Team 9 cellulosic ethanol production
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Team 9: Cellulosic Ethanol Production. Ford Baertlein, Jill Fery, Doug Hegney, Paul Harryman, Yu(Mimi) Qu. Industry Background. Since 2005, the U.S. has been the world’s leading producer of ethanol. In 2003 the demand for ethanol in the U.S. began to outpace domestic production.

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Team 9: Cellulosic Ethanol Production

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Team 9 cellulosic ethanol production

Team 9: Cellulosic Ethanol Production

Ford Baertlein,

Jill Fery, Doug Hegney,

Paul Harryman, Yu(Mimi) Qu


Industry background

Industry Background

Since 2005, the U.S. has been the world’s leading producer of ethanol. In 2003 the demand for ethanol in the U.S. began to outpace domestic production.

In 2008, the federal government spent $9.2 billion on ethanol subsidies.

It is forecasted that conventional oil production will peak by 2020.

The U.S. Energy Independence and Security Act calls for 36 billion gallons of ethanol per year to be in the U.S. transportation fuel pool by 2022. Currently the U.S. produces 9 billion gallons.

97% of ethanol produced in the United States utilizes corn as the primary feedstock.


Technology background

Technology Background

Our product will revolutionize ethanol production by providing ethanol producers a means to convert complex sugars into fermentable simple sugars.

Simply put, our process takes plant structural material and converts it into a sugar that can then be fermented into ethanol.

Cellulosic ethanol technology will enable ethanol producers to utilize non corn feedstocks with an increase in output of 30-40% compared to existing technologies.


Opportunities considered

Opportunities Considered

Opportunity #1:Creation of cellulosic ethanol plant that can process non corn feedstocks

Opportunity #2: License technology to users

Opportunity # 3: Enable additional feedstock inputs into existing ethanol facilities by selling them our product


Why opportunity 3

Why Opportunity #3?

Current facilities have the infrastructure to accept our technology

160-200 ethanol facilities are potential customers

Allows entry into the industry prior to full scale cellulosic ethanol production

Allows for further refinement of the technology before large scale capital expenditures


Business model

Business Model

The sale and servicing of a enzyme based cellulosic ethanol reactor. Revenue will come from the initial sale of equipment and an annuity stream from servicing the system.


Other models considered

Other Models Considered

Large Scale Plant – too expensive and high risk.

Licensing – IP protection issues, industry recognition, servicing of product.

Consumer Model – economy of scale, waste issues.


Competitive landscape

Competitive Landscape

Substitute

Products

(of firms in

other industries)

MOD

MOD

Rivalry

Among

Competing

Sellers

Suppliers

Buyers

MOD

LOW

Potential

New

Entrants

HIGH


Strategy diamond

Strategy Diamond

Arenas

Economic

Logic

Staging

Vehicles

Differentiators


Arenas

Arenas

Arenas

Economic

Logic

Staging

Vehicles

Differentiators

  • Where are we going to be

    active?

    • Retrofits of existing facilities

    • New cellulosic ethanol facilities

    • Start nationally with global potential

    • Core technology is enzyme reactor

    • Annuity stream will add revenue


Vehicles

Vehicles

Arenas

Economic

Logic

Staging

Vehicles

Differentiators

  • Means of participating in chosen markets

    • Internal Development

    • Alliances with existing plants to prove technology


Differentiators

Differentiators

Arenas

Economic

Logic

Staging

Vehicles

Differentiators

  • Product/service attributes that beat competitors

    • Increased efficiency

    • Retrofits will be highly customizable

    • Allows industry to become more socially responsible

    • First to market combined with high switching costs


Staging

Staging

Arenas

Economic

Logic

Staging

Vehicles

Differentiators

  • Timing, pace and sequencing of strategic moves

    • Stage 1: Retrofits

    • Stage 2: New cellulosic ethanol facilities


Economic logic

Economic Logic

Arenas

Economic

Logic

Staging

Vehicles

Differentiators

  • How will returns be obtained?

    • 30% gross return on initial installations

    • 50% gross return on servicing the system

    • Future products developed to solve problems in the industry


Keys to success

Keys to Success

Technology has to work

Speed to Market

Branding

Continual innovation


Questions

QUESTIONS?


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