Development of the commercialization strategy for PNOC-EDC Energy Research and Development Center Small-Scale Coco Methyl Ester (CME) Production Plant / Jose Edmundo P. Fajardo

Year : 2007

Number of Pages : 52 leaves

Adviser : Prof. Edison D. Cruz

Executive Summary

The ERDC Small-Scale CME Production Plant is the first to its kind in the Philippines. It is an output of ERDC long years of R&D on alternative fuels. The commercialization of the technology will complete the cycle of innovation. The implementation of Biofuel Act of 2006, the first of its kinds in Asia, provided an impetus for the commercialization of the technology. The increasing demand for diesel will reflect a growing market for biodiesel. Therefore it is the opportune time to market the CME production plant. The model for this business will be "direct selling" or "build and transfer". This business model provides the best option considering the current resources of ERDC. ERDC shall design, build, test-run and turnover the CME plant to its buyer. The client will also be provided an option for ERDC to provide their chemicals (catalyst, methanol, etc.) and service contracts. Based on the financial assumptions, the project shall have an internal rate of return (IRR) of 22 percent and a payback period of 2.5 years. Based on EDC's corporate standards, these are acceptable ratios. This shows that this endeavor is a good proposition.