 |
 Rising Ventures September - October 2007 |
 |
|
| Rising Ventures
Beijing Shengchang Bioenergy Co.
PDF Version
 China’s pledge to double its reliance on renewable energy by 2020 has brought a great deal of attention to this key growth sector. Witnessing renewable energy’s potential profitability, Fu Youhong, an experienced entrepreneur with several successful pharmaceutical enterprises, decided to explore opportunities in the bioenergy technology sector. Youhong saw his chance for entry into this lucrative market when new renewable energy growth policies came into effect in 2006, and he soon thereafter formed the Beijing Shengchang Bioenergy company.
Shengchang Bioenergy’s biomass product is composed of pellets made of wood and straw, producing much lower carbon, sulfur, and nitrogen emissions than oil and coal. In addition, biomass energy is more affordable than clean alternatives such as natural gas, which is usually two to three times as expensive. Shengchang Bioenergy’s product is thus beneficial for the BoP, not only because of its clear cost savings but also because of the company’s unique production process whereby biomass pellets are produced from crop waste sold to Shengchang by local farmers.
These competitive advantages have led to Shengchang Bioenergy’s emergence as a leader in the Chinese bioenergy sector. It is the only bioenergy company to operate in every part of the biomass process, and in terms of production scale, one Shengchang biomass processing plant can produce a substantial four tons of pellets per hour. Currently, the company is driving sales of two main products: a biomass stove targeted towards rural populations, and the biomass industrial boiler, which is tailored for urban consumers. Looking forward, Shengchang Bioenergy plans to develop thermoelectricity generators in order to supply power sources with biomass – these generators are designed to output 12MW of energy per 100,000 tons of biomass. They may also engage in bio-diesel oil and bio-ethanol projects.
Shengchang Bioenergy is seeking investment of USD$5 million for early 2008. Fu Youhong plans to construct several thermoelectricity generators and create more biomass material processing factories similar to the current Beijing model in order to spread his operations throughout China. By 2010, the company will be seeking an additional round of investment to fund international growth strategies. Shengchang Bioenergy’s primary target markets will be Europe, where many potential clients have already expressed interest in the product design, and Japan and Korea, where scarce domestic energy supplies have left consumers seeking alternative international sources. Beyond these goals, Fu Youhong plans to have his company publicly traded within four years. In the meantime, he is utilizing his company’s strengths to maintain Shengchang Bioenergy’s status as a leader in the Chinese market.
For more information on Beijing Shengchang Bioenergy, see the extended company profile or visit www.bj-sbst.com.
Liangdu MinYiYuan Trade Co. Ltd.
PDF Version
China’s emergence as an economic powerhouse is not exactly news, but millions of Chinese in the countryside still face the challenge of rural poverty. Much of China’s rural population is migrating to the cities in order to earn better income as low-skilled laborers, but many (especially women and children) are often left behind in the countryside with little means to earn sustainable income. Against this backdrop, Cai Tingfen saw an opportunity for sustainable growth and poverty alleviation in the handicraft skills of the minority-ethnic population of Liupanshui City (Guizhou Province). In December of 2005, Cai founded Minyiyuan Ltd as a handicraft enterprise that would integrate minority communities in low-income regions into the economy while preserving their folk culture.
Minyiyuan’s de-centralized “company + base + peasant households” production strategy sets them apart from other handicraft companies. First, the company purchases raw and supplementary materials from nearby villages as per product design requirements established by the base. Next, local laborers conduct non-workshop production from their own homes by manually crafting their art in the traditional folk way. Finally, the finished goods are purchased back from these producers by the company. This environmentally-friendly strategy induces locals to generate raw materials by planting economic crops for handicraft-making such as cotton, hemp, and Chinese herbs, discouraging forms of income that involve excessive deforestation. In addition, non-workshop production does not rely heavily on energy sources such as water or electricity, and creates goods that integrate traditional folk techniques with market-driven production models.
In 2006, Minyiyuan’s Folk Art Center reached a productive capacity of 60,000 batik (wax-printing) works per year, 8,000 embroideries per year, and 20,000 sets of ethnic handicrafts per year; realizing a sales income of 1.13 million yuan. The primary sales and exhibition locations for these works are in two regions around Liupanshui of Guizhou province and Zhongshan of Guangdong province. The Folk Art Center is currently focusing on marketing strategies and research and development of new products with its team of cultural, finance, and marketing experts. The company is currently seeking an 8 million yuan investment to construct a research and development base that would transform the company into a conglomerate – integrating product design, manufacturing, packaging and sales. Cai’s plans for her company include further expansion into the tourism sector through an increased emphasis on gift and souvenir sales, as well as engagement with a wider diversity of folk cultures to bring their unique products to market.
For more information on MinYiYuan, see the extended company profile.
CBPAK
PDF Version
Claudio Bastos had plenty of reasons to found his sustainable packaging company, CBPAK, in 2002. He had a strong academic background as an engineer, decades of executive-level experience managing business turnarounds, a unique product and, he adds, a drive to create a business that would leave a better future for his children. “The world is changing,” Claudio explains, “I needed to be involved in a business that takes care of the planet.” He decided to create a company that would meet these criteria while helping to satisfy a vast market demand for biodegradable packaging materials.
This material is the primary CBPAK product, a polymer made from cassava starch that, when mixed with a special adhesive, is compressed in CBPAK’s patented machines to be thermo-molded into virtually any shape. The durable nature of the CBPAK material makes it ideal for penetrating Brazil’s $50 million per annum national food packaging industry. Claudio’s other target market is buyers of tubes made for incubating plants. These heavy plastic devices are used mainly by paper companies seeking to replenish their supply of raw materials. This is roughly an $80 million market in Brazil with half of the tubes being discarded after the first or second use.
Claudio developed a product that taps into these considerable markets while addressing the environmental challenges that the substantial material consumption poses. CBPAK packaging is made from 96 percent biodegradable materials which are sourced from vegetable crops that are heavily abundant in Brazil and completely renewable. The packaging itself is exceptionally sturdy, a difficult achievement for biodegradable substances. CBPAK’s key innovation to address this is a protective, environmentally safe film supplied by BASF that makes the final product’s durability competitive with unsustainable alternatives.
Despite the price premium, Claudio points out that he is selling more than a commodity; he is marketing a solution that consumers will understand and value. In taking this holistic approach, CBPAK satisfies the demands of two types of buyers, those that are seeking sustainable solutions because of regulations that encourage businesses to reduce their footprint, and buyers that actively seek these solutions to complement a sustainability focus in their business model. Both segments are growing rapidly, and CBPAK is in discussions with numerous potential partners, such as organic food producers, food exporters, and supermarkets including Wal-Mart, to form sales channels.
Growth prospects are high for Claudio’s company – CBPAK has entered into a partnership with BNDES, Brazil’s Development Bank which is associated with the Ministry of Development, Industry and Foreign Trade. BNDES now owns a 30 percent stake in the company and is opening credit lines for the purchase of equipment and materials. Claudio estimates that CBPAK will begin operating by the end of the year and will reach $7 million in revenue by year five. The company’s unique product could revolutionize the way people think about packaging, with tons of discarded Styrofoam containers being replaced by biodegradable packaging. With no directly competing products, the potential for market penetration in Brazil and abroad is tremendous.
For more information on CBPAK, visit www.cbpak.com.br or see the extended company profile.
 If developing sustainable toilets does not seem to be the most glamorous venture in China, it is certainly one of the most important – and potentially lucrative. With a projected population of 1.4 billion by 2050, the country is under increasing pressure to find sustainable solutions to waste management and resource use. As Wu Hao, the founder of environmentally-friendly Landwasher toilets, reflects, “Assuming all of our country uses water-flushing toilets, not even the Yangtze River and the Yellow River will be enough.”
Since beginning operation in 2001, Landwasher has grown to become China’s leading company in designing energy efficient and water conserving toilets. The company has experienced growth rates averaging 100 percent in each of its first five years, set up six sales outlets throughout the country covering 27 provinces, and grown assets to 40 million Yuan (over $5.2 million USD). Landwasher’s success results from the design and patenting of a technology superior to that of its competitors, including those associated with foreign companies. Specifically, its special-purpose agent and sterilization process requires no water and little electricity to flush – two resources in growing demand and of decreasing availability. Moreover, because the special-purpose agent is free of heavy metal and phosphorous, discharge composts quickly and poses no harm to the environment. Landwasher’s technology is patent-protected in China, Australia, New Zealand, and South Africa, and is awaiting approval in eight additional countries and regions including the United States, Japan, Russia, India and the EU.
Driving the company’s success is Wu Hao, the company founder and general manager. After graduating from Peking University’s Physics Department, Wu Hao spent three years in manufacturing, five in securities investment and eight in corporate management. He has put together an impressive management team with degrees and experience in business establishment, technological development, law, marketing and finance.
Perhaps most importantly, Wu Hao exudes the dedication of a successful entrepreneur. He has served as the executive director of the Beijing Municipal Environment Sanitation Association, and in 2006, was elected a managing director of the Public Toilets Professional Committee belonging to the China Urban Environment Sanitation Association. He knows his market completely, and when asked about what drives him, he reflects that “on a personal level, I love the natural environment...I can’t endure the large scale waste and damage to the environment caused by the process of construction in China.”
Wu Hao and Landwasher show no signs of slowing down. This past year, the company was selected by the 2008 Olympic Organization Committee as a manufacturer of mobile toilets for the Olympic Games. Landwasher is expanding from the urban utility and tourism sectors to the travel, cargo vehicle and residential markets. In order to finance this growth in production, R&D and sales, the company is looking for an investment of about $4 million. This relatively small capital inflow has the potential to realize China-sized returns – for both investors and the environment.
For more information on Landwasher, please visit www.landwasher.com or see the extended company profile.
|
|
|
|
|
| Sponsors |
|
|
 |
|
| Partners Highlight |
|
|
 |
|
|
|
|
