|
Dear visitor and international investor,
We
warmly welcome you, if this is
your first visit to Africabiz
Online - The ultimate newsletter
on trading and investing in 49
sub-Saharan African countries.
If you are a regular and faithful
reader, welcome back.
If you are a regular and faithful reader, welcome back.
Crude oil price being - since March 1999 - fluctuating between
US $ 20 - US $ 30, sub-Saharan African countries, particularly
those deprived from oil resources and mostly the landlocked ones,
are burdened with huge importation bills of Crude Oil or Gasoline.
They are allocating a too large portion of their meager financial
resources to catering for their vital needs for energy.
This is a very bad situation as financial means burnt into
gasoline are not available for investment into other profit
making sectors capable of boosting the economic development :
Agriculture, Industry and Services as here
exposed.
In order to contribute to finding adequate solutions : a-
providing the necessary energy to powering the economy; and b-
to efficiently use that energy to increasing the economic growth
rate beyond the double-digit growth range - the prerequisite
for a take off of the economy as here
extensively exposed - we are introducing you, in this delivery,
to "Ethanol As Bio-fuel And Foreign Exchange Saving Economic
Activity" below
exposed in the Business Opportunities in Africa' section.
This delivery about Ethanol as bio-fuel stands as a first ingress
into the energy dilemma facing African countries in their quest
for a better standard of living. The energy problem shall be
addressed in the near future more thoroughly with a review of
alternatives to classic means of generating power for the economic
development in Africa.
HAPPY AND SUCCESSFUL BUSINESS YEAR 2002
We at AFRICABIZ ONLINE wish you and your loves ones a very
festive Yule 2001-period; a happy and prosperous business year
2002.
Click here to review Contributor's
Guidelines. Your contribution / economic articles /
technology breakthroughs on "How Africa could bridge the
developing gap" are welcome.
Many thanks for
dropping by and see you here on January 15, 2002.
Dr. B.M.
Quenum
Editor
of AFRICABIZ
|
|
SORGHUM: AN INCOME BUILDING POWER FOR AN AFRICAN COMMUNITY.
PART III: ETHANOL/ALCOHOL PRODUCTION AS BIO-FUEL/RENEWABLE
ENERGY AND ALTERNATIVE TO GASOLINE
-
Several business opportunities - component parts of the Integrated Developing Scheme described in Africans, Stop Being Poor! are listed in following table.
a-
SHEA BUTTER (Issues 5,
6,
7,
11,
12,
13)
b- BLUE GOLD (Issues 14,
15,
16,
17,
18,
19)
c- FREEZE-DRIED PAPAIN (Issues 20,
21,
22
and here)
d- KENAF (Issues 23,
24)
e- VEGETABLE OIL (Issues 25,
26,
27
and 28)
f- CEREALS (Issues 30,
31)
|
In delivery N° 30
an introduction to Sorghum - a "Life saver" according
to a Chinese saying - was exposed; and we stated - due to the
several interesting industrial transformations / possibilities
offered by sorghum - that "Any African country which is
really serious about boosting up its economy should consider diversification
into Sorghum development".
In
issue N° 31
a pilot plant to producing sorghum beer was considered.
As shown on the graph here
available one can see that Alcohol / Ethanol is the
resulting product if Sorghum Beer fermentation is carried
out to finish.
To our knowledge, apart from South Africa, Click
here for countries briefs, there is no Ethanol production
plant established in any other sub-Saharan African country.
Adon
on November 23, 2002: We received
on October 25, 2002 a feedback from Mr.
Francis X. Johnson of the Stockholm Environment
Institute, who points out that:
Malawi
had been continuously producing ethanol and blending
it with gasoline since 1982. Zimbabwe
began producing and blending in 1980, although that
distillery has since shifted over to "potable"
ethanol for export rather than blending. We thank
Mr. Johnson for his contribution.
It is important also mentioning that Equatorial
Guinea commissioned end of 2001, at Bioko,
an
LPG/Methanol plant, which processes gas
piped ashore from the Alba field. The plant
is designed to produce 19,000 barrels of methanol
for export to Europe, USA and Far East.
|
That is really an aberration when one knows that:
1-
There is a huge market in sub-Saharan African countries
for Ethanol which is actually imported from overseas for
hospitals and clinics operational needs; and for industrial
maintenance purposes.
2- Ethanol is also a versatile product necessary for the
establishment of a powerful chemical industry. It is
used to producing a long list of industrial chemical products
and by-products. It is a highly performing solvent for agro
industries preparations. In short, one can say that if
there is no ethanol supply, the establishment of a diversified
chemical industry is not possible.
3- Ethanol is an excellent bio-fuel to powering motor
engine either as a- pure product (Early Ford T models'
motor engines were designed to run on pure ethanol) or b-
as an additive to gasoline with a blending level up to 85
% content of ethanol (more
than 4 million vehicles in Brazil are running such
a mixture)
|
ETHANOL
PRODUCTION AS FOREIGN EXCHANGE SAVING ECONOMIC ACTIVITY FOR OIL
DEPRIVED COUNTRIES
Let's consider point 3 above listed: Ethanol as bio-fuel blended
with gasoline and evaluate the resulting saving for African
countries.
-
1- Historically, production of ethanol was limited to using
sources of sugar that were available in soluble forms, such as
sugar (sucrose), molasses from sugar cane, or fructose from the
corn plant.
Nowadays, new technologies allow for the production of ethanol
from agricultural residues (straws, corn stalks and cobs, bagasse,
cotton gin trash, palm oil wastes, etc.), crops grown specifically
for their biomass (grasses, sweet sorghum,
fast growing trees, Kenaf,
etc.), paper (recycled newspaper, paper mill sludge's, sorted
municipal solid waste, etc.), wood wastes (prunings, wood chips,
sawdust, etc.), and green wastes (leaves, grass clippings, vegetable
and fruit wastes, etc.).
These new production methods/development are very significant:
for example, where one acre of sugarcane produces about ten tons
of edible sugar and three tons of molasses, it also produces
(in the form of leaves and stalks) an additional twenty to twenty-five
tons of non-edible materials which were left over in field after
the harvest of the stalks. With the new technologies these byproducts
could be easily and efficiently transformed into ethanol.
Table N° 1 below lists some feedstocks - which could be
used to producing ethanol - and their relative production costs
(Source available here)
| TABLE
1 |
| ETHANOL
FEEDSTOCKS AND PRODUCTION COSTS US$ |
|
BIOMASS
MATERIAL
|
$
/ liter for feedstock cost alone (high end of range)
|
$
/ liter for feedstock cost alone (low end of range)
|
$
/ liter processing cost (high end of range)
|
$
/ liter processing cost (low end of range)
|
Total
$ per liter(high end of range)
|
Total
$ per liter(low end of range)
|
| Bagasse |
0.22
|
0.11
|
0.44
|
0.25
|
0.66
|
0.36
|
| Molasses |
0.13
|
0.13
|
0.27
|
0.14
|
0.39
|
0.27
|
| Prepared
cane |
....0.29
|
0.16
|
0.44
|
0.25
|
0.73
|
0.40
|
| Leafy
tops and cane trash |
0.14
|
0.17
|
0.44
|
0.25
|
0.37
|
0.32
|
| Unburned
sugarcane |
0.27
|
0.14
|
0.44
|
0.25
|
0.70
|
0.39
|
| Sugarcane
varieties |
0.25
|
0.13
|
0.44
|
0.25
|
0.68
|
0.38
|
| Napier
Grass |
0.38
|
0.20
|
0.44
|
0.25
|
0.82
|
0.46
|
| Sweet
Sorghum |
0.22
|
0.11
|
0.44
|
0.25
|
0.66
|
0.37
|
| Eucalyptus |
0.36
|
0.20
|
0.44
|
0.25
|
0.80
|
0.44
|
| Leucaena |
0.53
|
0.28
|
0.44
|
0.25
|
0.96
|
0.54
|
| Recycled
Newspaper |
0.04
|
0.01
|
0.44
|
0.25
|
0.47
|
0.27
|
| Municipal
Solid Waste |
0.10
|
0.00
|
0.44
|
0.25
|
0.55
|
0.25
|
Let's take the average feedstock plus production cost which
costs less: US $ 0.40.
Now that we have an estimate of feedstock and production cost,
we may apply 30% (the standard in the industry) above it for profit
margin and distribution costs (packaging, tanking and so on) which
gives us a distribution pricing in the range of US $: (0.40 x
30%) + 0.40 = 0.52 per liter of Ethanol; and a selling price in
the range of US $ 0.624 per liter. To be compared to actual
gasoline selling prices in African countries. Click
here for a brief study dedicated to a landlocked country:
Burkina-Faso
-
2 - In short Crude oil prices remained above US $ 25 per barrel
in nominal terms for most of 2000 and have been near US $ 30 per
barrel in the early months of 2001. And in this December 2001,
it is fluctuating between US $ 20 and US $ 25.
Prices were influenced by the disciplined adherence to announced
cutbacks in production by members of the Organization of Petroleum
Exporting Countries (OPEC). OPEC's successful market management
strategy was an attempt to avoid a repeat of the ultra-low oil
price environment of 1998 and early 1999.
So one could reasonably assume that OPEC's members and non members
are going to stick to the successful
market regulating strategy; and therefore the price of Crude Oil
will remain near to US $ 25 per barrel (159 liters) for many years
running.
-
3 - According to The World Oil Markets/International
Energy Outlook 2001 Report - available here
- Oil demand in Africa is projected to grow at an average annual
rate of 3.6 percent, from 2.5 million barrels per day in 1999
to 5.4 million barrels per day in 2020. And considering the
price evolution above outlined in point 2 the demand will continue
to exerting heavy drain / burden on national budgets of most
sub-Saharan African countries.
-
4 - Multiply quantities
exposed in point 3, first by 365 days; and, second, by US $ 25
to see how much burden is exercised on the meager financial resources
of most African countries.
A very big chunk of their national budget is simply "burnt
away" through the importation of crude oil; and therefore
not enough financial resources are left over to contributing to
the necessary increase of the economic growth rate as here
extensively exposed.
When one takes into account points made above 1-2-3-4 it is obvious
that the development of an Ethanol / bio-fuel industry will be
a real bonus for any African country. The staggering figures
of bills linked to Crude Oil importation could be minimized if
Ethanol / Bio-fuel is blended with gasoline from 10 / 90 ratio-mixture
to 85 / 15 as already performed in Brazil. Click
here for a brief study dedicated to a landlocked country:
Burkina-Faso
In
addition to foreign exchange savings, the following non-comprehensive
benefits could be listed for the sustained economic development
of any sub-Saharan African country which setup this ethanol /
bio-fuel venture as viable alternative to fossil based fuel:
-
Development and use of locally-produced, renewable fuel,
and reduction of demand for imported petroleum.
- Boosting of local agriculture productions and additional
markets and revenues to farmers; leading consequently to
the increase of rural folks purchasing power as here
extensively exposed.
- Beneficial environmental impact through the usage
of organic municipal solid waste materials to generating
a higher value end-product.
- Low level of carbon dioxide emitted by motor engines and
then preservation of the quality of the atmosphere. Etc.
|
In
next delivery (Issue 33 - January 15 - February 14, 2002)
we shall pursue this series on Ethanol / bio-fuel and consider:
a) The most suitable feedstock. b) The energy balance
of Ethanol and c) Economic indications for a small scale
plant to producing Ethanol.
- Interested parties - private African and international investors /
companies, government
agencies,
international development
agencies - to make contact through the Free Access Support Console available at this link
Contact through the support console will get quickest reply from Africabiz Online's staff, than contact by emails. Click here for contact information. Be advised that first contact should be through the support console to be followed by phone calls. If you are a VIP-Member, use VIP-Members Support Console available here.
Before you consult please click
here to review this clarification
|
