Maximizing Biodiesel Proftis in a Difficult Market

PR Log (Press Release) – Nov 05, 2009 – As biodiesel plant owners know, feedstock accounts for 70% -80% of a plant’s operating cost. It is a commodity over which owners have no control.  We are often retained to assist owners in finding the best feedstock, closest to the plant at the best price, and have been quite successful is assisting.  That said, it is important to remember that feedstock prices are pretty fixed, and while we can sometimes find “good deals” on a particular load, all biodiesel owners are pretty much subject to fairly standard prices that apply to everyone.  Knowing this, we must never forget that the other 20%-30% of a plant’s operating costs are matters that are often completely within the owner’s control.  And, those costs can make a huge difference in profitability!  

Let’s assume that your plant spends a total of $20,000,000 yearly to produce biodiesel.  Of that amount, $4,000,000 - $6,000,000 (20%- 30%) are non-feedstock operational costs.  This is where an audit from an expert can make a difference.  A full scale plant audit, with recommendations, will normally cost less than $50,000, with the initial site visit typically being less than $10,000. Implementing the recommendations typically saves at least one to two percent of the total operational costs, i.e. $200,000 - $400,000 yearly. In recent, difficult market conditions, plant owners have become acutely aware of the effects of saving a penny or two per gallon.  However, maximizing efficiency is not something that should be reserved for difficult market times.  It is the standard by which every plant should operate all of the time.  

While owners cannot control the costs of feedstock, peak efficiency is a must.  We have a team that does efficiency audits.  APinnovations, in conjunction with Lee Enterprises, does efficiency audits for existing owners, and quite often as a review for those considering buying a plant.  If you have never had an outside set of expert eyes look at your plant, perhaps it is time to consider an efficiency audit.  As they say, the "proof is in the pudding" - the ROI most often proves itself.  

About APInnovations.  AP Innovations is a full service design and engineering company.  Danforth and Shook are engineers with 50 years of combined experience in oil processing. Biodiesel production is one division of APInnovations' business. AP Innovations has clients on six continents and are recognized experts in both the biodiesel and oilseed processing industries.  APInnovations, Inc., 1012 East 22nd Street, Stuttgart, AR 72160. (870.673.3030) www.apinnovations.com

About Lee Enterprises. Lee Enterprises is a biodiesel consulting firm specializing in project management, feasibility studies, business plans, and assistance with planning, market analysis, site evaluation, feedstock selection and procurement, process technology, evaluation, offtake distribution, financing, capital budgeting, and contract negotiations (for feedstock, off-take, transportation, construction, site purchase/lease, and plant management).  They also own National Business Brokerage, Inc., a full service business brokerage firm specializing in the buying and selling of biodiesel plants. Lee Enterprises, 1503 East Kiehl Ave., Sherwood, AR 72120.  (501) 833-8511. www.lee-enterprises.com