Business Plan 2010 PDF

Business plan to build a plant for the production of alternative fuels.
Table of contents
Executive Summary ........................................................................................................................................................ 4
1. A general description of the company ................................................................................................................... 9
2. Project site ............................................................................................................................................................. 10
3. Problems of this region, which will be partially solved after this project ............................................................... 15
4. The proposed technology ...................................................................................................................................... 16
4.1. Technological scheme of the project............................................................................................................... 16
4.2. Sorting complex .............................................................................................................................................. 17
4.3. The biogas plant .............................................................................................................................................. 18
4.4. Accelerated composting of mixed waste......................................................................................................... 18
4.5. Gasifying unit.................................................................................................................................................. 20
4.6. Boiler plant for solid fuels. ............................................................................................................................. 20
4.7. Complex briquetting wood and agricultural waste ......................................................................................... 21
4.8. The overall layout of the plant ........................................................................................................................ 22
4.9. Architectural solution...................................................................................................................................... 23
5. Characteristics of products and services............................................................................................................. 24
5.1. Services for household waste disposal ............................................................................................................ 24
5.2. Waste............................................................................................................................................................... 24
5.3. Biogas ............................................................................................................................................................. 24
5.4. Alternative fuel ............................................................................................................................................... 24
5.5. Delivery of heat and electricity ....................................................................................................................... 25
5.6. Prices of manufactured products and services ................................................................................................ 25
6. Marketing plan ...................................................................................................................................................... 26
6.1. Market analysis of raw materials and finished products ................................................................................. 26
6.1.1. Market analysis of raw materials ............................................................................................................ 26
6.1.2. Analysis of market ready products and services offered......................................................................... 28
6.2. Potential clients ............................................................................................................................................... 31
6.2.1. Consumers on the removal and recycling of waste ................................................................................. 31
6.2.2. Consumers are recycled .......................................................................................................................... 33
6.2.3. Potential consumers of alternative fuels ................................................................................................. 34
6.2.4. Consumers of heat and electricity ........................................................................................................... 37
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6.3. Competitor analysis......................................................................................................................................... 37

6.4. Marketing Strategy.......................................................................................................................................... 38
6.5. Pricing ............................................................................................................................................................. 41
6.6. Sales forecast .................................................................................................................................................. 41
7. Operating plan ...................................................................................................................................................... 42
7.1. Implementation plan ....................................................................................................................................... 42
7.2. Operational plan in the area of waste management......................................................................................... 44
7.3. Operational plan in the production of wood alternative fuels ......................................................................... 45
8. Financial plan ........................................................................................................................................................ 46
9. Conclusions ............................................................................................................................................................ 57
Author and Technical Project Manager: Oleksandr Novykh, Ph.D

Executive Summary
Project Title Plant for processing solid waste to obtain heat
and electricity
The project The project includes construction of a plant for
processing solid waste to obtain heat and
electricity using high-temperature gasification
technology, as well as the production of
environmentally friendly fuel - wood pellets.
Project Type Creating a new facility for production
Name enterprise TOV "Veles-Vauche"
Region 474, Shevchenko, 18006, Cherkassy, Ukraine
Estimated start date September 2010
Project Duration 60 months
Project Participants Team:
1. Ryasik Andrey, director
2. Novykh Alexander, Ph.D, Technical Director
3. Volkov Mikhail, specialist
4. Bondarenko, Yuri, Ph.D, specialist
Contact zip code - 18006, Phone: +380472710080
+380472715242 Mobile: +380634957088 Fax:
+380472430302 E-mail:
alexandr.novykh@gmail.com
Problem Description
The problem of solid waste management. The problem of solid waste management exists
throughout the world. In Ukraine, the problem is particularly acute in the Cherkassy region. The
population is about 1.5 million people, which leads to the formation of more than 400 thousand tons
of solid waste per year. Moreover, there is no existing plant to handle this domestic waste. All the
garbage without sorting and recycling is exported to landfills, which are overcrowded and have long
exhausted their useful service life. Construction of new landfills, in accordance with new
environmental regulations requires large capital investments. The use of existing and new
technologies, including recycling, can significantly reduce the burden on landfills.
The Energy Challenge. In Ukraine, we have an acute problem with affordable energy. The recent
sharp rise in natural gas prices, which is traditionally the dominant energy source for the Ukraine, led
to a severe crisis. Using waste as a fuel source, as is done in many countries, can partially solve this
problem.
Environmental problem. Existing Municipal Solid Waste Landfills in the Ukraine were created
during Soviet times and do not meet modern environmental standards. The process of organic waste
decomposition results in the release of a large amount of greenhouse gases (Methane and CO2) to the
atmosphere. Additionally, they have experienced fairly frequent fires at these landfills, especially in
the warmer months, which lead to the release of large quantities of hazardous substances to the
atmosphere. Finally, most landfills have no special devices for collecting and treating leachate, which
leads to contamination of groundwater and nearby lakes. This has resulted in extensive areas of the
Ukraine being declared ecological disaster zones.
Solution and Technology

This project envisages the construction of a plant for recycling and processing municipal solid waste
in Smela (center of Cherkassy region). It will have a capacity 150,000 tons per year. This project will
provide services to the group of cities within a radius of 50 - 70 kilometers of Smela including:
proper Bravely, Cherkassy (regional center), The Settlement, Kamenka, and others. The population
of this area is over 500,000 people.
 sorting complex, which provides a divides the incoming waste into recyclable materials and
The composition of the project includes four main technological components:
 complex for advanced composting of the organic fraction of waste, such as food materials to
raw materials for the rest of the facilitiy;
 gasifying and generation complex, which generates combustible gases used in the power
produce biogas to fuel its own trucks;
 complex for production of wood pellets.

plant to generate heat and electricity energy;
 First, the Cherkassy region generates a very large amount of wood waste requiring disposal;
The last set is included in the project for three reasons:
 Second, the production of wood pellets (for heating) requires a fairly large amount of thermal
 Third, the market for wood pellets in the world is significant and growing.
and electrical energy;
Thus, by using the combustible fraction of municipal solid waste (MSW), which is not an
environmentally friendly fuel, we significantly reduce the production cost for these pellets.
As a result, this project would solve three problems at once. On the one hand, it enables us to solve
the problem of disposal of MSW and almost completely eliminates the negative impact of waste
decomposition on the ecology of the area. The remaining solids, after the gasification process, will
not exceed 10 - 15 percent of the incoming mass waste and as a result of the high-temperature heat
treatment will be completely inert. This remainder can be used for remediation of existing
landfills. On the other hand, the project allows us to reduce the energy problem in this region of
Ukraine as excess heat and electrical power can be distributed locally after the production of an
environmentally friendly wood fuel.
Team
The initiators of the project are TOV "Veles-Vauche" and the Smelyanskaya city administration. At
the end of 2009 Smelyansky city administration held a design competition for MSW disposal. The
winner of this competition was TOV "Veles-Vauche". As a result, TOV "Veles-Vauche" and the
Smelyansky city administration concluded an investment agreement, according to which TOV
"Veles-Vauche" assumed responsibility for all functions of waste management in the city, and
identified a 16-hectare plot of land for the construction of the plant.
In February 2010, the City board authorized the design work. The project is also supported by the
regional administration. The main executors of the project are employees of TOV "Veles-Vauche":
1. Ryasik, Andrey, director of LLC "Your Velez. Dealing with the problems Waste Management in
the Cherkassy region since 2001.

2. Novykh, Alexander, Ph.D., a specialist in power plants and heating engineer. Since 2003,
involved with deals for waste disposal. Completed internships in leading companies in Europe,
specializing in recycling waste.
3. Volkov Mikhail, an expert on power plant design and operation. During the 2001 - 2009 period,
he organized several facilities for the disposal of electronic devices and household appliances.
4. Yuri Bondarenko, Ph.D., an expert in toxicology and environmental pollution.
In addition, the project involved the State Design Institute "Promtehnologiya" and French company
"Malvina» SARL. The latter since 2002, has manufactured and sold wood pellets for the European
market.
Another project partner is the LLC "Ukrainian ecology, which owns in the city Dnepropetrovsk plant
for waste incineration.
Competitors
On the Ukrainian market there are several large companies involved in the treatment of solid waste,
such as "GreenCo", "Viola", "Remondis. However, they only deal waste removal and surface
grading. They are not involved with downstream processing of waste, particularly the production of
heat and electricity.
Project risks
Possible risks of the project should be attributed only to political and marketing, but the likelihood
and magnitude of these risks is small enough. The problem of waste disposal will always exist,
regardless of the political situation. The market for wood pellets has steadily increased for several
years around the world. Prices for fossil fuels are also generally increasing.
Business Model
 The fee for disposal of solid waste. Today in Ukraine people and businesses pay for the removal
After this facility is operating, revenues of the enterprise will consist of the following income:
and disposal of waste. Over the past few years at least 95% of these fees are paid regularly. The
current rate for waste disposal in Ukraine is $5/ton, providing an annual income to the enterprise
 Proceeds from sale of wood pellets. Presently, the wholesale price for wood pellets is
of $750,000.
$150/ton. The plant will produce at least 20,000 tons per year. This will provide an annual
income to the enterprise of $3,000,000. We already have a preliminary contract between TOV
"Veles-Vauche" and "Malvina» SARL to supply this full amount of wood pellets in Europe.
 Proceeds from sale of refuse derived fuel (RDF) briquettes to Ukrainian cement plants. The plant
can produce at least 30,000 tons of RDF. One ton of RDF replaces 500 m3 of gas, which has a
value of at least $ 100/m3. Today there is a very small RDF market in the Ukraine. However with
the increasing energy costs, this should develop in the near future. Even with a starting price of
 Proceeds from the sale of thermal energy to nearby homes and factory enterprises. From the plant
$30 per ton, the annual income will be $ 900,000.
we will build several long pipelines to homes and businesses where we can sell the excess heat
energy. Presently, thermal energy for the general Ukrainian population has a value of $40/Gcal,
and double that for businesses. Excess thermal power from the plant is estimated at 5 MW, which
corresponds to approximately 35,000 Gcal per year. As a result, the annual income business
under this heading will be $ 1,400,000.
As a result, the minimum annual income of the enterprise is $ 5,150,000. As the market for RDF
develops, this could exceed $ 6,050,000.

According to our calculations, the current expenditure on staff salaries, purchase of raw materials for
wood pellet production and overhead costs will not exceed $ 3,000,000.
30000000
25000000
20000000
Gross sales
15000000
Total direct costs
Total fixed costs
10000000
Net profit
5000000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
-5000000
Investments
To implement this project requires total investment of $ 10 million. This amount includes the cost of
acquiring the necessary equipment, design and construction and installation work. The company is
prepared to invest their own funds in this project.
All the necessary contracts with U.S. suppliers of equipment have already been concluded. In
addition, there is a preliminary letter from the U.S. Export-Import Bank to participate in this project.
The need for investment

18000000
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

12000000
10000000
8000000
6000000 Interest payments on loans

Repayments of loans
4000000
2000000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

A general description of the company

The company TOV "Veles-Vauche" was established in 2008. The main activity is development and
implementation of projects for thermal treatment of municipal and industrial solid waste, as well as
projects for the production and use of alternative solid fuels. At the first stage of the company TOV
"Veles-Vauche" acted only as a consulting company in the field of waste treatment technologies and
alternative energy. In 2008, contacts were established with many world manufacturers for recycling
equipment. Starting in 2009, the leadership the company decided to build its own waste recycling
plant to produce heat and electricity. In this case, the term "waste" should be understood not only
household waste, but waste of Agriculture and Forestry, industrial plants, etc.
Professionals who are working today in the company, including founders, have been engaged in
problems of waste and alternative energy for over 10 years. They have extensive experience in these
 Ryasik Andrey, director of TOV "Veles-Vauche". Dealing with the problems Waste
areas. The management team for the project includes the following specialists:
 Novykh Alexander, Ph.D., a specialist in power plant and heating engineer. Since 2003, close
Management in the Cherkassy region since 2001.
deals with waste disposal. Trainee at leading enterprises in Europe, specializing in Waste
 Volkov Michael, an expert on power plant, during 2001 - 2009 years organized several
management.
 Bondarenko Yuri, Ph.D., an expert in toxicology and pollution environment.

productions for disposal of electronic devices and appliances.
The company's management is well aware of the difficulty in implementing such a project alone,
particularly as we have already implemented similar projects in Ukraine. In connection with this, the
company's management is actively working to attract potential partners and stakeholders in the
project.
 Company "Ecology of Ukraine", which deals with household waste disposal in the city of
At present partners of this project are:
 Company "Promtehnologiya", which is engaged in designing such plants.

Dnepropetrovsk and owns waste incineration plants.
 French company "Malvina" SARL, which is engaged in the wholesale and retail trade of fuel
pellets and briquettes, etc.
Company specialists developed the concept of the project, which will be described in this document.

1. Project site
The project will be implemented in the
Smela Cherkassy region which is located
in the heart of the Ukraine. This region
was selected for the project primarily
because there is no waste processing plant
in the area. In 2009 the Smelyanskaya city
administration announced a contest for a
project to construct a waste processing
plant. The winner of this contest was the
company TOV "Veles-Vauche". As a
result, an investment agreement was
signed with the urban Smelyansky
Administration, according to which all the
functions of waste management in the
region were transferred to TOV "Veles-
Vauche".
In addition, the company TOV "Veles-Vauche” has been allocated a plot of land of 15 hectares for
construction of the plant. Copies of the documents are found in the appendix.
The project provides for the handling the waste from a group of cities that are located in within 50
kilometers of the plant. This is the city itself Smela, the regional center and Cherkassy regional
centers of Gorodiche, Kamenka, and others. Total population of these cities is more than 500,000
people.





2. Problems of this region, which will be partially solved after this project
Today in the Ukraine and in particular in the Cherkassy region there are four interrelated problems
that require immediate solutions.
First, it is the energy problem. The sharp rise in Ukrainian natural gas prices, the traditional and
dominant energy source, led to a severe heating crisis. The use local renewable fuel sources, such as:
wood, agricultural and household waste, can partly solve this problem, as is done in most countries
of the world.
Second, this problem of recycling of solid waste. In Ukraine, this problem is particularly acute in
the Cherkassy region. The population of about 1.5 million people, creates over 600 thousand tons of
solid household waste per year. Moreover, there is no existing plant processing this household
waste. All of the garbage is transported without sorting and processing to landfills, which are
overcrowded and have long exhausted their service life. Construction of new landfills, in accordance
with new environmental requirements, requires large capital expenditures. Existing recycling and
processing technology can significantly reduce the burden on landfills and provide a fairly large
amount of heat and electrical energy.
Third, an environmental issue. Existing Municipal Solid Waste Landfills in the Ukraine were
created during Soviet times and do not meet modern environmental standards. The process of organic
waste decomposition results in the release of a large amount of greenhouse gases (Methane and CO2)
to the atmosphere. Additionally, they have experienced fairly frequent fires at these landfills,
especially in the warmer months, which lead to the release of large quantities of hazardous
substances to the atmosphere. Finally, most landfills have no special devices for collecting and
treating leachate, which leads to contamination of groundwater and nearby lakes. This has resulted in
extensive areas of the Ukraine being declared ecological disaster zones.
Fourth, the problem of unemployment and low wages. In Ukraine, there always was a problem
with high unemployment and low wages. In the present global economic crisis, this problem in the
Ukraine is even more acute. Millions Ukrainians today leave home to work abroad, often illegally. At
the same time, Ukraine pays Russia billions of dollars for natural gas, and thus creates additional jobs
in Russia rather than in Ukraine. Also, wages in the natural gas industry in Russia is ten times greater
than the largest wage in Ukraine. If the Ukraine created a major program to provide local fuels, it
will create millions of new jobs with a high income.
In Ukraine today hundreds of thousands of people are busy, sorting and collecting recyclable
materials, but they usually work illegally and do not declare their income. These four issues are
inextricably linked, because the solution to one of them automatically leads to the solution of the
other three. Today there is a temporary means to address these four issues costing billions from the
budget, but this is not a desired permanent solution.
This project will solve most of these problems in this region. In addition, it can serve as a
demonstration project. Exactly this same problem exists today in all regions of Ukraine and
there they need to be addressed.

3. The proposed technology

3.1. Technological scheme of the project

This project envisages the construction in the city Smela (center of Cherkassy region), a plant for
recycling of municipal solid waste with a capacity 150,000 tons per year. As can be seen from the
 sorting complex, which provides a divides the incoming waste into recyclable materials and
scheme of the project includes five main technological units:
 complex for advanced composting of the organic fraction of waste, such as food materials to
raw materials for the rest of the facilitiy;
 gasifying and generation complex, which generates combustible gases used in the power
produce biogas to fuel its own trucks
 complex for production of wood pellets.

plant to generate heat and electricity energy;
 First, the Cherkassy region generates a very large amount of wood waste requiring disposal;
The last set is included in the project for three reasons:
 Second, the production of wood pellets (for heating) requires a fairly large amount of thermal
 Third, the market for wood pellets in the world is significant and growing.
and electrical energy;
Thus, by using the combustible fraction of municipal solid waste (MSW), which is not an
environmentally friendly fuel, we significantly reduce the production cost for these pellets.
4.2. Sorting complex

The sorting line is designed for the separation of mixed waste. The line includes:
1. Primary crusher for crushing of bulky waste and break down packages;
2. Disc separator to separate waste according to size;
3. Sorting table;
4. Magnetic separator to separate black metal;
5. Dynamic separator for separating non-ferrous metal;
6. The secondary crusher for crushing waste;
7. Press for briquetting recycled materials.
This allows the sorting line to sort mixed waste and separate from it PET bottles, metal, glass and
waste paper. The remaining fine fraction, including organic waste, paper, plastic, etc., are fed first
into the secondary crusher for grinding, and then into a drying chamber, where lime is added to
improve the fermentation process of organic waste.

4.3. The biogas plant

Biogas is the gaseous product obtained as a result of anaerobic (in the absence of air) fermentation
(digestion) of organic substances. Raw materials for the biogas plant can include organic catering
waste, agricultural waste, brewer's grain, beet pulp, sewage, and manure from cattle, pigs, or poultry.
This gas, after the removal of CO2, is methane and can be used instead of conventional natural gas
for heating and/or making electricity. It can also be compressed and used for fueling cars, stores, and
pumps. Another useful product is a high quality compost – an excellent fertilizer for agriculture. Its
application has increased crop yields by 40 - 50%.
4.4. Accelerated composting of mixed waste

The raw material in the gasification installation can be pre-shredded waste. However, it has certain
 First, the waste typically contains 40% water, which reduces the calorific value of this fuel by
disadvantages:
 Second, the waste contains inert materials that do not generate synthesis gas.
50 to 65%.
 Third, most importantly, the waste must be processed quickly after receipt at the plant. It
cannot be stored for extended periods or it will rot and create foul odors. At the same time,
additional thermal energy is needed in the winter compared to the summer.
In view of these shortcomings, the project envisages the production of household RDF waste
briquettes. The essence of this production is aerobic composting of the organic fraction of the waste,
followed by drying and briquetting. This product can be stored for a long time and delivered to the
boiler units for use as fuel, which expands the application possibilities.
Aerobic composting can be done by storing waste for up to 90 days (depending on ambient
temperature) in open areas of the plant and periodically mixing it with special machines.

To expedite the process, we can cover the piles with plastic wrap. Also to accelerate the composting
process we can lay heating pipes under the piles. The advantage of this composting method is its
simplicity and low cost. However, this method requires a large area, because the process requires 45
to 90 days for completion.
This project provides for the application of accelerated composting to the organic fraction of
household waste by the addition of quicklime. In this case, the process only requires 3 hours. The
waste is loaded into the mixer; lime is added and it is continuously mixed.
Three hours later, we have a dry product that contains fine paper, plastics,
textiles, dry organic residue and inert materials (broken glass, sand,
stones). The inert materials can be easily removed with the simplest air
separator. Finally, the combustible mass is fed to the press for briquetting.
As a result at the end, we have a fuel with calorific content of at least 12 -

15Mj/kg. One ton of fuel can replace approximately 400m3 of natural
gas. This fuel can be stored almost indefinitely. Abroad, it is widely used
for industrial purposes. It is environmentally friendly, and the presence of
lime in the fuel virtually eliminates the formation of dioxins when burned.

4.5. Gasifying unit

The essence of gasification technology is the high-temperature heating (~1300°C) of solid household
waste. This forms synthesis gas (CO and H2), which is then burned in a furnace or boiler.
4.6. Boiler plant for solid fuels.
NEED SOME TEXT TO DESCRIBE THIS PORTION OF THE

PLANT???

4.7. Complex briquetting wood and agricultural waste
 silo of raw materials;

The complex includes the following main elements:
 Drum drier with hot air generators;

 Briquette press;
 The drive finished products.
Briquetting process is forcing raw material

through holes in the matrix with moving
rollers. The advantages of this particular press
lies in its universality. With this press we can
convert wood and agricultural residues, waste
paper, plastics, RDF.

4.8. The overall layout of the plant

4.9. Architectural Rendition
This layout for the project technology is optimal for the Ukraine and utilizes current
technology. Moreover, this technology allows us to obtain the maximum profit for waste treatment
and rapid return on the project. The company, "Veles-Vauche", has negotiated with all suppliers of
equipment and concluded supply contracts.

5. Characteristics of products and services

After the implementation of the project this company will supply products and provide services to
 Removal and disposal of solid waste and industrial waste;

the public and businesses, namely:
 Waste sorting and separation of recyclable materials;

 Production of alternative fuels for private households and industrial enterprises;
 Supply and installation of heating and power generating plants;
 Delivery of alternative fuels to the population and the large power plant;
 Delivery of heat and electricity to the population and businesses.
5.1. Services for household waste disposal
The company will provide removal services within the area identified and transport the waste to the
plant via their own garbage trucks. The cost of this service today in Ukraine is not very
high. However, waste is the main raw material of this company and the provision of this service is
mandatory, although not very profitable. Some companies currently receive raw materials from other
collection firms. They then pay for this transportation.
5.2. Waste
 15,000 tons of waste paper;

Sorting complex will provide a selection of general waste following recyclables:
 3,000 tons of metal;

 3,000 tons of glass;
 4,500 tons of plastic (mainly PET bottles).
All this is compacted recyclables into bales and sent to specialized factories.
5.3. Biogas
The biogas plant will process about 20,000 tons of organic and agricultural waste, including sewage
sludge, to produce about 4 million m3 of biogas. Basically, this biogas will be used for needs within
the enterprise.
5.4. Alternative fuel

We will produce about 40,000 ton of RDF fuel from the waste. As was already noted, this fuel is not
very clean. Combustion of it requires special technology and equipment to prevent environmental
pollution. This fuel is suitable for use with high temperature burners in the plant or other industries
such as cement plants and steel mills. Burning RDF in domestic boilers is undesirable.
We have an entirely different matte with the fuel that is produced from wood and agricultural
waste. Today, pellets and briquettes can be made from many kinds of wood and agricultural
waste. The most common are shown below:

Such fuel is completely environmentally friendly and can be used to domestic heating. Calorific
value of fuel slightly inferior coal, but its ash content is 10 times lower than that of coal. The
complex for the production of wood fuel pellets and briquettes provides for the production of
20,000 tons per year.
5.5. Delivery of heat and electricity

The project envisages the installation of five gasifying installations. Total power these plants is 2.5
MW of electricity and 10 MW of thermal energy. Part (20%) of the electrical and thermal energy will
be used for the needs of this plant, the rest will be supplied to the population and the nearby
industrial enterprises.
5.6. Prices of manufactured products and services

Unit of Cost
Name of product or service
measure USD
Garbage collection Services M3 3
Waste management services M3 2.5
Electricity (green fee) KWh 0.18
Thermal energy GCal 25
Waste (recycling) tons 100
Glass (recycling) tons 38
Metal (recycling) tons 190
Plastic (recycling) tons 380
Biogas tons 100
RDF granules tons 50
Wood pellets tons 120

6. Marketing plan
6.1. Market analysis of raw materials and finished products

Before we proceed with the development of this project, specialists for "Veles-Vauche" completed a
detailed market analysis of raw materials and finished products. It was critical for successful
implementation of the project.
6.1.1. Market analysis of raw materials
 solid household and industrial waste;

This project uses the following raw materials:
 Waste forestry;
 Waste from agriculture;
 quicklime.
The amount of solid waste was determined by the number residents in this region and the number of
industrial and utility companies. Statistics for the last 10 years show that, on average, per capita
production was at least 1 m3 of solid waste per year. It is assumed that this amount of garbage was
gathered from the population and transported to the landfill. The amount of generated waste is
believed to be at least 2 times greater. In Ukraine, it is still common for people to burning waste
themselves in their house yards. Some waste is exported for disposal in illegal dumps, etc. In this
project we agreed to use known amount of collected waste as the available raw material to this
plant. This waste will be ensured at all times. The remaining amount of waste is not included in this
plant design.
Morphological composition of solid waste depends on many factors. The main ones are: the level
of the population, area of residence, climatic zone, etc. Various studies conducted in the Ukraine in
recent years showed varying results. These differences have not been resolved at present.
The most serious study on the morphological content of Ukrainian debris was conducted in 2004
under the TACIS program in the Donetsk region. Although Ukrainian experts have criticized these
studies due to the fact that they did not take samples from the containers used by individuals who
collect recyclable materials. The most important issue is the amount of recycled materials in the total
mass of waste. This is highly dependent on price paid for recycled components. If the collection
point is located locally and has a high price for this type of recycling, then this component will not be
common in waste containers. Early in the morning, before the arrival of the collection truck, people
who live through collection and sale of disposed recyclable materials will remove essentially this
entire component from the container.
For this project, no matter what rubbish is disposed by the population, what is important is the
portion that is collected by the truck. For this reason, the analysis of morphological composition of
the waste for this project was based on the composition of the waste, which today goes to the
landfill. That is why, in this project the amount of recycled material in the total mass of waste is not
more than 15 percent.

Waste Composition for the Average Person

Various studies also show that
the glass plus plastic total
ranges from 25 to 45
percent. In principle, this is
real, but recovering this level
of materials requires that
removal from the recycling
containers be prohibited and
that seems unlikely.
Forest and agricultural wastes situation is much simpler. The actual amount of forest and
agricultural waste generated in the Ukraine is unknown. Companies underreport the amount of these
wastes for the very simple reason - they need to pay for their removal and disposal. To avoid this
cost, the waste simply burned in the field. However, there is fairly accurate reported data on the
amount of recycled wood and the amount donated or sold agricultural products. From this data,
experts in this field can easily calculate the actual amount of waste.
According to these studies the Cherkassy region annually produces over 360,000 tons of wood and
agricultural waste, and in four neighboring provinces bordering the Cherkassy region, more than 5
million tons per year are produced. The Kirovograd region alone produces at least 1.3 billion tons of

this waste and is within 50 kilometers of the facility. The facility for wood pellet and briquette
production has a maximum capacity of 50,000 tons per year. This represent 12% of the waste from
the Cherkassy region and 4% of the waste from the Kirovograd region. Today, these residues remain
unused and are therefore burned where they are generated.
Lime in sufficient quantity is now on sale in the Ukraine. However, its use for this project is a
challenge. Most producers are producing high quality lime for construction. This process does not
require high quality lime; rather low quality is sufficient and preferred. Naturally, the price on
construction, high-quality lime is three times higher than the low quality we require. We have
negotiated with some producers of lime, and agreed on their supplying low quality material. This
process will consume 8,000 of tons of lime per year. We do not anticipate difficulties contracting
with producers for this stable quantity of lime. In the worst case, the use of lime can be eliminated as
it improves the process, but is not a required element of the technology. This was noted in the section
on the technology.
6.1.2. Analysis of market ready products and services offered
 Services for removal and recycling of waste;

Finished products of the company and the services offered are:
 Delivery of recyclables: paper, plastic, glass, metal;

 Production of alternative fuels four types: biogas, fuel wood high and low quality, RDF;
 Service Supply of solid fuels;
 Supply of heat energy;
 Delivery of electrical energy.
Services for the removal and recycling of solid waste are now quite complex in the Ukraine. First,
a lot of companies perform this service today, including global leaders such as "Veolia" and
"Remondis". Secondly, according to Ukrainian legislation, companies have annual contracts for the
right to provide services for waste collection and recycling in each locality. Third, the tariff for
collection and disposal of waste is established by each local administration with a minimum rate of
return. Fourth, 40% of payments for these services are past due. In such circumstances, staying in
business is difficult. To do this we must have significant advantages over our competitors and have
an adequate supply of financial strength. In this project, such opportunities are provided.
Tariffs for the export of waste
ООО "Grinko-Sumy" OOO "A-Musson"

Firm USD/ 1 USD/ 1
USD/M3 person USD/M3 person
Service month month
Removal of solid domestic waste for the
4,55 0,6 4,65 0,61
inhabitants of apartment houses
Removal of solid domestic waste for the
4,50 0,6 4,40 0,61
residents of detached houses
Budgetary organizations 4,80 4,80
Other users 6,50 6,45
Market for recycled materials in Ukraine is well developed. However, it also has its difficulties.
Recycling collection points purchase it from the population at very low cost and without formal
registration. Their own costs are also minimal, which allows them to offer products on the market at
a low enough price. The highest prices paid for waste are in Kiev.
Price-list prices of population in the

harvesting of Kyiv reception centre's of Prices of secondary sorting plant in Kiev
secondary raw materials
Waste paper 0.2- 0.25 UAH/kg Waste paper MS-B 0,55 UAH/kg
PET-bottle (dark) 0.75 UAH/kg PET-bottle (dark) 1,4 UAH/kg
PET-bottle 1 UAH/kg PET-bottle (transparent) 2,2 UAH/kg
(transparent)
Caret and plastic rings 0.5 UAH/kg Stretch Film 1,2 UAH/kg
Glass bottle 0.05-0.2 UAH/mes. Scrap 670 UAH/t
Waste cans 4,5 UAH/kg
As of 20/10/2010.
In these circumstances it is expedient to export recyclables to the world markets, where prices are
higher. At this time the Chinese market consumes a huge amount recyclable material and delivery of
products is minimal due to the large flow of return empty containers.
Dynamics of imports and exports of secondary

Export of secondary PET from Ukraine
polymers, Ukraine 2002-2005.
Market alternative solid fuels worldwide has shown steady growth, including in the Ukraine.
The European market for alternative solid fuel to date is 10 million tons, of which 5-5.5 million
tons is imported. The European market for alternative solid fuel is growing by an average of 15
percent per year, to 1.5 million tons presently. The high growth of the pellet market in Europe is
driven by the requirements of the EU that at the end of 2010, the EU consumption of renewable
energy increase from 7% to 12% of the total. That led to the 2009 demand for biofuels in the EU to
grow by 30%. Almost every week a large plant with capacity of more than 2 tons of pellets per hour
begins operation. Nevertheless, the demand for pellets in Europe is ahead of production, partially due
to raw materials limitations. The main consumers in Europe are large power plants, providing
business district heating and residential populations.
In 2009, the average contracted price for the supply of pellet fuel from companies in Eastern Europe
(Poland, Lithuania, Latvia, Hungary) was 60 euro/ton, from companies in Western Europe
(Germany, Denmark, Sweden) it was 90 euro/ton. In Italy pellets were delivered in March 2009, for
an average of 75 euro/ton. Preferably, the delivery is carried out under the FCA. During 2010 small
price increases appeared, but overall the trend is price stability with increasing consumption.

At the same time, in European countries, the wholesale price of pellets is from 180 to 250 Euros per
tonne. Retail price ranges from 250 to 350 Euros per ton (first figure corresponds to the German
market, and the second - France). Problems with the implementation of quality pellets in Europe is
there. (THIS INFORMATION CONTRADICTS THE PARAGRAPHS ABOVE ON PRICE.
WHICH IS CORRECT???)
Ukrainian market of alternative solid fuels today is only beginning to develop, but it is expected to
develop very quickly. The economic crisis caused significant changes in the Ukrainian market for
alternative fuels. Over the past few years the market has grown from virtually nothing with economic
incentives for the production of bioethanol and biodiesel. At the same time, the increase in gas prices
has increased interest consumers to solid biofuels. By the end of the year, experts expect this segment
to more than double in size.
The potential of this market is huge. One ton of just Crushed biomass replaces the 500 m3 of natural
gas, with a current value in the Ukraine in excess of $250. Presently, the Ukraine consumes over 50
billion m3 natural gas, of which about 16 billion m3 consumed by households and public utilities for
heating. This is a huge market with a turnover of more than $10 billion USA. Even just 0.1% of this
market has a value of $10 million. In the case of the Ukrainian market for alternative fuel, the biggest
demand will be for very low-quality products such as wood chips.
There are two major constraining factors in the promotion of alternative fuels in the Ukrainian
market are: the need to install new equipment for the combustion of solid fuels and the lack of a large
supply base. Part of the legacy of the former USSR is that Ukraine got a very extensive system of gas
supply pipelines. Almost all cities in the Ukraine are well supplied with natural gas. Under the
conditions of very low natural gas prices during the last 30 years, all boilers which could be adapted
to the use of solid fuels were dismantled. Purchasing a new boiler today permitting the use of
alternative fuels is difficult for the majority of the population. Gas and electric boilers are much less
expensive than similar equipment consuming solid fuel. On the other hand, during the Soviet times in
each Ukrainian city there was a large supply of solid fuel, mostly coal. These supplies provided for
all the population and enterprises in the city, and in each apartment house were cellars for storage of
solid fuel. Today, almost all of these supply areas are eliminated.

Today purchasing an alternative fuel in Ukraine is easy enough, as all forestry companies sell wood
directly to AAC. However, the consumer would have to buy it directly and store on their property. It
is therefore available only to the population that lives in private homes. Residents of apartment
buildings and businesses are not able to do it. Heating standard five-story building requires a
minimum of 0.5 m3 of alternative fuel per hour, or 12 m3 per day, 360 m3 per month and for the
heating Season - 2160 m3 (The latter figure is comparable to the size of the house). A small business
will need a minimum of 2 m3 per day of alternative fuels. To solve these problems and to form their
own market for alternative energy projects in the Ukraine requires the supply and installation of an
inexpensive boiler, as well as the supply and storage of alternative fuel plants.
Market for thermal energy in Ukraine today is very promising. Today delivery of thermal energy
to the population and nearby businesses is performed by a municipal heating plant, which is mostly
on natural gas. However, last year the state covered at least 80 percent of the cost natural gas for the
population and 50 percent for utilities. This year, the Government of Ukraine agreed to gradually
raise the cost of gas prices and bringing them to market value. The first phase of the gas price
increase was implemented in August 2010, the second is planned to produce in April 2011. There are
still old tariffs for the supply of thermal energy, which ranged from 250 to 300 UAH per Gcal for the
population and from 350 to 600 UAH per Gcal for businesses. In the near future prices will be raised
in connection with rising gas prices.
This project envisages the construction of low-cost thermal generation plants and supplying them
with alternative fuel. In addition, it provides the delivery of excess heat energy via a pipeline that
will run to nearby homes.
The electricity market is also quite interesting, but only in terms of supply for industrial enterprises
or sale of electricity at the "green" rate. The tariff for electricity supply for industrial enterprises
today a little less than 0,1 USD per kWh, while "green" tariff is twice as high. The population
receives electricity at the rate of 0,03 USD per kWh by state subsidies. Demand for electricity has
been steady and is expected to stay so.
The biogas market is undeveloped in the Ukraine. This project includes a small biogas plant to
provide transport fuel for its internal use. This will significantly provide savings compared to the
purchase natural gas. Biogas will not be sold to the market.
6.2. Potential clients
6.2.1. Consumers for the removal and recycling of waste

Services for waste disposal will be provided to residents, all businesses, and organizations of the
village. Apartment dwellers pay for this service in their rent and owners contract with a waste
carrier. Businesses, organizations, and homeowners contract directly with a waste carrier. Data show
that each person creates between 250 to 380 kg MSW per year. However, this depends on the place
of residence. For example, in Kiev today the rate of waste accumulation is at a level of 388-768 kg
per year per inhabitant. If the first value refers to the residents of apartment buildings, the latter value
refers to the private sector with stove heating. The Ministry of Communal Services of Ukraine
developed rules for the generation of solid waste for each model object. These standards are used for
planning public utilities, the development of tariffs and contracts with all payers. In addition,
seasonal rates apply. For example, applicable year rate of accumulation of solid waste rules, k = 1,4
for hotels, resorts, boarding houses, holiday homes, manufactured goods and food stores, including
small businesses, and stores selling manufactured goods, restaurants, cafes, canteens, entertainment
establishments, consumer services, railway stations, airports effect annually from June 1 to October
1.

Savings rate
The unit of calculated at 1
№ Object
account unit per year,
M3.
1. the private sector with furnace heating man 1,9
2. the private sector with gas heating man 1,8
medical institutions:
3. - Hospital place 1,647
4. - Polyclinic visits 0,034
5. - the resort, hotel, holiday home place 1,800
6. - children's pre-school institutions place 0,526
educational institutions:
7. - higher and secondary specialized Apprentice 0,209
8. - school Apprentice 0,171
9. - boarding school Apprentice 0,938
10. - vocational Apprentice 0,857
Enterprise:
11. - grocery shop, trafficked small architectural forms 1 m2 shopping plazas 0,450
12. - food shop, trafficked small architectural forms 1 m2 shopping plazas 0,853
13. - clothing market 1 commercial place 1,194

14. - food market 1 commercial place 2,5
catering:
15. - Restaurant (no selection of food waste) Cutout 2,592
16. - coffee shop, dining room (without selecting food waste) Cutout 1,452
other objects
17. Hotel place 1,048
18. Hostel place 0,943
19. warehouse 1 sq. m. of area 0,108
20. administrative buildings and public businesses and organizations workplace 0,558
21. Entertainment agencies place 0,301

22. Enterprise Services workplace 1,663
23. railway station, airport, bus station M2 of passenger space 1,105
24. Camping, parking place
25. Beach (holiday season) M2 of area
26. Garage cooperative, garage place 0,34
27. summer co-op plot 1,86

These standards of waste and the rate on its export approved by the local council Deputies continue
to be a basis for concluding contracts for the export and waste disposal. According to Ukrainian
legislation, contracts for waste management are mandatory for all facilities and all forms of
ownership.
6.2.2. Consumers of Recycled Mataerials

Consumers of recycled materials are specialized processing plants for specific materials. This
company will sell products from the raw material to large wholesalers, who then tend to process and
export. The market for recycled materials in the Ukraine is quite extensive.
Potential consumers of recycled materials located in close proximity to the future of the plant
and purchasing are constantly in unlimited quantities.
Unit of
Type of Purchased Unit of
User Name Mark measure
measure
consumer raw materials USD
Wholesaler BROVARY-VTORMA Waste paper MC-5 т а 100
Waste paper МС-7 100
Waste paper МС-13 40
Plastic PE, PP, PA, 380
PS, PC white
PS, PC color
bright
PS, PC,
colored dark
Cullet transparent 32
Cullet Dark 25
Wholesaler Dneprovtorma, JSC Waste paper МС1-МС8 160
Wholesaler West, marshalling, Belarus Waste paper any 40
Wholesaler RAF-plus Waste paper МС5-МС7 60
Reprocessing LLC "August-Ukraine", Kyiv Waste paper МС1А 180
plant Waste paper МС2А 100
Waste paper МС3А 70
Waste paper МС13В 40
Reprocessing Obolon, Senna establishment PET bottle colourless 400
plant (branch), ZAO PET bottle Blue 350
PET bottle Green 300
PET bottle Brown 300
Wholesaler Tehnomet, There Scrap ferrous 250
and nonferrous
metals
Reprocessing Steklomir, OOO Cullet 70
plant
Wholesaler PE Andrjushchenko A.N. Cullet White 55
Cullet mixed 45
Wholesaler PC MAV Yuri scrap 250
Reprocessing TMK, LLC scrap 240
plant
Wholesaler PE Netrebčuk Andrey Alekseevich scrap 310

6.2.3. Potential consumers of alternative fuels
 Large power plants;

Potential consumers of alternative fuels are:
 Industrial enterprises in the manufacturing process that use thermal energy: cement plants,
 District and local boilers of small and medium-sized;

brick factories, glass factories, etc.;
 wholesalers and retailers;

 Individual consumers.
Large potential consumers of alternative fuels

Potential
Thermal demand for
Name Location Note
power alternative fuels,
tons/year
Cherkasy CHPP Cherkassy 230MW 1000000 At the moment
working on coal.
Technically can
operate on alternative
fuels.
Smelaènergopromtrans Smila 2,5 MW 10000 Currently being
translated into an
alternative fuel.
Equipment has been
purchased and
installed.
Smelakommunteploènergo Smila 40 MW 172000 Currently works on
gas.
Teplokommunenergo Monastyrische 90 MW 380000 Currently works on
gas.
Smila sugar plant Smila 2,5 MW 10000 Currently works on
gas.
WARM-UP Smila 10 MW 45000 Currently works on
gas.
Teplokommunenergo Cherkassy 180 MW 750000 Currently works on
gas.
The maximum distance from the plant to these consumers does not exceed 50 kilometers.
Large Ukrainian wholesalers who buy wood pellets and briquettes

Purchase
Name Location price Note
USD
Ukrainian Biofuel Market Beta Kiev 110 - 130 Purchases 50 000 tones/year
Beta export of Ukraine 110 - 130 Purchases 10 000 tons/year
Polinbud Odessa 100 - 120 Purchases of 5 000 tones/year
Private consumers in Ukraine

Ukrainian private customers can use firewood chips as an alternative fuel. This kind of bio-fuel is
much cheaper than wood pellets and briquettes. Recently, the market began to develop, but is still
 The relatively high price of boilers, which are now available on the market;
small. Three constraints exist here:
 The price of gas for the population remains quite low due to subsidies to the state;

 Relatively high price in the domestic market for pellets and briquettes due to the high demand
for these products in the European market.
Foreign consumers of alternative fuels
Large power plants and CHP
This market segment initiated the demand for biofuels and offers attractive conditions for producer
businesses. Energy companies have significant financial resources to invest in infrastructure projects
with long payback periods - such as the establishment of power plants, boilers to biomass, and
construction of new biofuel production. However, it should be noted that at present, this segment
focuses more on the consumption of pellets, which are associated with the convenience of automatic
delivery to the facility. Large consumers generally have looser quality requirements for biofuels. For
such customers the primary concern is the quantity, the monthly volume received by each user. Other
specifications of the biofuels in most cases for power engineering are of secondary importance.
Large consumers are ready and willing to work under direct contracts - directly from producers,
which in theory should ensure that they minimize the purchase prices. One problem is that, often, the
total potential volume of purchases for biofuel from one large consumer in this segment exceeds not
only the volume of production very large plant, but also the entire output of the biofuel industry. As a
result, such companies buy biofuels at the same time from several suppliers, which lead to complex
contractual relationships and logistics operations, as well as tough competition between buyers
Local Boiler small and medium power
Manufacturers of medium and small units are able to offer suppliers more attractive prices for
smaller and more realistic amounts of fuel. These consumers often purchase fuel through mediators
or agents. In some cases, medium and small-scale purchasers of biofuels deal directly with
producers. This case they may be of particular interest to producers, as the absence of middlemen
allows them to receive a higher price for their products. Simultaneously, direct delivery imposes on
the manufacturer's responsibilities and the additional risks with stringent penalties for violation of
contractual obligations.
Quality requirements in this segment are not very hard, because the burning is carried out in small
boilers equipped with unpretentious fuel supply system. These consumers are primarily interested in
the calorific value and moisture of the fuel, rather than their ash content, appearance and mechanical
strength.
Traders engaged in supplying industrial consumers
Traders of biofuels, are perhaps the most active agents representing the interests of industrial
customers. This is - as a rule, a company, or business with experience in various fuel markets as
professional traders. At the same time they are ready to work with relatively small volumes from
each supplier. They can accumulate biofuels produced in different places, and deliver it in bulk to
their customers. On the one hand it allows them to achieve savings on logistics and pay a higher
purchase price to producers. On the other hand, they thus have the opportunity to ensure their
customers an uninterrupted supply of fuel. Buyers in this category have another important advantage:
unlike the energy companies - they can be flexible enough to address business issues and offer their
suppliers more attractive purchasing conditions.
Quality requirements for these buyers are the same as that consumers themselves. In addition, traders
are most likely to accept biofuels in different packaging, at any convenient vendor delivery basis and
pay the goods received upon delivery or in advance.
Retailers
European companies engaged in retail trade of biofuels in Europe market products under their own
brands and through their own sales network - another category of buyers to help ensure high quality
biofuels. The attractiveness of such buyers in the fact that they tend to willing to pay quite a high
price. The flip side to this coin – they often have the highest quality requirements, including

sometimes the appearance of the biofuels. If the manufacturer is able to provide high and consistent
quality products, that segment may be the most attractive. If it is not likely to cooperate with such a
buyer, the relationship will not be long-term. The opportunity to earn additional income while
working with a retailer is to supply biofuels in retail packaging with the buyer’s label. Such
cooperation requires special attention to issues of logistics, but the price of quality biofuels can reach
180-200 euros per ton, providing manufacturers the high profitability and short-term return on
investment.
Agents
Most of the participants in information exchanges on the export market of biofuels are various
agents. Each producer receives regular requests from different companies and entrepreneurs for the
supply of biofuels in one country or another. Many agents represent the same customers and expect a
commission. In some cases, the activities of these agents contribute to the conclusion of successful
transactions between producers and actual buyers. Talking about the export market, one must speak
primarily about the requirements for the quality of the biofuel. This issue raises many questions
among new producers of biofuels, especially in those who initially focused on exporting products to
Europe.
To date, national standards for briquettes and pellets do not exist. Producers are guided by Western
standards, where the briquettes and pellets are standardized fuel, so for them there are specifications,
as we have GOST. In Europe, there is no common European standard for biofuels, and different
countries differ significantly from each other. Most European buyers and consumers of briquettes
and pellets are guided by several national quality standards - Swedish SS 18 71 21, German DIN
Plus, the Austrian standard O-Norm M 7135, Swiss SN 166000, as well as the new standard EN
+. Like most industry standards, these norms were developed on the basis of experienced European
producers of biofuels. Recently, more and more experts have expressed the view that the production
of biofuels should focus not only on standards but on the real customer requirements. Experience
with European consumers of biofuels shows that their declared use of a particular standard is more
guideline than a hard and final demand. Nevertheless, the quality of biofuels remains a critical issue
for producers and exporters, which is subject to further careful consideration and study.
Private consumers
Potentially, the consumer segment can provide a maximum profit, as the retail price of biofuels in
this segment can reach 250 Euros/ton. However, this segment operates similar to any other retail
market - with long, wholesale and retail distribution channels, high-margin brokers needing to invest
in advertising, branding and promotion in retail chains and etc.
Investors often underestimate the costs and complexities associated with selling to the consumer
market of biofuels in Western Europe. Even experienced entrepreneurs forget that the final retail
 costs and profits of all wholesale brokers providing transportation, accumulation and
price includes at least:
distribution of the parties, verification and quality assurance biofuels, the cost of commercial
 costs and profits of retailers, including marketing, branding, and possible delivery to
credit to retailers, etc.
 value-added tax, other taxes and charges in the country of implementation.

customers.
 the cost of retail packaging.

However, the supply of biofuels exclusively to the direct consumers is not a clear condition for the
success of biofuel production. In this market, are many intermediaries who often serve important
functions and provide more effective channels of distribution.

6.2.4. Consumers of heat and electricity

Potential consumers of heat and electrical power are the people and businesses in close proximity to
the plant. At this point in time, residential multifamily houses have a centralized heating
system. Some separate apartments may have shifted to individual gas or electric heating. However,
due to rising prices for gas and electricity, these people will be forced to either go back to installed
central heating or boilers utilizing alternative fuels. Thus, the domestic market of pellets and
briquettes is expected to quickly grow. Today, Ukraine has already had the first
company "Kiev Pellets," which offers services for the delivery of wood pellets and briquettes in
Kiev. Moreover, this company is expanding their services to other cities.
6.3. Competitor analysis
 As part of the removal and disposal of waste:

Competitors of the project are:
a. Large companies that provide services for the removal and recycling waste;
b. Two waste incineration plant in Kyiv and Dnepropetrovsk;
c. Private businesses that provide services for export and recycling;
d. Companies that are engaged in buying recycled materials from the population and of
 As part of the supply of alternative fuels:

course their suppliers.
a. Factories for the production of alternative fuels;
 As part of the supply of heat and electricity:

b. Wholesale buyers who work in the market for alternative fuels including foreign ones.
a. Large power plants;

b. Utility boilers of medium and low power.
As was noted earlier, the world's major companies operate in the Ukrainian market today (Veolia,
Remondis). Some Ukrainian companies (GreenCo, Kievspetstrans, Valadar Rose Ecology of Ukraine
and many others) also provide services for waste collection, transportation, and disposal in many
cities of the Ukraine. Almost all of them have their own sorting lines of various capacities. The most
powerful of them is the Kiev waste sorting plant GreenCo. Here up to 30% of the in-coming waste
can be recycled. These companies are actively deploying technology to separate the collected waste
and deal primarily with handling the recyclable materials. All these companies have a large fleet of
special equipment. In comparison with this project, this group of competitors has the following
drawbacks:
Firstly, for all these companies waste disposal is their main income source. Therefore, they cannot
operate collections at a loss.
Secondly, these companies do not maximize their recovery of recyclable waste.
Third, given the low pay rates and high number of past due accounts for waste collection in the
Ukraine and continually rising prices; these companies have to constantly try to renegotiate their
service contracts. They organize strikes and stop collection of waste from those who failed to make
timely payment. Naturally, similar actions lead to the rapid formation of piles of garbage on city
streets, which cause popular discontent. The local administration may not significantly increase fares
for waste removal to compensate for these low incomes due to a lack of funds in local budgets and
the unpopularity among the population of such actions. This action has little impact on the
administration, especially when it is done by private companies, who earn money from it.
Fourthly, almost all the waste, minus a small part of the sorted recycled, is disposed of in landfills,
which do not meet modern environmental requirements. This causes a negative attitude to these
companies by State environmental services, public and private environmentalists and, of course,
population.
This project does not have these drawbacks. For this project, waste collection is not a primary
income source. It does provide for transportation of raw materials to the site of processing and
production. All companies in other industries pay for delivery of raw materials and include these
costs in production costs. In this case, we will be paid for this collection and transportation of our
raw materials. This will provide some additional income to the enterprise. Of course, the project does
not provide a complete rejection of payment for the removal and disposal of waste. But if you have
to make concessions to local administration or provide customers with deferred payment, the
enterprise may agree to this with little pain. In addition, this project is environmentally friendly,
eliminating the negative attitude towards it from environmentalists and residents.
Waste incineration plants, which are now operating in Ukraine, pose no competitive threat. They
are too far away from this project, 200 and 350 kilometers respectively. Construction of new waste
incineration plants in Ukraine is unlikely to foreseeable future because of the high cost of this
technology and the negative attitude Ukraine's population to it.
Private carriers, which now provide removal services receive substantial tax benefits that allow
them to operate successfully at low tariffs. Some of them are working illegally and do not pay
taxes. Competition with them can be avoided by inviting them to deliver the waste to the plant with a
substantial discount or no payment for recyclable materials. This would be a benefit to them
compared to landfill disposal, where will have to pay for recycling.
Competing with the reception recycling centers is not a problem. Firstly, project provides a broad
introduction of separate waste collection. Waste will be placed into some special containers from
which the unauthorized removal will be hindered. Secondly, the plant can open their own collection
points and offer higher prices.
As part of the production and supply of alternative fuels this project has significant advantages over
competitors. The prime advantage is the presence of the company's own low-cost electricity and
thermal energy, which will be produced from gasification of waste. In the production cost Alternative
Fuel costs for electricity and heat of up to 40 interest or lead to a loss of 30 percent of high-quality
raw materials. In connection with these planned plant can put on the market for cheaper
products. Reduction energy consumption of traditional technology inevitably lead to lower quality
production and its calorific value, which will also reduce the possibility of competitors. C On the
other hand, this project aims to be an insignificant market share of alternative fuel, both domestic and
foreign market that does not lead to significant competition.
Thermal energy can not be transported over long distances. This is its great disadvantage, and at the
same time is an advantage. The advantage is that potential providers located outside the immediate
area are too distant to compete in this arena. Consequently, we propose locating close to potential
customers and capturing this market for the future. We need only provide good and low cost
energy. Since we have the cheapest fuel available, this should not be difficult.
Electrical energy produced by this project is negligible in comparison with total size of the
electricity market in the Ukraine and even this region in particular. Due to our small size, we do not
expect any serious competition. The existing Ukrainian electrical rates are sufficient to cover the
costs of production and provide a good profit.
6.4. Marketing Strategy

The marketing strategy is the foundation of marketing activities. The main objectives of the
marketing strategy are: to increase the volume of small sales (including increase in client flow or
increase in the number of orders), increase profits, increase market share, provide leadership in its
segment.
The project involves work in several independent segments, which at first glance may seem unrelated
to each other. It might seem that marketing for waste disposal services in the Ukraine, supply of

alternative fuels in Europe have nothing to do with the market supply of thermal energy in
Ukraine. However, if the strategy chosen in each segment is not coordinated with the others, it may
lead to the collapse of the entire project. Therefore, each market segment must offer its complete and
separate strategy, while all of them must work towards the same goal and the thus complement each
other.
Major, strategically important for this project is to supply the market alternative fuel in
Europe. As shown in the economic calculations, it is this market that brings the most revenue and
 This market already has a huge number of potential customers, who have become accustomed
profit to the project. This is especially true for the retail trade to satisfy individual consumption.
 This market has been steadily growing for the past 15 years, and consumption growth in this
to this product.
 For this market, many European governments have introduced some very tangible benefits
market far outstrips production.
 This market provides the highest prices for these products.

and economic incentives.
 For this market environmentalists always held promotions in support for this product.
Today, every European knows about alternative fuel wood, and about how important it is for
achieving environmental improvements. In this market segment the project foresees the use of
classical marketing strategy (moderate advertising, high quality, best price, stable supply, and
discounts for regular clients) in combination with additional non-traditional elements of a marketing
strategy. Wood pellets and briquettes are been a clearly promoted product throughout Europe, and
there are existing strict standards which uniquely characterize its quality. For this reason, this product
does not need a very aggressive and massive advertising. Countless companies supply a similar
product to the European market. Unique features for this product are virtually impossible. In these
circumstances, the buyer only looks at the best price and quality.
Additional factors influencing the choice of the buyer may include attractive packaging and ease of
transport. You can also use sensory effects, such as a nice wood smell, etc. Special attention should
be given to the provision of regular customers’ preferences in the form of discounts or an additional
package of services, but it is necessary that this product be always on sale. The second target group
for this market is wholesale buyers for large and medium-sized energy companies. This group is only
interested in optimal quality-price ratio, stability of supply, consistent quality and wholesale
discounts. Everything else for them is unimportant. In this market segment it is very important to
receive feedback from buyers and to react promptly to their wishes. This can be provided by holding
periodic customer surveys. If customers are asked their opinion about a product, asked for advice on
improving the quality of service and then actually implement these wishes (or pretend that
introduced), the client begins to see himself as a partner to the company.
As a result, the marketing strategy in this segment for the supply of alternative fuels to Europe
should be governed by the following formula: high quality + stable Delivery + reasonable price
+ visual appeal of the goods and packaging.
All other segments of the project are complementary and marketing strategy in other segments
should be subordinated to provide the maximum success in this strategic segment.
The main purpose of the market for waste disposal is to provide the plant with raw materials. Any
disruption to this can lead to an interruption of our products and thus the stability of the strategic
segment. Thus the marketing strategy in this segment should be subject to this goal of assuring a
constant supply of waste for processing. This can be achieved by applying a strategy of friendly
partnership with all clients. First we must bring a large population into the partnership. They must
receive adequate incentive to provide their waste for collection. This will reduce the cost of sorting
and recycling due to the volume of materials we handle.

The traditional economic stimulation of the population in these conditions is impossible. Even if the
population will completely separate their waste into the components - their total monthly income
would not exceed 50 hryvnia per person. This is a trivial sum, which the majority of the population
will ignore. Besides, among the Ukrainian population there is a strong perception that the company
collecting household waste earns huge profits. This perception must change. The population wants to
see the cleanliness in their yards and streets, and consistent charges for waste removal. To create a
positive attitude on the part of the population, we would arrange container sites, stable waste disposal
despite the delay in the payment of individuals, set containers for separate collection waste, and
periodically conduct lotteries for waste separation.
In this regard, the best bet is to target children and adolescents. Lottery winnings of 50 UAH would
be a significant prize. In turn, children will actively influence their parent to change perceptions and
actions. Parents will be inclined to follow their children in this area to avoid providing a bad example
to them. We can teach the children to separate waste collection and explain the advantages in
kindergartens and schools. On the other hand, encouraging the adult population can be achieved by
improvement of the areas adjacent to their homes and with positive reports in the local press
explaining the origin of money that are allocated for of these improvements.
The population should see the results of their labor. It is also necessary to establish partnerships and
mutually beneficial relationships with private carriers of waste and foster recycling points. The
absence of failures with the collection of waste will automatically lead to partnerships with local
government administrations. However, in these circumstances, we must be prepared for probable
monetary losses in this segment and for delays in payment for work performed. In this regard, the
internal strategy of the company should be directed to maximize the effectiveness and strict control
over expenditures in this area. For this purpose, the project foresees the use of special technical
controls based on the technology GPS. With this technology, management will have clear reporting
data on the movement of all vehicles, the actual costs incurred and all deviations from optimal
performance. These data will allow a quick response by management to changes and help avoid
unnecessary costs. Provision of these data to controlling government agencies will avoid most
conflict situations.
The last segment of the market with an independent marketing strategy is the supply of alternative
fuel, heat and electricity. This segment is on one side a "quick hit" project, and on the other hand,
the main the prospect for further development. This market is currently in the initial stage
development, but in the near future it is predicted to experience very strong growth. At this time, this
market is small with limited economic benefits. The bulk of the population of the Ukraine does not
have sufficient funds to purchase high quality products and services. Potential customers are buying
mainly cheap products without paying much attention to their quality. This feature allows companies
to market poor technology products, or gain income from using low-quality raw materials. when
unforeseen situations hit the European market they can ensure product sales in the domestic market
and thereby minimize their losses. This will ensure the stability of the project.
Given these characteristics and the fact that use of alternative fuels is in its infancy, the marketing
strategy in this segment should be based on providing the full range of services. Namely, the supply
to potential clients of boilers, designed for this type of fuel, on preferential terms through leases or
loans while simultaneously entering into a contract for the supply of fuel and service. This will allow
one to create your own permanent market and ensure a good profit under conditions of low prices.
It is also necessary to conduct an advertising campaign. For these purposes, it is best to utilize
network marketing. The population of the area is not huge and the people pretty well know each
other. This form of marketing in these conditions fits perfectly.

6.5. Pricing
According to Ukrainian legislation, the cost of services for household waste disposal, as well as
providing heat and electricity are determined by tariffs, which are approved by local state
administrations. These rates are calculated by the tariff department of the local Administration and
approved at a meeting. The Ministry of Public Utilities recommendations for the formation of these
tariffs state that the rate of return should not exceed 10% for residents and 20% for businesses and
institutions. Service providers can gain this business only by submitting proposals to potential
customers. This way, the customer can only agree with these fees or refuse the service. The current
tariffs cover costs, but profit is minimal. The exception to these rules is through direct contracts with
consumers of those services. Therefore, the marketing strategy in this market segment provides for a
direct customer partnership. In this case, the client should know exactly what he pays, what is the
real cost of these works to date, and that the service provider will make every effort to reduce this
cost further. Prices for alternative fuels are determined by the market. Recent data on the dynamics of
pellet pricing for the European market show their continued growth, but have seasonal
fluctuations.
6.6. Sales forecast

The project provides the following sales.
Services and Unit of Price, Incomes Income
Price, USD Sales
products measure UAH UAH. of USD
Waste removal Services M3 25,00 3,125 600000 15000000 1875000
Waste management M3 20,00 2,5 600000 12000000 1500000

services
Electricity KWh 1,36 0,17 17280000 23500800 2937600
Thermal energy GCal 200,00 25 62400 12480000 1560000
Waste paper tons 500,00 62,5 6000 3000000 375000
Glass tons 200,00 25 3000 600000 75000
Metal tons 1000,00 125 3000 3000000 375000
Plastic tons 2000,00 250 4500 9000000 1125000
Biogas tons 1000,00 125 0 0 0
RDF pellets tons 400,00 50 22600 9040000 1130000
Wood Pellets tons 1000,00 125 20000 20000000 2500000
The share of each product in the total income of the project.
Waste removal
Services
14%
Wood Pellets Waste management

19% services
11%
RDF pellets
8%
Biogas
0% Plastic
8%
Electricity
22%
Thermal energy
12%
Metal
3% Glass
0% Waste paper
3%
7. Operating plan
7.1. Implementation plan
 The first stage will be construction of the waste sorting line, a gasifying plant capacity of 25
Implementation of the project will be conducted in three stages:
tons per day and equipment for the production of pellets. Construction of the first stage
includes a small industrial building and engineering services.

 The second stage will add two gasifying installations with a capacity of 25 tons per day each,
and five boilers of 500 kW. The second stage of construction includes expansion of the
 The third stage will add two more gasifying installations with a capacity of 25 tons per day
production building, construction of warehouses, and an administrative building.
each, and five boilers of 500 kW. This third stage of construction includes expansion of the
 This division into stages and their timing allows from the minimization of losses and most
warehouse complex and landscaping.
rapid start of production.
The first phase of the project will call to start recycling only 7 months after project launch. In this
case, a gasifying installation allows us to satisfy all of the electrical and heat needs the complex. The
excess of solid fuel produced at the plant, will be sold at a competitive price (400 gr.). A boiler will
not be included at this stage. Briquetting equipment will produce two types of pellets: low-grade
from scarp and high-quality from clean wood. The first will be used for our own needs, and second
sold. This way, the use of low-quality pellets for wood drying can significantly reduce the cost of
producing the high-quality pellets. Building erection during the first phase is rather limited: only a
small industrial building to accommodate the sorting line. The basic design work for the entire
project will be completed this time. Administrative and construction needs will be housed in
temporary trailers.
The second phase of the project begins only after payment of the credit received for the first
phase. At the second stage, expansion of industrial housing is constructed to include a warehouse
building and administrative building. Gasifying and boiler installation will begin permitting us to
supply heat and electricity to the final consumers. The boilers will use only half of the pellets, with
the balance of the solid fuel also sold.
The third phase of the project begins only after payment of the credit received for the second
phase. In the third phase of construction is fully completed. The entire output from the additional
boilers will provide heat and electricity to final consumers. These will be completely fueled by the
output of the additional pellet production.
2010 2011 2012 2013 2014 2015

Phase Name
Quarter Quarter Quarter Quarter Quarter Quarter
3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
The project works
The first stage equipment
The first stage
Equipment installation and launching

the production of the first stage
Acquisition of release 2
Construction of second stage
Equipment installation and launching

the production of the second stage
Acquisition of equipment release
Building a release
Equipment installation and start of

production release

7.2. Operational plan in the area of waste management

7.3. Operational plan in the production of wood alternative fuels

8. Financial plan
Income statement projection (UAH)
Item 12.2010 2011 year 2012 year 2013 year 2014 year 2015 year
Sales revenues 56 268 831,78 93 955 708,75 102 755 064,95 126 033 888,02 152 205 127,71
Sales losses 2 152 794,65 2 462 797,08 2 817 439,86 3 223 151,20 3 687 284,98
Taxes on sales
Net sales 54 116 037,13 91 492 911,67 99 937 625,09 122 810 736,82 148 517 842,73
Raw materials and components 20 988 342,89 31 909 290,82 36 267 715,40 42 714 354,03 50 288 734,00
Direct labor costs 9 849 534,19 12 465 287,36 13 887 070,76 16 885 833,66 20 368 874,59
Cost of goods sold 30 837 877,09 44 374 578,17 50 154 786,16 59 600 187,69 70 657 608,59
Gross profit 23 278 160,04 47 118 333,50 49 782 838,93 63 210 549,13 77 860 234,14
Other taxes
Administrative expenses 107 639,73 123 139,85 140 871,99 161 157,56 184 364,25
Production expenses 1 076 397,33 1 231 398,54 1 408 719,93 1 611 575,60 1 843 642,49
Marketing expenses 107 639,73 123 139,85 140 871,99 161 157,56 184 364,25
Salary of administrative personnel 11 835,00 441 624,30 505 218,19 577 969,61 661 197,24 756 409,64
Salary of production personnel 424 638,75 485 786,72 555 740,01 635 766,58 727 316,96
Salary of marketing personnel 13 150,00 203 826,60 233 177,63 266 755,21 305 167,96 349 112,14
Total operating expenses 24 985,00 2 361 766,43 2 701 860,80 3 090 928,75 3 536 022,49 4 045 209,73
Depreciation 483 333,33 11 315 362,20 13 396 968,36 10 368 816,61 15 392 715,73 19 020 563,91
Interest expenses 5 055 261,29 3 163 807,05 2 387 912,11 3 807 515,94 6 857 486,22
Total non-operating expenses 483 333,33 16 370 623,50 16 560 775,41 12 756 728,73 19 200 231,67 25 878 050,12
Other revenues
Other expenses
Losses from prior periods 50 831,83 50 831,83 50 831,83 50 831,83 50 831,83
Profit before tax -508 318,33 4 545 770,11 27 855 697,29 33 935 181,45 40 474 294,97 47 936 974,29
Total expenses allocated to profit
Effect of operating with foreign currency
Taxable profit 4 518 397,99 27 804 865,46 33 884 349,62 40 423 463,13 47 886 142,46
Tax on profit
Net profit -508 318,33 4 545 770,11 27 855 697,29 33 935 181,45 40 474 294,97 47 936 974,29


Item 2016 year 2017 year 2018 year 2019 year 1-11.2020
Sales revenues 201 315 111,29 230 304 487,32 263 468 333,49 301 407 773,51 312 596 878,23
Sales losses 4 218 254,01 4 825 682,59 5 520 580,89 6 315 544,53 6 585 087,54
Taxes on sales
Net sales 197 096 857,28 225 478 804,72 257 947 752,60 295 092 228,98 306 011 790,69
Gross profit 109 632 472,65 125 419 548,71 143 479 963,72 164 141 078,50 170 154 707,21
Other taxes
Salary of administrative personnel 865 332,63 989 940,53 1 132 491,96 1 295 570,81 1 350 864,86
Salary of production personnel 832 050,60 951 865,89 1 088 934,58 1 245 741,16 1 298 908,52
Salary of marketing personnel 399 384,29 456 895,63 522 688,60 597 955,76 623 476,09
Total operating expenses 4 627 719,93 5 294 111,60 6 056 463,67 6 928 594,44 7 224 301,99
Depreciation 24 073 726,14 21 659 758,51 19 446 067,56 16 801 984,05 13 902 388,60
Interest expenses 4 613 948,30 103 669,52
Total non-operating expenses 28 687 674,44 21 763 428,03 19 446 067,56 16 801 984,05 13 902 388,60
Other revenues
Other expenses
Profit before tax 76 317 078,28 98 362 009,08 117 977 432,49 140 410 500,00 149 028 016,63
Taxable profit 76 266 246,44 98 311 177,25 117 926 600,65 140 359 668,17 148 981 420,78
Tax on profit
Net profit 76 317 078,28 98 362 009,08 117 977 432,49 140 410 500,00 149 028 016,63


Sales revenues 56 268 831,78 93 955 708,75 102 755 064,95 126 033 888,02 152 205 127,71
Sales losses 2 152 794,65 2 462 797,08 2 817 439,86 3 223 151,20 3 687 284,98
Taxes on sales
Net sales 54 116 037,13 91 492 911,67 99 937 625,09 122 810 736,82 148 517 842,73
Raw materials and 20 988 342,89 31 909 290,82 36 267 715,40 42 714 354,03 50 288 734,00
components
Gross profit 23 278 160,04 47 118 333,50 49 782 838,93 63 210 549,13 77 860 234,14
Other taxes
Salary of administrative 11 835,00 441 624,30 505 218,19 577 969,61 661 197,24 756 409,64
personnel
Salary of production 424 638,75 485 786,72 555 740,01 635 766,58 727 316,96
personnel
Salary of marketing 13 150,00 203 826,60 233 177,63 266 755,21 305 167,96 349 112,14
personnel
Total operating expenses 24 985,00 2 361 766,43 2 701 860,80 3 090 928,75 3 536 022,49 4 045 209,73
Depreciation 483 333,33 11 315 362,20 13 396 968,36 10 368 816,61 15 392 715,73 19 020 563,91
Interest expenses 5 055 261,29 3 163 807,05 2 387 912,11 3 807 515,94 6 857 486,22
Total non-operating expenses 483 333,33 16 370 623,50 16 560 775,41 12 756 728,73 19 200 231,67 25 878 050,12
Other revenues
Other expenses
Profit before tax -508 318,33 4 545 770,11 27 855 697,29 33 935 181,45 40 474 294,97 47 936 974,29
Total expenses allocated to
profit
Effect of operating with
foreign currency
Taxable profit 4 518 397,99 27 804 865,46 33 884 349,62 40 423 463,13 47 886 142,46
Tax on profit
Net profit -508 318,33 4 545 770,11 27 855 697,29 33 935 181,45 40 474 294,97 47 936 974,29


Sales revenues 201 315 111,29 230 304 487,32 263 468 333,49 301 407 773,51 312 596 878,23
Sales losses 4 218 254,01 4 825 682,59 5 520 580,89 6 315 544,53 6 585 087,54
Taxes on sales
Net sales 197 096 857,28 225 478 804,72 257 947 752,60 295 092 228,98 306 011 790,69
Gross profit 109 632 472,65 125 419 548,71 143 479 963,72 164 141 078,50 170 154 707,21
Other taxes
Salary of administrative personnel 865 332,63 989 940,53 1 132 491,96 1 295 570,81 1 350 864,86
Salary of production personnel 832 050,60 951 865,89 1 088 934,58 1 245 741,16 1 298 908,52
Salary of marketing personnel 399 384,29 456 895,63 522 688,60 597 955,76 623 476,09
Depreciation 24 073 726,14 21 659 758,51 19 446 067,56 16 801 984,05 13 902 388,60
Interest expenses 4 613 948,30 103 669,52
Total non-operating expenses 28 687 674,44 21 763 428,03 19 446 067,56 16 801 984,05 13 902 388,60
Other revenues
Other expenses
Profit before tax 76 317 078,28 98 362 009,08 117 977 432,49 140 410 500,00 149 028 016,63
Taxable profit 76 266 246,44 98 311 177,25 117 926 600,65 140 359 668,17 148 981 420,78
Tax on profit
Net profit 76 317 078,28 98 362 009,08 117 977 432,49 140 410 500,00 149 028 016,63

Cash flow (UAH)

Item 12.2010 2011 year 2012 year 2013 year 2014 year
Cash receipts from customers 64 939 244,55 109 791 494,00 119 925 150,11 147 372 884,18
Cash paid to suppliers 25 206 031,47 38 294 031,86 43 524 556,50 51 260 997,77
Direct labor paid 7 490 140,07 9 479 305,98 10 560 510,09 12 840 938,14
Total direct costs 32 696 171,54 47 773 337,84 54 085 066,58 64 101 935,91
General expenses paid 1 550 012,15 1 773 213,90 2 028 556,70 2 320 668,87
Salary paid 19 000,00 813 756,38 930 937,30 1 064 992,27 1 218 351,16
Total operating expenses 19 000,00 2 363 768,53 2 704 151,20 3 093 548,97 3 539 020,02
Short term funds
Interest receipts
Other inflows
Other outflows
Taxes paid 5 985,00 4 811 549,15 14 770 383,54 15 008 896,59 14 014 400,79
Net cash from operating activities -24 985,00 25 067 755,33 44 543 621,43 47 737 637,97 65 717 527,45
Purchase of property, plant and equipment 12 114 093,96 69 034 974,74 94 898 260,82
Other start-up expenses paid
Proceeds from sale of assets
Purchase of securities
Proceeds from sale of securities
Interest received
Net cash from investment activities -12 114 093,96 -69 034 974,74 -94 898 260,82
Proceeds from issue of share capital
Proceeds from debt 9 339 078,96 71 218 811,53 75 659 810,42
Repayment of debt 21 521 449,36 38 715 250,70 21 545 172,30 54 059 351,56
Interest paid 5 055 261,29 3 163 807,05 2 387 912,11 3 807 515,94
Lease payments
Dividends paid
Net cash from financing activities 9 339 078,96 44 642 100,88 -41 879 057,75 51 726 726,01 -57 866 867,50
Cash at beginning of period 3 000 000,00 200 000,00 874 881,47 3 539 445,15 8 105 548,31
Cash at end of period 200 000,00 874 881,47 3 539 445,15 8 105 548,31 15 956 208,26
Cash flow (UAH)
Item 2015 year 2016 year 2017 year 2018 year 2019 year
Cash receipts from customers 178 221 411,28 236 516 228,73 270 574 565,67 309 537 303,13 354 110 674,78
Cash paid to suppliers 60 350 797,02 73 332 762,10 83 892 679,84 95 973 225,74 109 793 370,25
Direct labor paid 15 489 638,47 20 044 003,31 22 930 339,79 26 232 308,72 30 009 761,17
Total direct costs 75 840 435,50 93 376 765,41 106 823 019,63 122 205 534,46 139 803 131,42
General expenses paid 2 654 845,18 3 037 142,89 3 474 491,47 3 974 818,24 4 547 192,06
Salary paid 1 393 793,72 1 594 500,02 1 824 108,02 2 086 779,58 2 387 275,83
Short term funds
Interest receipts
Other inflows
Other outflows
Taxes paid 16 665 581,72 27 787 214,11 37 970 687,80 43 438 466,84 49 693 606,07
Net cash from operating activities 81 666 755,15 110 720 606,30 120 482 258,75 137 831 704,01 157 679 469,39
Purchase of property, plant and equipment 145 890 531,01
Other start-up expenses paid
Proceeds from sale of assets
Purchase of securities
Proceeds from sale of securities 380 000,00
Interest received
Net cash from investment activities -145 890 531,01 380 000,00
Proceeds from issue of share capital
Proceeds from debt 123 309 386,87
Repayment of debt 38 807 084,64 86 670 853,94 18 207 925,28
Interest paid 6 857 486,22 4 613 948,30 103 669,52
Lease payments
Dividends paid
Net cash from financing activities 77 644 816,01 -91 284 802,24 -18 311 594,80
Cash at beginning of period 15 956 208,26 29 377 248,41 48 813 052,47 150 983 716,43 288 815 420,45
Cash at end of period 29 377 248,41 48 813 052,47 150 983 716,43 288 815 420,45 446 874 889,84

Balance sheet projection (UAH)

Cash 200 000,00 874 881,47 3 539 445,15 8 105 548,31 15 956 208,26 29 377 248,41
Account receivable
Inventories 16 683,33 19 085,73 21 834,08 24 978,19 28 575,05
Work in progress
Finished goods
Short term investments
Prepaid expenses (Short 4 418 908,87 3 209 350,43
term)
Total current assets 200 000,00 891 564,80 3 558 530,88 12 546 291,25 15 981 186,44 32 615 173,89
Fixed assets 37 000 000,00 115 330 684,31 115 330 684,31 178 762 348,33 178 762 348,33 311 980 965,25
Accumulated depreciation 14 583 333,33 25 898 695,54 39 295 663,89 24 664 480,51 40 057 196,24 59 077 760,14
Net fixed assets: 22 416 666,67 89 431 988,78 76 035 020,42 154 097 867,82 138 705 152,09 252 903 205,11
Land 4 000 000,00 4 000 000,00 4 000 000,00 4 000 000,00 4 000 000,00 4 000 000,00
Buildings 18 416 666,67 31 631 171,59 24 690 301,29 53 050 473,52 49 303 445,11 107 577 641,23
Plant and equipment 53 800 817,19 47 344 719,13 97 047 394,30 85 401 706,98 141 325 563,87
Prepaid expenses (Long
term)
Other assets
Investments in progress 12 614 093,96 50 000,00 50 000,00 20 000,00 20 000,00
Other long term investments 380 000,00 380 000,00 380 000,00 380 000,00 380 000,00 380 000,00
Leased property
TOTAL ASSETS 35 610 760,63 90 753 553,58 80 023 551,30 167 044 159,07 155 086 338,53 285 898 378,99
Accrued taxes 899 660,67 1 029 211,80 1 627 236,06
Short term loans 35 212 298,26 20 321 190,43 48 784 973,31 20 376 476,99 78 975 258,97
Accounts payable
Advances from customers
Total current liabilities 36 111 958,93 21 350 402,23 48 784 973,31 22 003 713,05 78 975 258,97
Long term debt 9 339 078,96 23 824 142,87 25 650 855,24 25 903 520,25
Ordinary shares issued 100 000,00 100 000,00 100 000,00 100 000,00 100 000,00 100 000,00
Preferred shares issued
Share premium account
Reserves
Revaluation reserve 26 680 000,00 26 680 000,00 26 680 000,00 26 680 000,00 26 680 000,00 26 680 000,00
Retained earnings -508 318,33 4 037 451,78 31 893 149,07 65 828 330,52 106 302 625,48 154 239 599,77
Total shareholders equity 26 271 681,67 30 817 451,78 58 673 149,07 92 608 330,52 133 082 625,48 181 019 599,77
TOTAL LIABILITIES 35 610 760,63 90 753 553,58 80 023 551,30 167 044 159,07 155 086 338,53 285 898 378,99

Balance sheet projection (UAH)

Cash 48 813 052,47 150 983 716,43 288 815 420,45 446 874 889,84 610 292 211,01
Account receivable
Inventories 32 689,85 37 397,19 42 782,39 48 943,05 55 366,65
Work in progress
Finished goods
Short term investments
Prepaid expenses (Short term)
Total current assets 48 845 742,33 151 021 113,62 288 858 202,83 446 923 832,89 610 347 577,65
Fixed assets 311 980 965,25 311 980 965,25 303 980 965,25 303 980 965,25 303 980 965,25
Accumulated depreciation 83 151 486,28 104 811 244,79 116 257 312,35 133 059 296,41 146 961 685,01
Net fixed assets: 228 829 478,97 207 169 720,46 187 723 652,90 170 921 668,84 157 019 280,25
Land 4 000 000,00 4 000 000,00 4 000 000,00 4 000 000,00 4 000 000,00
Buildings 100 462 982,76 93 727 203,79 87 414 238,23 82 169 383,94 77 638 516,79
Plant and equipment 124 366 496,21 109 442 516,66 96 309 414,66 84 752 284,90 75 380 763,46
Prepaid expenses (Long term)
Other assets
Investments in progress
Other long term investments 380 000,00 380 000,00 380 000,00
Leased property
TOTAL ASSETS 278 055 221,30 358 570 834,08 476 961 855,73 617 845 501,73 767 366 857,90
Accrued taxes 2 510 617,96 2 872 146,95 3 285 736,11 3 758 882,11 4 252 221,65
Short term loans 18 207 925,28
Accounts payable
Advances from customers
Total current liabilities 20 718 543,24 2 872 146,95 3 285 736,11 3 758 882,11 4 252 221,65
Long term debt
Ordinary shares issued 100 000,00 100 000,00 100 000,00 100 000,00 100 000,00
Preferred shares issued
Share premium account
Reserves
Revaluation reserve 26 680 000,00 26 680 000,00 26 680 000,00 26 680 000,00 26 680 000,00
Retained earnings 230 556 678,05 328 918 687,13 446 896 119,62 587 306 619,62 736 334 636,25
Total shareholders equity 257 336 678,05 355 698 687,13 473 676 119,62 614 086 619,62 763 114 636,25
TOTAL LIABILITIES 278 055 221,30 358 570 834,08 476 961 855,73 617 845 501,73 767 366 857,90

Financial ratios projection

Current ratio (CR), % 16,96 6,38 30,27 31,70 44,94

Acid test ratio (QR), % 16,91 6,33 30,18 31,64 44,89
Net working capital (NWC), UAH 200 000,00 -30 844 476,65 -31 825 571,10 -15 649 657,21 -26 987 876,82 -32 271 866,35
Net working capital (NWC), USD 25 000,00 -3 650 325,46 -3 452 115,39 -1 508 081,33 -2 434 593,94 -2 585 599,13
Stock turnover (ST) 1 964,51 2 471,03 2 441,35 2 535,95 2 628,00
Average collection period (CP)
Creditor/purchases ratio (CPR)
Net working capital turnover -1,75 -2,87 -6,39 -4,55 -4,60
(NCT)
Fixed assets turnover (FAT) 0,63 1,11 0,99 0,84 0,67
Total assets turnover (TAT) 0,59 1,08 0,93 0,77 0,60
Total debt to total assets (TD/TA), 26,23 73,06 46,78 27,77 30,04 34,64
%
L-term debt to total assets 26,23 32,78 6,64 6,87 5,12 10,93
(LTD/TA), %
L-term debt to fixed assets 26,37 35,18 6,82 7,33 5,56 12,24
(LTD/FA), %
Total debt to equity (TD/EQ), % 35,55 271,21 87,90 38,45 42,95 53,01
Times interest earned (TIE), times 1,90 9,80 15,21 11,63 7,99
Gross profit margin (GPM), % 43,02 51,50 49,81 51,47 52,42
Operating profit margin (OPM), % 8,40 30,45 33,96 32,96 32,28
Net profit margin (NPM), % 8,40 30,45 33,96 32,96 32,28
Return on current assets (RCA), -3 049,91 72,18 1 283,29 499,46 323,15 181,99
%
Return on fixed assets (RFA), % -17,23 5,29 33,75 33,75 27,72 21,71
Return on investment (ROI), % -17,13 4,93 32,89 31,61 25,53 19,39
Return on shareholders' equity -23,22 18,30 61,79 43,76 36,49 29,67
(ROE), %
Earning per ordinary share -5 083,18 3 788,14 23 213,08 28 279,32 33 728,58 39 947,48
(EPOS), UAH
Earning per ordinary share -635,40 413,16 2 498,98 2 779,19 2 983,73 3 256,37
(EPOS), USD
Dividends per ordinary share
(DPOS), UAH
Dividends per ordinary share
(DPOS), USD
Ordinary dividends coverage
(ODC), раз
Total assets per ordinary share 356 107,61 921 987,58 847 018,31 1 073 553,42 1 585 466,65 2 471 820,46
(TAOS), UAH
Total assets per ordinary share 44 513,45 109 007,13 91 533,80 104 504,53 141 533,76 199 413,82
(TAOS), USD
Price to earnings (P/E), times -51,68 264,44 19,26 27,91 35,42 43,22

Financial ratios projection

Current ratio (CR), % 70,08 2 643,48 7 703,46 11 198,05 14 211,25

Acid test ratio (QR), % 70,03 2 642,51 7 702,07 11 196,67 14 209,86
Net working capital (NWC), UAH -16 796 745,81 91 999 051,16 221 333 688,65 369 580 788,66 531 301 558,21
Net working capital (NWC), USD -1 288 178,11 6 104 867,79 13 423 397,55 20 407 335,78 26 804 939,11
Stock turnover (ST) 2 843,62 2 843,62 2 843,62 2 843,62 2 829,40
Average collection period (CP)
Creditor/purchases ratio (CPR)
Net working capital turnover (NCT) -11,73 2,45 1,17 0,80 0,63
Fixed assets turnover (FAT) 0,82 1,04 1,31 1,65 2,05
Total assets turnover (TAT) 0,71 0,72 0,61 0,54 0,48
Total debt to total assets (TD/TA), % 21,02 1,16 0,69 0,60 0,54
L-term debt to total assets (LTD/TA), % 0,93 0,00 0,00 0,00 0,00
L-term debt to fixed assets (LTD/FA), % 1,08 0,00 0,00 0,00 0,00
Total debt to equity (TD/EQ), % 26,62 1,17 0,70 0,61 0,54
Times interest earned (TIE), times 17,54 949,80
Gross profit margin (GPM), % 55,62 55,62 55,62 55,62 55,60
Operating profit margin (OPM), % 38,72 43,62 45,74 47,58 48,70
Net profit margin (NPM), % 38,72 43,62 45,74 47,58 48,70
Return on current assets (RCA), % 193,94 102,87 52,61 37,65 30,38
Return on fixed assets (RFA), % 31,79 45,27 59,94 78,63 99,60
Return on investment (ROI), % 27,32 31,44 28,02 25,46 23,28
Return on shareholders' equity (ROE), % 34,59 31,80 28,21 25,62 23,41
Earning per ordinary share (EPOS), UAH 63 597,57 81 968,34 98 314,53 117 008,75 135 480,02
Earning per ordinary share (EPOS), USD 4 679,62 5 487,73 5 984,41 6 475,47 6 846,73
Dividends per ordinary share (DPOS), UAH
Dividends per ordinary share (DPOS), USD
Ordinary dividends coverage (ODC), раз
Total assets per ordinary share (TAOS), UAH 2 793 826,95 3 129 049,82 4 210 630,66 5 514 794,26 6 982 932,24
Total assets per ordinary share (TAOS), USD 206 044,53 209 274,31 256 041,04 304 918,83 352 532,00
Price to earnings (P/E), times 34,91 37,90 42,72 47,04 51,47
Discounted cash flow criteria

Criteria Grivna US Dollar
Discount rate, % 12,00 8,00

Pay back period - PB, mths. 71 74
Discounted payback period - DPB, mths. 75 79
Average rate of return - ARR, % 31,94 22,18
Net present value - NPV 224 074 785 15 762 408
Profitability index - PI 2,08 1,69
Internal rate of return - IRR, % 41,68 28,80
Modified rate of return - MIRR, % 20,38 13,75
Cash flow criteria calculation period - 120 mths.

"Veles-Vauche"
Millions of UAH
100000
150000
200000
250000
50000
-150
-100
100
150
-50

50
0
0
2010 2010
2010 2010
2010 2010
2011 2011
Repayment schedule (NPV) in the base currency

2011 2011
2011 2011
2012 2012
2012 2012
2012 2012
2013 2013
break-even point
2013 2013
2013 2013
2014 2014
2014 2014
2014 2014
2015 2015
2015 2015
2015 2015
2016
2016
2016
2016
2016
2016
2017
2017
2017
2017
2017
2017
2018
2018
2018
2018
2018
2018
2019
2019
2019
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2019 2019
2019 2020
2020 2020
2020 2020
2020
"Veles-Vauche"
10000000
15000000
20000000
25000000
10000000
12000000
-4000000
-2000000
5000000
2000000
4000000
6000000
8000000

0
0
01.2010 01.2010
05.2010 05.2010
09.2010 09.2010
Thermal energy
RDF
01.2011 01.2011
05.2011
Payments on the loan repayment

05.2011
09.2011 09.2011
01.2012 01.2012
05.2012 05.2012
Return of borrowed funds

09.2012 09.2012
01.2013 01.2013
05.2013 05.2013
Expected Profit
Electric power
Wood pellets
09.2013 09.2013
01.2014 01.2014
05.2014 05.2014
09.2014 09.2014
01.2015 01.2015
05.2015 05.2015
Payment of interest on the loan

09.2015 09.2015
01.2016 01.2016
Waste Disposal
Plastic
05.2016 05.2016
09.2016 09.2016
01.2017 01.2017
05.2017 05.2017
09.2017 09.2017
01.2018 01.2018
05.2018 05.2018
09.2018 09.2018
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01.2019
Recycling
Wastepaper
01.2019
05.2019 05.2019
09.2019 09.2019
01.2020 01.2020
05.2020 05.2020
09.2020 09.2020
9. Conclusions
This project will solve three problems at once. First, the project allows us to address the problem of
solid waste disposal and almost completely eliminate all negative effects of the decomposition of
waste on the environment in the area. The residue, after gasifying installation will not exceed 10 - 15
percent of the incoming mass of waste and as a result of the high-temperature heat treatment will be
completely inert. This balance can be used for remediation of existing landfills. Second, the project
allows electrical energy using gasification technology on the combustible fraction of municipal solid
us to address the energy problem in this region of Ukraine by providing heat and waste, as well as
through the production of environmentally friendly wood fuel. Finally, the proposed project is
economically efficient and socially very significant for Ukraine.

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Business plan to build a plant for the production of alternative fuels.

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6.3. Competitor analysis......................................................................................................................................... 37

Author and Technical Project Manager: Oleksandr Novykh, Ph.D

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Solution and Technology

 complex for production of wood pellets.

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The need for investment

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6000000 Interest payments on loans

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A general description of the company

 Bondarenko Yuri, Ph.D., an expert in toxicology and pollution environment.

 Company "Promtehnologiya", which is engaged in designing such plants.

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3. The proposed technology

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 complex for production of wood pellets.

4.2. Sorting complex

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4.3. The biogas plant

4.4. Accelerated composting of mixed waste

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As a result at the end, we have a fuel with calorific content of at least 12 -

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4.5. Gasifying unit

4.6. Boiler plant for solid fuels.

NEED SOME TEXT TO DESCRIBE THIS PORTION OF THE

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4.7. Complex briquetting wood and agricultural waste

 silo of raw materials;

 Drum drier with hot air generators;

Briquetting process is forcing raw material

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4.8. The overall layout of the plant

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4.9. Architectural Rendition

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5. Characteristics of products and services

 Removal and disposal of solid waste and industrial waste;

 Waste sorting and separation of recyclable materials;

5.1. Services for household waste disposal

 15,000 tons of waste paper;

 3,000 tons of metal;

5.4. Alternative fuel

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5.5. Delivery of heat and electricity

5.6. Prices of manufactured products and services

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6.1. Market analysis of raw materials and finished products

6.1.1. Market analysis of raw materials

 solid household and industrial waste;

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Waste Composition for the Average Person

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6.1.2. Analysis of market ready products and services offered