Green Investment Opportunity

Short summary

• 3X return in 8 years

• Burgeoning demand for Power and Forest produce

Opportunity

• Phase I– To cultivate rigorously growing trees for • Raw material for woody biomass power generation.• Raw material for Veneer manufacturing(Plywood).

• Phase II– Woody Biomass 3MW Power generation

Opportunity to invest in Man Made Forest for Timber / Biomass

– The demand for timber is rising exponentially.– Biomass need for Clean energy is also on raise.– Supply within the country is just not sufficient and India Largely

depends on imports .

– The demand for Clean Energy is rising, making it a very attracting investestment .

– The prime advantage of investing in timber is that crop is not perishable like most of agriculture produces.

– Harvesting can be timed according market need.

– If need be the trees can be cut and converted into fully qualified timber and stored.

– This tree is naturally termite resistant as this is part of NEEM family.

About Melia Dubia

• Melia Dubia is the fastest growing tree and considerable returns can be expected in a very short period say in about 7-8 years.

• CULTIVATION: – The spacing between row to row and plant to plant shall be 6 feet.– Thus, 1200 saplings are required for 1 acre.– This tree can be cultivated for various reasons Tiber / biomass / Poles / match industry etc

• HARVESTING:– After 2 years 600 plants in the centre can be cut off and sold as poles/biomass, thereby retaining balance 600 trees till the full maturity until 8

years or so.– After 4 years the fresh stems emerging from the plants cut off last time may again be cut off and sold.

• Present day uses– The wood is used for packing cases, cigar boxes, ceiling planks, building purposes, agricultural implements, pencils, math boxes, splints and

catamarans. In Srilanka, it is employed for outriggers of boats. It is suitable for musical instruments, tea boxes and the most importantly in making plywood, as the wood is anti-termite by itself.\

• The details of quality & technical specifications are as follows.The logs had very high moisture contents and were green.

– All logs were round and good for peeling. Roundness seems to be inherent quality of this tree.– Logs peel easily.– Outturn is excellent – 70% & better in fresh cut logs.– Veneer strong and firm.– As a test two small logs were peeled for faces. Quality obtained was acceptable.M.R.Grade Plywood pressed with these veneers and in

combination with other veneers gave excellent results.

About Promoters S.N Farms is Managed by group of Agriculturist, involved in practicing

agriculture from various back grounds having worked in different capacity in various corporate, joining hands for the Growing a Man made forest for the purpose of – Bio mass for power generation– Veneer for plywood industry– For medicinal value– For Match Industry– For packing industry

Current land holding of promoters is around 120 acres in various location near Kunigal/Nelamangala/Magadi/Sira in karnataka

S.N Farms• S.N Farms will engage in various Planting / maintaining / marketing of Various crops/Agro

forest trees.• S.N Farms will provide complete end to end manage service right from

– Sourcing Saplings– Identifying the land– Fencing– Digging Borwells.– Land preparation – Planting Sampling– Pruning / cutting – Manuring – Ploughing– Watering

Funding needs in Phase I

• Land preparation ( bunding)• Fencing• Borewell / drip irrigation• Planting material ( saplings)• Generators• Labor buildings• Running cost

ECONOMICS OF MELIA DUBIA CULTIVATION ( 1 acre)

• Preliminaries / Pitting / Farmyard manure etc. Rs. 30,000• Cost of 1200 rooted plants: Rs. 30 /- each. (Ex-nursery) Rs. 36,000• Freight RS . 14,000• Average Labor cost per acre (4000 * 12 month *8 yrs)/3 Rs. 1,28,000• ADD: Weeding / Watering / Manure etc until 8 years Rs. 1,00,000

• Total Cost Rs. 3,08,000

Revenue• RETURNS;

– 2 Years 400 X Rs. 100 40,000/-– 4 Years 400 X Rs. 100 40,000/-– 6 Years 400 X Rs. 100 40,000/-– 8 Years 400 X Rs. 100 40,000/-– 9 Years 400 matured trees @ 4000 per tree 16, 00,000/-

• TOTAL REVENUE 17, 60,000/-

Profits

• Total Revenue 17,60,000/-• Expenditure 3,08,000/-

Profit = (Total Revenue – Expenditure)Profit = (17,60,000 – 3,08,000)Profit = 14,52,000/-

Backup

Timber – India StoryIndia is likely to face severe shortage of supply of timber to meet its requirement from both domestic and international front. It is estimated that the demand for timber is likely to grow from 58 million cubic meters in 2005 to 153 million cubic meters in 2020. The supply of wood is projected to increase from 29 million cubic meters in 2000 to 60 million cubic meters in 2020. The productivity of timber in India is only 0.7 cu. m/ha/year whereas the world average is 2.1 cu.m/ha/year. The supply of timber is mainly from forest plantations and wood production is showing a negative growth rate. In the absence of adequate supply from domestic sources, the nation has to depend heavily on imports to meet its demand for timber. This will increase the nation’s forest footprint, particularly in South East Asia. In order to minimize the forest footprint, we need to encourage sustainable consumption of timber by promoting forest certification. With the help of GFTN and WWF network, we have actively participated and provided technical inputs to Export Promotion Council of Handicrafts (EPCH) in conducting several supplier summits this year to promote forest certification in India. A study on “Timber Trade and India’s Forest Footprint” has been undertaken as part of “Forest for Life” programme, and the same will be published shortly. Ministry of Environment and Forests, Government of India invited WWF-India to participate and provide inputs to various committees/fora including (i) technical committee on forest certification and (ii) a core group to study applied rates and import duties of the forestry products and their assessment in the multilateral/bilateral trade negotiations.

Supply determinants of Timber Trade in India The Planning Commission, Government of India supported a study on “Supply determinants of timber trade in India”. The objectives of the study are to (i) identify and analyse major determinants of supply of timber trade in India; (ii) Analyse the impact of selected forest conservation measures on long term supply of timber; and (iii) suggest suitable recommendations for sustainable supply of timber without compromising forest conservation measures.

A strong argument, particularly from the proponents of trade liberalization, has been the adverse effects of forest conservation measures on supply of timber (both production and imports) in India. According to them, these measures are major determinants of limiting the supply (both domestic production and imports) of timber and act as non-tariff barriers to trade. On the other hand, conservationists demand effective implementation of conservation measures and regulate supply of timber to save further loss of forests and tree cover outside forests. They argue that forest conservation measures implemented as part of National Forest Policy are not major factors limiting supply of timber in India. The study is proposed to test this hypothesis empirically. The results of the study will also help us to strengthening our programmes and activities on sustainable timber and establishment of India Forest Trade Network ( India – FTN) as part of Global Forest Trade Net work (GFTN).

Source : http://www.wwfindia.org/about_wwf/what_we_do/forests/ttrade/

Woody Biomass Resources Source : http://www.alternative-energy-news.info/woody-biomass-resources/

• Biomass power is the largest source of renewable energy as well as a vital part of the waste management infrastructure. An increasing global awareness about environmental issues is acting as the driving force behind the use of alternative and renewable sources of energy. A greater emphasis is being laid on the promotion of bioenergy in the industrialized as well as developing world to counter environmental issues.

• Biomass may be used for energy production at different scales, including large-scale power generation, CHP, or small-scale thermal heating projects at governmental, educational or other institutions. Biomass comes from both human and natural activities and incorporates by-products from the timber industry, agricultural crops, forestry residues, household wastes, and wood. The resources range from corn kernels to corn stalks, from soybean and canola oils to animal fats, from prairie grasses to hardwoods, and even include algae. The largest source of energy from wood is pulping liquor or black liquor, a waste product from the pulp and paper industry.

Continued…• Woody biomass is the most important renewable energy source if proper

management of vegetation is ensured. The main benefits of woody biomass are as follows:– Uniform distribution over the world’s surface, in contrast to finite sources of energy.– Less capital-intensive conversion technologies employed for exploiting the energy potential.– Attractive opportunity for local, regional and national energy self-sufficiency.– Techno-economically viable alternative to fast-depleting fossil fuel reserves.– Reduction in GHGs emissions.– Provide opportunities to local farmers, entrepreneurs and rural population in making use of its

sustainable development potential.

• The United States is currently the largest producer of electricity from biomass having more than half of the world’s installed capacity. Biomass represents 1.5% of the total electricity supply compared to 0.1% for wind and solar combined. More than 7800 MW of power is produced in biomass power plants installed at more than 350 locations in the U.S., which represent about 1% of the total electricity generation capacity. According to the International Energy Agency, approximately 11% of the energy is derived from biomass throughout the world.

Biomass Resources

• Biomass processing systems constitute a significant portion of the capital investment and operating costs of a biomass conversion facility depending on the type of biomass to be processed as well as the feedstock preparation requirements. Its main constituents are systems for biomass storage, handling, conveying, size reduction, cleaning, drying, and feeding. Harvesting biomass crops, collecting biomass residues, and storing and transporting biomass resources are critical elements in the biomass resource supply chain.

• All processing of biomass yields by-products and waste streams collectively called residues, which have significant energy potential. A wide range of biomass resources are available for transformation into energy in natural forests, rural areas and urban centres. Some of the sources have been discussed in the following paragraphs:

Complete cycle

A host of natural and human activities contributes to the biomass feedstock

Continued…• 1. Pulp and paper industry residues

The largest source of energy from wood is the waste product from the pulp and paper industry called black liquor. Logging and processing operations generate vast amounts of biomass residues. Wood processing produces sawdust and a collection of bark, branches and leaves/needles. A paper mill, which consumes vast amount of electricity, utilizes the pulp residues to create energy for in-house usage.

• 2. Forest residuesForest harvesting is a major source of biomass for energy. Harvesting may occur as thinning in young stands, or cutting in older stands for timber or pulp that also yields tops and branches usable for bioenergy. Harvesting operations usually remove only 25 to 50 percent of the volume, leaving the residues available as biomass for energy. Stands damaged by insects, disease or fire are additional sources of biomass. Forest residues normally have low density and fuel values that keep transport costs high, and so it is economical to reduce the biomass density in the forest itself.

• 3. Agricultural or crop residuesAgriculture crop residues include corn stover (stalks and leaves), wheat straw, rice straw, nut hulls etc. Corn stover is a major source for bioenergy applications due to the huge areas dedicated to corn cultivation worldwide.

• 4. Urban wood wasteSuch waste consists of lawn and tree trimmings, whole tree trunks, wood pallets and any other construction and demolition wastes made from lumber. The rejected woody material can be collected after a construction or demolition project and turned into mulch, compost or used to fuel bioenergy plants.

Continued…• 5. Energy crops

Dedicated energy crops are another source of woody biomass for energy. These crops are fast-growing plants, trees or other herbaceous biomass which are harvested specifically for energy production. Rapidly-growing, pest-tolerant, site and soil-specific crops have been identified by making use of bioengineering. For example, operational yield in the northern hemisphere is 10-15 tonnes/ha annually. A typical 20 MW steam cycle power station using energy crops would require a land area of around 8,000 ha to supply energy on rotation.

• Herbaceous energy crops are harvested annually after taking two to three years to reach full productivity. These include grasses such as switchgrass, elephant grass, bamboo, sweet sorghum, wheatgrass etc.

• Short rotation woody crops are fast growing hardwood trees harvested within five to eight years after planting. These include poplar, willow, silver maple, cottonwood, green ash, black walnut, sweetgum, and sycamore.

• Industrial crops are grown to produce specific industrial chemicals or materials, e.g. kenaf and straws for fiber, and castor for ricinoleic acid. Agricultural crops include cornstarch and corn oil? soybean oil and meal? wheat starch, other vegetable oils etc. Aquatic resources such as algae, giant kelp, seaweed, and microflora also contribute to bioenergy feedstock.

Woody Biomass and Sustainability

• Harvesting practices remove only a small portion of branches and tops leaving sufficient biomass to conserve organic matter and nutrients. Moreover, the ash obtained after combustion of biomass compensates for nutrient losses by fertilizing the soil periodically in natural forests as well as fields. The impact of forest biomass utilization on the ecology and biodiversity has been found to be insignificant. Infact, forest residues are environmentally beneficial because of their potential to replace fossil fuels as an energy source.

• Plantation of energy crops on abandoned agricultural land will lead to an increase in species diversity. The creation of structurally and species diverse forests helps in reducing the impacts of insects, diseases and weeds. Similarly the artificial creation of diversity is essential when genetically modified or genetically identical species are being planted. Short-rotation crops give higher yields than forests so smaller tracts are needed to produce biomass which results in the reduction of area under intensive forest management. An intelligent approach in forest management will go a long way in the realization of sustainability goals.

• Improvements in agricultural practices promises to increased biomass yields, reductions in cultivation costs, and improved environmental quality. Extensive research in the fields of plant genetics, analytical techniques, remote sensing and geographic information systems (GIS) will immensely help in increasing the energy potential of biomass feedstock.

• Bioenergy systems offer significant possibilities for reducing greenhouse gas emissions due to their immense potential to replace fossil fuels in energy production. Biomass reduces emissions and enhances carbon sequestration since short-rotation crops or forests established on abandoned agricultural land accumulate carbon in the soil. Bioenergy usually provides an irreversible mitigation effect by reducing carbon dioxide at source, but it may emit more carbon per unit of energy than fossil fuels unless biomass fuels are produced unsustainably.

Conclusions

• Biomass can play a major role in reducing the reliance on fossil fuels by making use of thermo-chemical conversion technologies. In addition, the increased utilization of biomass-based fuels will be instrumental in safeguarding the environment, generation of new job opportunities, sustainable development and health improvements in rural areas. The development of efficient biomass handling technology, improvement of agro-forestry systems and establishment of small and large-scale biomass-based power plants can play a major role in rural development. Biomass energy could also aid in modernizing the agricultural economy. A large amount of energy is expended in the cultivation and processing of crops like sugarcane, coconut, and rice which can met by utilizing energy-rich residues for electricity production. The integration of biomass-fueled gasifiers in coal-fired power stations would be advantageous in terms of improved flexibility in response to fluctuations in biomass availability and lower investment costs. The growth of the bioenergy industry can also be achieved by laying more stress on green power marketing.