My Eco En­ergy in­tro­duces BS-VI bio-diesel

Auto components India - - SPECIAL REPORT - Story by: Ashish Bha­tia

It was in Au­gust 2014 that the Punebased My Eco En­ergy Ltd (MEE), a bio-diesel man­u­fac­tur­ing com­pany, launched a bio-diesel fuel un­der the brand name ‘In­dizel’. The com­pany launched the first bio-diesel sta­tion at Lonikand near Pune. Made from veg­etable oils and feed-stock like palm stearin and palm fatty acid dis­til­late, the bio-diesel was claimed to be ca­pa­ble of re­plac­ing fos­sil diesel com­pletely.

In 2017 June, the pro­mot­ers of the com­pany have resur­faced. Brief­ing the me­dia on In­dizel re­cently in Mum­bai, the com­pany laid out an at­trac­tive busi­ness propo­si­tion. Co­in­cid­ing with In­dia’s re­cent up­grade to Bharat Stage IV (BS-IV) emis­sion stan­dards, the tac­ti­cal move comes 3 years ahead of In­dia’s tran­si­tion to BS-VI stan­dards in April 2020.

Ex­pect­ing to ride the wave of this ma­jor leap by the en­tire au­to­mo­tive ecosys­tem, MEE is pitch­ing In­dizel to re­tail in­vestors as the only fuel in the coun­try meet­ing the BSVI (Euro-6) emis­sion norm. The com­pany has in­stalled 1 demo pump each in Ma­ha­rash­tra, Ra­jasthan, Andhra Pradesh and Te­lan­gana for in­ter­ested re­tail in­vestors to ex­pe­ri­ence the dif­fer­ence of the bio-diesel over con­ven­tional diesel. It has in­vested Rs. 250 crore for the ven­ture.

MEE is tar­get­ing con­ver­sion of al­ready func­tional traders, across in­dus­try seg­ments, in a bid to build a pool of In­dizel re­tail­ers. With claims of 600 re­tail­ers hav­ing signed-up, MEE aims to launch 50 pumps over the next 3 months. In line with the trend of as­set-light busi­ness mod­els, it brings to the ta­ble, fuel-sta­tion mod­els that are multi-func­tional. They can be set up in the in­vestors ex­ist­ing busi­ness premises or on a stand-alone site on a com­pa­ny­owned dealer-op­er­ated model. The premises will be owned by the re­tail in­vestor to be­gin with, while the onus of add-ons like train­ing, equip­ment and guid­ance will be with MEE.

It is claimed that MEE is one of the only 7 com­pa­nies in the coun­try, to hold an op­er­at­ing li­cense to re­tail fuel, known to have a rel­a­tively high en­try bar­rier. MEE aims to achieve about 10% share of the overall diesel mar­ket in 6 or 7 years for which it plans to open 4,000 fuel sta­tions across the coun­try in 4 to 5 years.

In­dizel: The DNA

In­dizel, like most bio-fu­els, is made from veg­etable waste. MEE uses a blend of 3 such bio-fu­els avail­able in Sin­ga­pore. Man­u­fac­tured out of Sin­ga­pore, ac­cord­ing to Sachin Labde, Co-founder, MEE, it is what makes In­dizel unique. Re­fus­ing to di­vulge the pre­cise com­po­si­tion, Labde drew at­ten­tion in­stead to the for­mula not be­ing patented to avoid dis­clos­ing the com­po­si­tion. Fil­ing a patent re­quires the work­ing de­tails to be made public which the com­pany fears. The work­ing de­tails could in­clude de­tails like the quan­tity and value of a prod­uct that is sold, man­u­fac­tur­ing base, quan­tity of pro­duc­tion or im­ports etc., mak­ing it vul­ner­a­ble to pla­gia­rism.

Indziel, which re­duces emis­sions bet­ter than fos­sil-based petroleum prod­ucts, sur­passes the BS-VI emis­sion stan­dards with ease Labde said. “In­dizel burns cleaner than petroleum-based fu­els and re­sults in

lower emis­sions of car­bon monox­ide, par­tic­u­late mat­ter and un­burnt hy­dro­car­bons. Com­pared to fos­sil­based fu­els con­tain­ing sul­phur at 500 parts per mil­lion (ppm), In­dizel con­tains less than 10 ppm,” he said.

Ac­cord­ing to San­tosh Verma, Co-founder, MEE, the ini­tia­tive will not only ap­pend value to the in­dus­try and com­mu­ni­ties, it will help them con­tain the most press­ing en­vi­ron­men­tal con­cerns of to­day. “It is not only a bet­ter al­ter­na­tive to or­di­nary diesel but also is eco­nom­i­cal and suit­able for the ve­hi­cle ow­ing to higher fuel ef­fi­ciency. In­dizel en­sures a smoother ride as higher lu­bric­ity pro­vides a longer en­gine life,” he added. In­dizel meets Euro­pean (EN 590 Euro-6) and BIS (IS 1460) Bharat Stage qual­ity re­quire­ments. It can be used with ex­ist­ing in­fra­struc­ture, dis­tri­bu­tion sys­tems and en­gines with­out mod­i­fi­ca­tion, he said. Col­lat­ing with the World Wide Fuel Char­ter (WWFC) cat­e­gory 4 re­quire­ments, MEE aims to meet cat­e­gory 5 go­ing for­ward. The Busi­ness case

In­dizel will be made avail­able through MEE’s dif­fer­ent re­tail mod­els such as ‘Ur­ban’, ‘SemiUr­ban’, ‘High­way’ and ‘Satel­lite’. The busi­ness mod­els are fur­ther clas­si­fied into stand-alone, and a shop-in-shop. For the Ur­ban Fuel sta­tions, it is de­signed with sim­ple struc­tures like quick-fill and check­out from the fuel sta­tion. A SemiUr­ban model is suit­able for spacious plots. A High­way out­let, will have all de­sired ameni­ties for trav­el­ers like am­ple park­ing space for big ve­hi­cles, a con­ve­nience store, rest area and me­chanic. A Satel­lite model is more suited to re­tail­ers in ru­ral ar­eas.

In­dizel would be al­ways priced lower than deisel’s mar­ket rate. Re­tail in­vestors can reap good re­turns with one-time in­vest­ment of about Rs 40 lakh. MEE will pro­vide in­fra­struc­ture that in­cludes a stor­age tank (above ground and be­low ground), a fuel dis­penser, stock (as per us­age), a canopy set-up and re­quired au­to­ma­tion. Fuel-sta­tions have a mod­u­lar set-up, and are claimed to be con­struc­tion-free and quick to in­stall. These light, portable units can be trans­ported eas­ily re­quir­ing less space than for con­ven­tional diesel sta­tions. Ev­ery MEE fuel out­let will be in­stalled with an elec­tronic point of sale sys­tem to max­imise ef­fi­ciency.

GST im­pact

In­dizel is claimed to out­per­form other con­ven­tional diesels in terms of key met­rics like per­for­mance, mileage, price and value. For in­stance, a litre of In­dizel is said to de­liver 10% higher mileage. As against diesel priced at Rs 61.67 per litre, for in­stance, In­dizel at Rs 59.67 per litre is cost ef­fec­tive.

But this ad­van­tage could soon be lost with the Goods and Sales Tax (GST) rate of 18%. Bio-diesels like In­dizel could soon be­come costlier than con­ven­tional diesel. GST of 18%% on Rs 59.67 works out to be Rs 10.74 which re­vises the price of In­dizel to Rs 70.41 over the reg­u­lar diesel at Rs 61.67 per litre. Ac­cord­ing to a state­ment from the Bio-diesel As­so­ci­a­tion of In­dia, the higher GST rates could im­pact the bio-diesel in­dus­try reel­ing un­der the pres­sure of com­plex and var­ied tax­a­tion poli­cies of the States. The higher rate of tax is ex­pected to make the in­dus­try un­com­pet­i­tive and this could pose a huge chal­lenge for MEE and its brand In­dizel. It could well re­strain the mass con­sump­tion by even the ex­ist­ing users like OMCs, rail­ways and road trans­porters.

Sources sug­gest that such a price hike could make farm­ers switch back to use of pol­lut­ing fu­els and other prod­ucts. It could foil MEE’s bid to in­crease lo­cal­i­sa­tion in man­u­fac­tur­ing up to 30% by next year as the com­pany has al­ready nar­rowed down 3 man­u­fac­tur­ing units, in Kol­ha­pur, Noida and Vishaka­p­at­nam. Be­yond the price met­ric, In­dizel’s high flash point means that it is out of the purview of the Petroleum Act as it is not ex­plo­sive.

The Out­look

Op­por­tu­ni­ties for MEE lie in di­verse sec­tors like Rail­ways and State Trans­port Un­der­tak­ings (STUs) among oth­ers will­ing to har­ness the ben­e­fits of bio-diesel. Sources claim that a new man­date by 2018 would also re­quire con­ven­tional fu­els to be blended with 5 to 10% of bio-fu­els like In­dizel. Man­dates like these could fur­ther boost the po­ten­tial to in­crease the overall mar­ket size of bio-fu­els, and thus a pos­si­bil­ity to at­tain a sig­nif­i­cant mar­ket share ow­ing to the early mover ad­van­tage it has. With the petroleum in­dus­try turnover last year (2016) at Rs 12.5 lakh crore, it as­sures MEE and its chan­nel part­ners as­sured vol­umes. Per­haps the big­gest rider for MEE would be to over­come its limited pro­duc­tion ca­pac­ity apart from its per­for­mance over time com­pared to con­ven­tional fu­els.

San­tosh Verma, Co-founder, MEE

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