membership card.

For the one who has bought our cook stove will automatically get a membership card.

The advantages they got is they can have a right to purchase our plant/ used oil

regularly. While for the one who hasn’t bought or cookstove may not buy our fuel.

This program will be enlarged with special discount for the member who has bought

our fuel for minimum 50 litres with 10 % discount.

6) Member Get Member (Development Program)

If existing buyer can get a new member by their own effort. we will give them

incentive $ 3 for each new buyer. This program will develop and acquire new buyers in

the future. We target 5 new buyers each month can be gained by this program so

there will be 60 buyers in a year.

7) Training for Trainer

We also promote our cookstove by training how to use and teach the manual to

trainers (koperasi staff who will sell protos, fuel and spiritus) that will be done in every

6 months period in 3 villages. These 3 villages represents 12 districs we have. Here is

the calculation:

2 x installment Rp. 55.000



KOPERASI LOCATION (Districts)

NUMBERS OF TRAINING

COST PER TRAINING

TOTAL COST (RUPIAHS)

Gunung Putri 2 300.000 600.000

Citeureup 2 300.000 600.000

Cileungsi 2 300.000 600.000

TOTAL COST OF TRAINING PER YEAR (rupiahs) 900.000

8) Marketing Tools

Here is the list of marketing tools that we are going to use to support our promotion activities above:

YEAR 1-5 MARKETING

TOOLS (items)

NUMBER OF ACTIVITIES

(month)

NUMBER OF ITEMS USED

(MONTH)

COST PER ITEMS

(RUPIAHS)

TOTAL COST

(RUPIAHS)

Banner 6 3 100.000 300.000

Flyer 6 1000 100 1.200.000

Poster 6 30 4000 1.440.000

TOTAL COST OF TRAINING PER YEAR (rupiahs) 2.940.000

Here is our design to support our “1 CENT CHARITY PROGRAM FROM EUROPEAN COUNTRIES”:

We will collaborate with BSH to bring this campaign by using their existing marketing program. This

logo will be added to price tag and poster in every retail store where BSH products existed in all over

European countries.



YEAR 1

YEAR 2

YEAR 3

Here is the value preposition of using Protos Cook Stove as our promotion campaign:

Program Period Target buyers (per period) Target buyers (year)

Bundling system with Regular promotion

Every month

84 1008

Cooking competition Every 6 month 25 50

Food bazaar in Independence day

Once a year 50 50

Microfinance program Every 4 month 132 396

Membership Every month 3 36

Member get Member Every month 5 60

TOTAL NUMBER OF BUYERS YEAR 1 1600 buyers


Bundling system With Regular promotion

Every month

84 1008



Once a year 50 50






Bundling system With Regular promotion

Every month

84 1008



Once a year 50 50





Value Preposition

More powerful

stove

Uses renewable

energy

Environmentally friendly

Healthy for the

user

Local added

value and job

creation

SUMMARY OF OUR PROMOTION STRATEGY FOR THREE YEARS PERIOD



f. Distribution and Logistics

We will distribute and display protos cookstove, fuel, and pre-heating materials by

placing them monthly in our distributor such as a depo, koperasi, or food stall. Here is the

amount for each distributor (koperasi) we plan each month:

Koperasi Location (Village/ Desa)

Number of Item distributed (monthly)

Cookstoves (unit)

Plant Oil (Litre)

Used-oil (Litre)

Spiritus (Litre)

Hambalang 11 2.236 2.083 405

Citeureup 12 2.236 2.083 405

Tajur 11 2.236 2.083 405

Pasir Mukti 11 2.236 2.083 405

Leuwi Rubber 11 2.236 2.083 405

Nambo 11 2.236 2.083 404

Bantarjati 11 2.236 2.083 404

Gunung Putri 11 2.236 2.083 404

Lulut 11 2.236 2.084 404

Gunung Sari 11 2.236 2.084 404

Tarikolot 11 2.235 2.084 404

Puspanegara 11 2.235 2.084 404

TOTAL NUMBER 133 26.830 25.000 4.853

We also held promotion activities regular and in special occasion located in public area

near the neighbourhood based on promotion schedule designed. We place our cook stove

together with our oil supply in every depos we have, so that they can buy at once easily. This

program is the implementation of bundling system we explained before in promotion

strategy.

We also offer membership program so that only buyer who can buy our oil supply. This

strategy is used to anticipate oil buyer who wants to stock or resell the oil for trading rather

than to consume by using protos cookstove.

g. Market Development

We will develop the market in spesific area named Citeureup, 45 km away from

southern Jakarta and 20 km away from northern Bogor. We chose this region since it’s near

factory of PT Indocement so that it can be correlated with CDM program done by them.

Besides, this region is densely populated area which most of their citizen is from low-middle

economic classes that mostly used kerosene as their way of cooking. These type of citizens

belongs to our target consumers so by chosing this place is very beneficial for us.

Citeureup consists of 12 villages, namely Hambalang, Citeureup, Tajur, Pasir Mukti,

Leuwi Rubber, Nambo, Bantarjati, Gunung Putri, Lulut, Gunung Sari, Tarikolot and

Puspanegara. These villages are part of the three District (kecamatan), namely sub

Citeureup, Gunung Putri, and Cileungsi. There are 75.000 people live right next to the factory

area. We plan to develop this community to become environmentally aware with cleaner

and sustainability way of cooking and healthy life. By doing so we hope they will increase

their ecnomic life through new and more employment surround them.

Here is the map of Citeureup and its 12 villages surround PT Indocement, Tbk. Red lines

circle represents our focus target market:



Total land area of PT Indocement Tbk in Citeureup consists of 240 ha of land plants (including 78 ha of the building) which altogether having a 2700 ha area, including excavation and mineral reserves. It brought a broad impact on the surrounding community. Residential area is directly adjacent to production facilities, namely in the north, west, and partly from the southern boundary line of factory land. Quarry and adjacent conveyor located surround with residential land, agricultural land and industrial land.

2. BUSINESS OPERATIONS

a. Organization and Structure Type, Employee, Team Bios, and Talent Gaps The suitable organizational structure is divisional one. This will support many parties

that are involved within the chain. Divisional organization structure fits as well with the diversed operational and marketing activities.



Here is the definition of each element in organization structure: Team Biokrastoffe

Biokrastoffe is the team’s name by whom this business plan is written. The team is ready and fully intended to lead the business as it was planned. It consists of three members who are more than capable to sit in board’s chair. All member of the team hold a graduate degree in Master of Management (MBA) and some professional experiences, locally and abroad. However, some expertise are required to cover Cleaning Development Mechanism area.

The team vision is achieving healthy way of cooking to support Indonesia’s sustainable environment in 2015. Should any managerial help is needed, the team has a back up from PPM Management Consultancy to provide nexessary knowledge and service. More details regarding team members are given in the annexes. Key Parnertship

The business and social relation with key partners are maintained by Biokrastoffe team. This relation is crucial as several possible revenues may come from here. These revenues could be in a form of a financial support or grant and payment. The ability to keep the relationmaintained may also be a key point to ensure flow of raw material. In one end, the key partners include any companies, business entities, in this case Shell Indonesia and Indocement Heidelbergcement Group. In the other end, NGO, foundation and general public such as foreign embassies in Indonesia are potential ker partners. In this part, the business plan includes UNFCCC for CDM project purposes. Marketing division

Marketing division will lead teams for customer support, service and sales. The sales department are responsible to manage the product’s selling activity in daily basis or in a special events. In the same time, they are also given fully product knowledge. Meanwhile promotion and communication planning will be done by marketing department head. Production division

The production activities will be divided into two parts, the distribution and production. The distribution team will have to collect the used oil and protos cookstove to the depo and further transfer it to the reselling point.

The production team will have the responsibility to produce the plant oil out of the jatrhopa seeds. They too filter the used oil collected from the food chain and do further process. Production team will manage all the activities in the depot including material storage and equipmment maintenance.

Purchasing: the division will hold responsibility for business or production procurement. Their position in the business will support the core activities mainly in operation and marketing. General affair and Human resource department

General affair will hold the administrative responsibilities in general.However, this division has two subordinates. The division will be led by a head of division. Ideally someone who has human resource management background.

Human capital: this sub-division is responsible to recruit necessary employee from sales force, accounting staff, production personels and maintain employment. The division will be responsible for building strong system dedicated for employee training such as product knowledge, sales and marketing skill, communication skill and relationship building.

Administration: they will work on any business administration matters. Their position internally can be seen as an interdivision hub. They wil be responsible for keeping and storing any necessary document and archive,within a corporate level or lower.



Finance Finance division will be led by a division head and will have two sub-divison. The

division will be responsible to organize cash-flow, tax management and accounting management. There will be two sub divisions here:

Accounting: this sub-division will work on accounting management activity including cash-flow management, journal, internal audit and tax.

Carbon Trading Management: the sub-division calculate all the cabon trading conversion. They have to measure the gain ina business and environmental perspective from 5 Clean Development Mechanism (CDM)

The organization will be led by a CEO. One CFO (Chief Financial Officer) will have to be responsible for the business financial performance. One marketing director will lead the marketing division. A single person as Chief Operating Officer takes the lead of the operation division and one human resource director will be responsible for general affair and HRD

b. Business Processes The business process describes how the revenue will be generated. In this business plan, there are three different business processes . Each of them refers to the proposed CDM project as the main drive of the business. Every operational activities of the CDM project are varied within the business. The details are given as the following Project CDM AMS-I.G The AMS-I.G will make use of the carbon trading with the base of 170 Ha ready to harvest jathropa plantation own by Indocement Heidelberg Group. The baseline of the project proposal is: oil crops is cultivated, plant oil is produced and used for the generation of electricity, thermal or mechanical energy displacing fossil fuel.

Process I Indocement Heidelbergcement Group will be proposed to use the jathropa seeds from their plantation. These seeds further are the source of raw material to produce plant oil. The oil it self is sold to supply the Protos cookstove.

Process II The proposal as a request to join Shell’s Global Alliances Clean Cookstove program. Shell Indonesia is then expected to promote financial donation that will be used for a CDM project registration at UNFCCC. Once the registration is fulfilled, the authorized auditor then performs project audit. Hereafter, the carbon trading incentives will be obtained as the project has been approved valid. The process from the registration

Highlights

Division Sub division Staff Labor

Finance Accounting 1

CDM 1

Operation

Production 1 3

Purchasing 1

Distribution 1 3

Marketing

Sales 5

Technical Support 2

Customer Service 1

HRD & General Affair Human capital 1

Administration 2

Total number of staff and labor 16 6



up to CDM project approvel will take a year to complete. For global overview of the project, please see the picture below.

Project CDM AMS-II.G This project base line is based on installation of more-efficient thermal energy generaton units utilizing non-renewable biomass and/or complete replacement of existing less-efficient thermal applications and/or retrofitting of existing thermal energy generating appliances reduces GHG emissions by saving non-renewable biomass. In this case, the selling activity of Protos cookstove it self.

Process I: The first process is defined as selling the cookstove at $5 each. The revenue is fixed as much as $150.000 for 5000 units of Protos cookstove.

Process II: Basically, the process here is the same as what was mentioned in project CDM AMS-I.G. Only the project audit will have some diffrences. The initial fund needed for CDM project registration will be obtained from Shell’s Global Alliances Clean Cookstove too.

Highlights

Capacity: 320.000 litres of plant oil a year

Harvesting time: twice a year

Broad of plantation Area: 170 Ha

Retail price plant oil: Rp. 3.500 / litre

Total carbon emission improvement: 1.610 tonCO2 per year

Initial investment for bio-facility: Rp. 60.000.000

Shell’s Global Alliances Clean Cookstove: € 75.000

CDM project registration: € 75.000



Project CDM AMS-I.H AMS-I.H project is base on biodiesel production from cultivated oil crops or from waste oil/fat and used for the generation of electricity, thermal or mechanical energy displacing fossil fuel.

Process I Main material of the biodiesel in this process comes from partner food chain restaurant and hotel in a form of used oil. After the used oil collection, it will be brought to the biofuel facility to be further processed. The outcome is the biodiesel used to supply as a fuel for Protos cookstove. Plant oil capacity does not fulfill the required fuel supply for 5000 Protos cookstove. Therefore, the collection of used oil plays very important role in this business plan.

Process II The process will not much differ from the previous two CDM project. The only different lays again in the project audit. But this will be the main concerned of the authorized party like UNFCCC.

Highlights

Sales target year 1: 1600 Sales target year 2&3 : 1700 Total revenue up to year 3 @ $20 each: $100.000


Pre-heating material: Rp 10.000 / litre

Emission reduction initial year: 1605 tonCO2a year



Contribution Allocation Contribution Allocation Contribution Allocation

BSH - - € 75,000

Initial Fee for

CDM Project

(Project AMS-I.G;

AMS-I.H)

- - European Charity Program

Indocement

(Heidelberg

Cement Group)

170 ha Jatropha

Plantation (equal

with $ 55,000)

Sustainability of

Plant Oil Supply

170 ha

Jatropha

Plantation

Sustainability of

Plant Oil Supply

170 ha

Jatropha

Plantation

Sustainability of

Plant Oil Supply

Plantation already exist

since 2007

Shell Foundation

(Indonesia) € 75,000

Initial Fee for

CDM Project

(Project AMS-

II.G)

- - - -

Shell' Cookstove Program

has establish in India. For

Indonesia will establish

soon (end of July 2011)

Partner Year 1 Year 2 Year 3

Additional Information

Highlights

Collection target in initial year: 300.000 litres

Selling price: Rp 3.500 / litre Used oil will be bought from food chain for Rp. 1.400 / litre

KFC food chain in Indonesia: 317 stores in 2007 (assumption 50% of them located in Java)


Mc Donald food chain in Indonesia: 112 in 2011 (assumption 50% located in Java)

Emission reduction initial year: 533 tonCO2

The Charity Plan The charity plan is set to collect the donation to fund the project. The idea is to save 1

euro cent from the first 15 million BSH unit sold in Europe. In 2010, BSH has sold 40 millions unit. Suppose in 2011 BSH sales stays the same that means BSH will be able to collect € 150.000 or equal to Rp. 1.898.544.000 within perhaps half a year.

The 1 euro cent donation will be included into the retail price of the product. By doing this, any purchase on the unit sold will add 1 euro cent to the donation automatically. Also, to simplify the payment mechanism, the donation payment will only be available in every purchase with credit card and debit card. Therefore, the customer that want to buy BSH product and be involved in the program will not have to search for 1 euro cent coin.

Many home appliances unit that BSH sells have a price range above € 100. The huge different between the retail price with the donation -1 euro cent - will not harm the price competitiveness of BSH product with those of competitors. Please see examples of mentioned BSH units below.

SIEMENS HB23AB520 BOSCH HBA23B150E BOSCH GSD12A20

Built in oven Built in oven Refrigerator

Retail price € 499 Retail price € 539 Retail price € 299

Charity plan € 0.05 Charity plan € 0.05 Charity plan € 0.05

SIEMENS KG36VV03 BOSCH WAE28162NL SIEMENS WD12D520

Refrigerator Washing Machine Washing Machine

Retail price € 349 Retail price € 469 Retail price € 699

Charity plan € 0.05 Charity plan € 0.05 Charity plan € 0.05

At the same time ,this charity plan can also be used as BSH marketing or advertising strategy as the green issue is involved here. The communication has to be direct and eye-catching which will create a sense of an involvement and contribution in customer’s heart for a better world and living. In a way, their 1 euro cent will make a positive big different half-a-world far in Indonesia. Hopefully this will also help improve BSH sales. The issue will also bring up companies exposure beneficially, on environmental issue to the public.

Retail chain store is the perfect place to sound loud the communication as home appliances products are mainly purchased here. All over Europe, there are many retail chain stores that sell home appliances. Their numbers, like Media Markt and Saturn, are growing up year after year which will positively support the charity plan to be succed.



Highlights

Charity Plan target: collect charity fund €150.000 in less than one year

The customer in Europe is asked to join the program by spending 1 euro cent in every BSH product they purchase

BSH sold 40 millions unit in 2010. The charity counts only for the first 15 million unit sold

c. Supply Chain and Distribution Channel, Collaborator and Partners

The picture shown below represents the supply chain network of BSH Protos project in Indonesia. This supply chain connects all the concerned parties in the business. Further more, these parties and their roles will be described in this part of the report. Look at the picture below for better global view.

Customer This business plan identifies three different potential customers. Each customer may have different type of goods to purchase.

The first customer is small food business. In Indonesia they tend to use gas fueled cookstove.

Household usage is considered as a potential customer too. However, the protos advantage, that is 100-200 liters of oil usage per year compared to 200-400 liters of kerosene, should be made familiar to them.

Biodiesel business is willing to buy the used oil. They need it as a flow of raw material in producing biodiesel.

Key Partner There are several key partners involved here.

Food chain, restaurant, hotels: they play the role as used oil supplier and provider. The used oil will be traded from them with very low price per liter. The chance to collect used oil in a big scale will come from the fast food chain like McDonald and Kentucky Fried Chicken. They use oil in a big amount of it in their daily operation. Their big numbers of restaurants



Indocement (Heidelberg Group): Indocement had planted jathropa in Citeurep, West Java, as vast as 170Ha. The land used for plantation was a former mining site. The plantation has two roles, first as a plant oil source. It can also be used as CDM categorization

Reseller Partnership with local community trade union will hold the key role in the downstream area. This partnership too will empower local residence too. Here are the key roles the local community trade union has to play:

Carry the task as a reseller point for used oil, biofuel and protos cookstove.

They may also be considered as a service point to reach and engange the customers.

Communication center can also be established here. This will support product endorsement, product information and customer feedback.

Other parties rather than local community trade union can be involved too as a reseller. They can be in a form of small family stall, store or shop.

Distributor and Depot Distributor and depot connect many players within the supply chain. The distributor main activity will be transportation. While the depot operates as a storage point of used oil or biofuel. There are three kinds of distributors and two types of depots. The details are given as the following:

Distributor

One distributor is situated between the food chain and biofuel facility. The responsibilities will be included to collect the used oil from the food chain, store it in the depot and transfer it futher biofuel facility and local community trade union.

The second distributor links the biofuel facility and local community trade union. This distributor has to transfer the biofuel out of the biofacility to the biofuel depots and transfer it further to the local community trade union.

The last distributor is simply the Protos distributor. They have simply to ship the cookstove to the selling point, in this case local community trade union.

Depot

The first depot will be used as the storage point of used oil

One more depot will be used as biofuel storage point.

d. Pre Heating Materials 90% rubbing alcohol or “spiritus” as most Indonesian call it, will be chosen for the pre-

heating material. There are many suppliers that might be requested to provide the pre-heating material. Mostly, the deal can be done by any local chemical store.However, the customer will be given the freedom to buy seperately from any parties.



Highlights

Assumption usage for one time light up the cookstove: 25ml

Assumption 4 times a day the cookstove is used: 700ml / week of supply

Selling price per litre: Rp.10.000

Price from supplier: Rp. 9.500

Distribution cost: Rp. 300

e. Plant property and Equipment (Biofuels Factory) The bio facility is a production house to produce the plant oil and filtered used oil. This facility has several main equipment to be invested in. The details are given below:

Jathropa press machine This machine is used to press the jathropa seeds. The outcome is the jathropa

oil. There are several types of such a machine. The electrical one can produce from 300 liters up to more than 2000 liters of oil a day per machine. Very simple designed press machine is given Rp. 2.000.000 price tag.

The machine that the bio fuel intends to invest is the manually operating machine. Therefore, the capacity of the oil the machine can produce is much lower too. As the consequencies, the bio facility will have to own several of it. Capacity can run up to 25 liters a day. The operator number will be added up accordingly to the number of the machines. The facility is planning to have 10 of this machine to cope up with the monthly capacity.

Filtering Machine The same with its name, the machine has the very similar purpose. The

machine filters plant oil and used oil into the more useable form. Its construction is very simple. Basically, it filters the oil through some layers of clothes or tight-structured fabrics. It costs in a range of Rp. 500.000 to Rp. 750.000.

Peeling Machine

This machine will be the most expensive of all the machine the facility should has. It is used to peel out the jathropa fruit to have only the seed as the remaining part. The specification is shown below. The price starts at Rp. 20 millions



.

Oil Gallon and drums The gallons an oil drums are used to store any neccesary oil, from raw material

to the processed oil. The facility should has enough nnumber of them. The number of oil gallon and drum will be adjusted equal to 20% inventory out of total capacity per month.

Highlights

Operational investment Unit Price each Total initial investment

Press machine 30l / day 10 2,000,000 20,000,000

Filtering machine 50l / day 10 500,000 5,000,000

Peeling machine 250kg / hour 1 20,000,000 20,000,000

Oil Gallon 5l / unit 200 50,000 10,000,000

Drum oil 100l / unit 100 250,000 25,000,000

Other equipments 1 1,000,000 1,000,000

Total Rp.81,000,000

Depot The depot is intended to be a storage point. This will act as a distribution

centre for used oil, plant oil, jatrhopa seeds and Protos cookstove. At the begining of year 1, the depot requires Rp 60.000.000. The fund paid will be included office rooms and equipments. The location of the depot accordingly will be measured in a such way that it is the optimal distance from all parties’ perspective.

f. Value Creation Projections (Cost Coverage) See Annexes in Cash Flow Statement



g. Key Assumption Key Assumption

1 Currency Convertion

1 $ = Rp 8,552

1 € = $ 1.48

1 € = Rp 12,657

2 Inflation Rate

6.70%

3 Days, Month and Year

1 Month = 25 workdays

1 Year = 300 days

4 Price from supplier:

Jatropha seed free (from Indocement Plantation)

Used Oil Rp. 1400/ litre (from restauran chain)

Spiritus Rp. 9500/ litre

each price assume increasing relative based on inflation rate

5 All activity is assumed no account receivable and no account payable

6 Price for CER is assumed € 17 /tonCO2/year

h. Business Models Overview (Graphic)

Business Model

Incentivefor retail

US $ 50

US $ 20

Cost Gap

Protos’s COGS

End UserPrice

Key Partner: BSH PT Indocement Tbk. PT Shell Indonesia Potensial CERs

Buyer

Key Activities: Stove distribution Marketing

program Sales activity Fuel supply User training Fuel agency

development

Value proposition: Very economic stove Affordable fuel Easy to get fuel Eco-friendly fuel Easy to use stove Cleaner cooking

Customer

Relationship: Community social

event Membership program Training Discount card for

protos user

Customer segment: Kerosene and

wood users who can’t switch to gas

C and B - Segment Rural and

suburban

Key Resources: Distribution team Sales marketing

team Training team Cookstove

technology

Channel: Direct selling Community based

selling Event exhibition

Cost structure:

Distribution and logistic Marketing and sales activity Training activity

Fuel processing Protos ’s COGS Used oil sales activity

Revenue stream: Sales of stove

Sales of fuel Carbon credit Partner’s CSR Program

Sales of Used oil

<

Fuel Agents• Healthier people

• Happier planet

Young to middle age

The Charity program•



i. Financing Requirement

See Annexes in Cash Flow Statement Projection j. Conclusions

By raising capital fund from charity plan in Europe, involving BSH and all its chain including retailers and customers. We bring the campaign to offer non-cash BSH consumers 1 cent Euro for each purchasing activities. We target to gather amounts for € 150.000. The charity fund will be used to help to register CDM project AMS-I.G and AMS-I.H. The whole business plan which collaborate BSH, PT Indocement Tbk, PT Shell Indonesia will see break-even-point in the first quarter of the 2nd year. The NPV (Net present Value) will be Rp. 1.527.558.148 and IRR (Internal rate of Return) value would be 53% and 44% for MIRR (Modified Internal Rate of Return). We conclude that after implementing these whole program with the partners we have, we strongly believe that our vision “Achieving Healthy Way of Cooking to Support Indonesia Sustainability Environment” will be accomplished.



3. Annexes

a. SWOT Analysis

STRENGTH WEAKNESSES OPPORTUNITIES THREAT

Full support of technical

Ten times lower than kerosene in efficiency

The production of biofuels contributes to secure energy supply

The use of biofuels can reduce GHG emissions

Due to a longer value chain within the national boundaries, biofuel production creates new employment

Numerous availibility of raw material in Indonesia

Availability of large plantation in Indonesia

Cleaner burning, no ash, no soot

Numerous number of employees

Jathropha is not as efficient economically as used oil

Sociazilation of biofuels industry is still limited

Less of governance’s incentive

Unestablished marketing system

Instability of biofuels price

The increasing number of local partners supports for biofuels system in Indonesia from 2007

Adequate plant oil resource for Indonesia

Pro job policy

Pro planet policy

Pro poor policy

Pro growth policy

Local and international investment

The risk of using he land for planting jathropa based on reserarh

Indonesian government policy not stated the full support of such issue

The retail price of gasoline and diesel is lowered by Government of Indonesia because of the drop in global oil rpices

scramble competition of raw materials between foodstuffs and energy

Large number of competitor in this industry

Trend of producer to sell it export rather than import

Negative impact toward environment

b. Competition Anlysis among Cookstoves

c. Projected Cash Flow and Income Statements

Please See Annexes

Protos

(1 Stove) LPG Stove (1 stove)

Kerosene Stove (1 stove)

Woods Stove (1 stove)

Stove's Price Rp. 196,000

Stove Rp 70,000

Rp 200,000 Rp. 40,000 Regulator Rp 100,000

Gas Tank (3 Kg) Rp 140,000

Total Rp 310,000.00

Fuel Price (/unit fuel) Plant Oil Rp. 3,500/ litre Rp. 14,000/ 3 kg Rp. 8,500/ litre Rp. 1,000/kg

Preheating (Spiritus) Rp. 10,000/ litre

Fuel Consumption (/week) Plant Oil 2 - 4 litre 3 Kg 4-6 litre 5 Kg

Preheating (Spiritus) 700 ml

Efficiency 55% 53% 40% 35%

Emission (/unit fuel) Carbon neutral 3 Kg CO2/Kg 2,5 Kg CO2/Kg 1,84 Kg CO2/Kg

Team 16 business plan submission

Business

Transcript of Team 16 business plan submission