The proposed investment social project involves the use of waste from local woodworking enterprises in the form of wood sawdust and chips for the production of fuel pellets (pellets) with a production capacity of 3 t/hour, followed by its sale to enterprises and private individuals of Ukraine and for export to EU countries. The territory is a land plot with a partially concreted surface of 0.6 ha, cadastral number 3222788300:04:001:0021, share contribution of the participant.
1.1 Description of the project
As part of the project, it is planned to build a factory for the production of pellets from wood waste of local woodworking enterprises for the needs of local enterprises and private households, as well as for export supplies to EU countries. The factory will be certified in accordance with the requirements of the EU En plus A1 standard, which will ensure high quality of products with the help of modern automated production control systems. The organization of sales of commercial products will be carried out by the partner - Biofuel Center LLC (co-founder and managing company of the cooperative). The secondary product produced by the factory will be briquettes (production from raw materials that will be rejected by quality control according to En plus A1) for the needs of private households in Ukraine. Also, a by-product will be ash of organic origin, which will be sold as fertilizer or given free of charge to members of the cooperative.
According to the project, the factory will work for 6 months (March - August) in three shifts of 150 working days and for 6 months (September - February) in one shift of 120 working days per year (12,000 tons of marketable products). Up to 30 days are allocated for scheduled and preventive repairs (PR). The number of working days for the factory is calculated based on the instructions and recommendations of the manufacturers of the main technological equipment and on the previous experience of working with similar equipment in Ukraine.
The main reasons for implementing the project:
1. an investment-attractive project for the production of "hard currency" - renewable energy fuel;
2. providing the market of Ukraine and the EU with certified solid fuel, which will increase the energy security of the state and allow to reduce the consumption of fossil fuels by enterprises and private households;
3. the project solves the issue of environmental pollution of the region with wood waste;
4. the project will lead to the creation of new jobs and a reduction in CO2 emissions in the future (it is possible to use CO2 for capture and supply to greenhouse enterprises in the region);
5. waste-free production, provided by the use of raw materials that will be rejected by quality control according to En plus A1, for thermal treatment of raw materials during the production of pellets (incineration).
1.2 Market opportunities
The factory can sell the produced fuel pellet with high profitability thanks to the optimal production system, which provides:
- the maximum intensity of production in the season of minimum cost of raw materials and optimal energy consumption of production;
- the accumulation of warehouse stocks of fuel pellets with the minimum cost during the period of the minimum cost of raw materials;
- long-term contracts with preliminary purchase of raw materials from suppliers at minimum cost;
- signing contracts for the supply of pellets with compliance with the planned profitability to direct consumers of the domestic market and for export to EU countries.
1.3 Investments / financing and main indicators of the project
The main technical and financial indicators of the project are given in the table here.
1.4 Advantages of the project
The advantage of the project is the effective use of waste from local woodworking industries with the creation of a highly profitable product, the need for which is growing every year, mainly Ukrainian equipment taking into account refinements and engineering innovations (more than 7 years of production experience), the optimal financial scheme of the enterprise and wide opportunities for product sales.
1.5 Exit strategy
The developer assumes that investors will be able to exit this business project for maximum profit. After the factory has made a full return on investment (4 years), it will be most expedient to sell its shares as a stable business, ideally in the form of an IPO on one of the EU exchanges. According to the decision of the members of the cooperative, a decision can be made regarding the transformation into a private joint-stock company with the transformation of the participants' shares into the corresponding packages of shares - precisely for the possibility of their sale with maximum profit. The need for "green" energy and, accordingly, its fuel component in the form of fuel pellets made of wood, continues to grow, the new requirements of the EU and the international community regarding the control of CO2 through taxation add financial attractiveness to this project. Accordingly, we can safely predict the cost of selling the factory through IPO at the level of 3-4 times the nominal value. The optimal time of sale is 2027-2028.
1.6 Reduction of CO2 emissions
Since the fuel and raw material for the operation of the factory is completely organic biomass without impurities, it is possible to organize the capture of CO2 during the burning of our fuel pellets by customers - greenhouse farms or food industry enterprises.
1.7 Additional environmental protection
The factory will offer the cities of the Kyiv region and members of the cooperative organic ash free of charge as a substitute for technical salt and chemical reagents used to ensure snow melting and by farms as fertilizers. This will significantly reduce chemical pollution in the region.