looking for advice on a new venture

jer1

Hi All,

New to the form. I am looking for advice. We are looking at a business for the past year it is turning waste oil into diesel. We are trying to partner with a person in Asia through an Irish connection.(he has no business interest in this) The person is Asia has a machine built and operating on a small scale. It is not certified for Eu regulations and i will have to make a good few modifications to make it comply. What we are looking at is making a deposit on the machine it is sent over to us to be modified got running properly Ce certified and them paid for in full. We are not licenced to take in waste oil but a company beside us can. We have never done anything like this before so we are looking for advice as how we should proceed with the project.

Any advice would be appreciated.

First concern would be the manufacturer in Asia. Sounds like this won't be a cheap business to startup so I would invest in a trip there (which country are you talking about?), see the machine, see it in action and see what kind of a guy your dealing with on the other end.
I presume this machine is patented, if so check the patent, and check if its worldwide and up to date and filed properly, or if its something thats easily navigated.

There maybe an opportunity to make this machine yourself and cut out the Asia risk.

In the meantime see if there are any regulations or licenses you require to sell diesel, although can't imagine that being too much trouble.

You also need to work out how much its going to cost exactly to partner with the local company to take in the oil, the cost of processing it through your new machine, packaging it and then retailing it. Are you going to retail it yourself or use an established retailer? Is there enough margin available to do that?
Have a look at the diesel prices over the last 5 years and fluctuations, can you handle a drop in price and still be profitable?

pedronomix

sounds like a a load of bull waste to me! what kind of oil in and what kind of diesel out? If you don't know what you are doing, you will get done! read this http://en.m.wikipedia.org/wiki/2008_Irish_pork_crisis

jer1

Thanks for your reply EL Rifle. The machine is in the Philippines. I intend to travel in the next 2 weeks for 3 days to see the machine. Videos have been sent of the machine being operated so I have a good idea of what Iam seeing.
The machine is not patented I wouldn't build one myself as it is too complicated. I saw a machine like this one this year it would cost alot if built wrong.

When we would be using the fuel ourselves it will only be the tax that we have to pay of .05/cent L. We can get it deliver for free and it will cost us 20cents/Liter to produce. So my total costs are .25cents. I can't see fuel prices coming down to this.

We can make it pay in 2 years all going well using it fro our own use, but if we ramp up production we can produce alot more than we use so then we will go to the market.

All questions welcome as I am looking for the reasons why not to do this.

Also where would be the best place to go for funding and advice.

jer1

Thanks for your reply pedronomix. We will be able to produce a diesel and kerosene fuel. Yes i am aware of the consequences that is why i am trying to negotiate paying down a deposit when the machine is sent in and wait until the machine is full operational here and then pay the balance. I have a good relationship built up him. He doesn't have the funds to take the machine to the next stage, so this is where I can help. When he doesn't have Ce marking on this machine it will not sell in Europe.
The oil won't be going into Animal feed.

jer1

jer1 wrote: »

Thanks for your reply EL Rifle. The machine is in the Philippines. I intend to travel in the next 2 weeks for 3 days to see the machine. Videos have been sent of the machine being operated so I have a good idea of what Iam seeing.
The machine is not patented I wouldn't build one myself as it is too complicated. I saw a machine like this one this year it would cost alot if built wrong.

When we would be using the fuel ourselves it will only be the tax that we have to pay of .05/cent L. We can get it deliver for free and it will cost us 20cents/Liter to produce. So my total costs are .25cents. I can't see fuel prices coming down to this.

We can make it pay in 2 years all going well using it fro our own use, but if we ramp up production we can produce alot more than we use so then we will go to the market.

All questions welcome as I am looking for the reasons why not to do this.

Also where would be the best place to go for funding and advice.

You'll learn a lot from your trip to the Phils.

I spent 4 years there building a development. Anything that can go wrong will go wrong! Just be aware that they have a different business philosophy over there, whereby whats fair and equal doesn't come into play.
My strategy to get my project finished was to assume whoever I was dealing with was going to try and screw me, and staying one step ahead all the time. That generally worked. Just don't assume anything will be straightforward.

Also when I was there I saw and was shown a lot of mickey mouse fuel inventions. Additives for fuel tanks, devices to reduce generator fuel consumption and so on. None of them patented, manufactured with any sort of quality or decent materials or in any way good enough to build a proper business out of. The science behind was always very basic.
I'd be making sure theres no one else is making this machine anywhere else, I would hazard a guess that there is. I was pretty sure you were talking about a Filipino invention before you even said it.

I remember looking for door handles in Manila, going into a specialist store and picking up a handle that looked great but was pretty cheap. What's it made of I asked? Steel he said. Really I said? Yes, Sir! he said. I tried to bend it without a lot of force and the handle snapped in two in my hand. Steel you said? Yes Sir but Chinese steel! This is the kind of stuff you'll be dealing with there

pedroeibar1

jer1 wrote: »

Any advice would be appreciated.

If what you write is true, this is a really, really stupid idea. It is so bad it does not justify the name 'Business idea'. The scheme stinks, some guy puts a few bits together and sucks you in, you try to recoup your investment and get dragged in further, a downward spiral.

Apart from the hope of getting someone to ship a machine half way across the world and release it to you on the basis of a deposit, (would you do that?) you compound the error by investing in a trip costing thousands before asking the most basic questions –

How (knowledge/skills) to bring the machine to the next level?
No idea (‘a good few modification’) on the amount of upgrade necessary.
How to have it certified at EU level?
How to maintain it at that level?
Where to obtain ‘waste oil’ in sufficient quantities?
How to get environmental licences to collect/store/process waste oil?
Ditto for Planning process.

How much (and how available) insurance would be for all of this, including liability (to cover what your 'fuel' does to someone's BMW)?
The list goes on........... It reminds me of the idiots who bought rental properties in the Cape Verdes and said 'they are great value, they are even guaranteed rented out for two years' - when the things were sold for 150k and built for 50k.

And, BTW, you still have to find a market for the output.

thecommander

What's the byproduct from it? Where do you dispose of that?
Also, I'd imagine if it's fuel then it'll be taxed like other fuels, plus vat.

pedronomix

Slab Murphy could be your wholesaler or any other border operator!! Can the end product be certified to EN 590?

pedroeibar1

pedronomix wrote: »

Slab Murphy could be your wholesaler or any other border operator!! Can the end product be certified to EN 590?

:) I was thinking along those lines when I wrote my post above but decided I'd been harsh enough.:D