Procurement strategies for alternative fuels
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Procurement Strategies for Alternative Fuels. Mark Mutter Cement Performance International, UK. Procurement Strategies for Alternative Fuels. Introduction Alternative Fuels History Defining the relationship Pricing and relationship Longer term supply Supply chain developments.

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Procurement strategies for alternative fuels

Procurement Strategies for Alternative Fuels

Mark Mutter

Cement Performance International, UK


Procurement strategies for alternative fuels1

Procurement Strategies for Alternative Fuels

  • Introduction

  • Alternative Fuels History

  • Defining the relationship

  • Pricing and relationship

  • Longer term supply

  • Supply chain developments


Alternative fuels history

Alternative Fuels History

  • Price driven development from both cement and waste industry

  • Developments in the emissions trading schemes

  • One-off incidents – e.g. animal meal

  • Global reduction in CO2 emissions


Defining the relationship

Defining the relationship

  • Cement industry and waste industry vastly different

    • Cement – high margin, protected prices, stable

    • Waste – lower margin, ever increasing legislation, unstable

  • Cement industry : Waste = Profit

    • Failed to understand waste industry

    • Wanted all the gain

    • Progressively lost out on volumes of waste


Defining the relationship1

Defining the relationship

Cement industry failed to consider the relationship

Supplier or customer?

Other outlets for waste industry

Balance of power

Availability to take waste


Defining the relationship2

Defining the relationship

  • From both parties require

    • Credibility

    • Reliability

    • Understanding

    • Commitment


Pricing and relationship

Pricing and Relationship

  • Treat the waste supplier as a customer

  • Understand the economics

  • Be up front with the costs of use

    • Trials, plant, extra cleaning, laboratory testing

  • What are the give aways?

  • Build long term relationships


Long term strategies

Long term strategies

  • Production line of fuels

    • 1 new fuel per year

    • Replaces fuel or maintains revenue stream

  • Awareness of fuel impact required

  • Need to adapt to each new fuel

  • Very resource intensive


Long term strategies1

Long term strategies

SOLVENT

WASTE WATER

CARFRAG

GRATE

PETCOKE

TDI

KILN

SOLVENT

WASTE WATER

ANIMAL MEAL


Long term strategies2

Long term strategies


Long term strategies3

Long term strategies


Supply chain developments

Supply Chain Developments

Strategic alliances

Stabilisation of market

Ties up availability

Waste Processing companies

Designer fuel using many waste sources

Provides flexibility to all

Reduces resource requirements

Maintains revenue streams


Procurement strategies for alternative fuels

  • Waste Processing Model

PRODUCERPROCESSINGCEMENT PLANT


Procurement strategies for alternative fuels

  • Waste Processing Model

WASTE PRODUCERPROCESSINGCEMENT PLANT


Conclusions

Conclusions

Need to overcome history

Need to understand

Business dynamics

Economics

Need to build portfolio of fuels

Latest developments are for blended fuels through waste treatment companies


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