Panamax Tanker

Panamax Tanker

Solar Sailor, Australia

Solar Sailor, Australia

Saturday, May 17, 2008

ACQUIRING A VESSEL

Every year the number of ships for scrap increases. It is estimated that by 2010, 3000 ships per year will be scrapped. Each one broken to pieces on the beaches of developing Asian countries. Polluting the environment. Threatening the health and life of the workers.
Greenpeace and other environmental organisations are placing pressure on the shipping industry to stop contaminating Asian shipyards with their toxic, ’end-of-life’ vessels. They have proposed regulations which will make it more and more difficult for ship owners to sell their ships for scrap without decontaminating them before export to Asia. This could be a costly process, and one that ship owners may not wish to undertake.

This is where we come in. We could offer a service to ship owners where we would take the toxic ships off their hands at a very cheap rate, and perform the decontamination process ourselves. We would then have a clean ship, ready for conversion into the floating desalination plant.

There is currently a project undertaken by Greenpeace which has put 50 ships in the global spotlight. These are toxic vessels that are likely to be scrapped in the next 5 years. Greenpeace are monitoring these ships to make sure they are decontaminated before export, and are asking ship owners to declare the safety of their vessel before it is sent away for scrap. If it is declared safe, the ship will be taken off the list, but it will be replaced by another vessel whose owner has not declared an intention to decontaminate.

These 50 black listed vessels are our primary target!

Future ships will most likely be built with restrictions on the types of materials used. However, for old ships that are nearing scrap stage, our company could provide an attractive service for ship owners.

There is also the possibility of working with NGO’s and other organizations to acquire funding. They may be interested in supporting a business that is creating a new environmentally responsible and sustainable product.

Read : SHIPBREAKING http://www.greenpeaceweb.org/shipbreak/imo.asp

LOCATION, LOCATION, LOCATION !

There are many things to consider when starting up a new business – but perhaps the most important of these is location.

For this project, our choice of location has been limited to the developing world, where consumers are living on less than US$2 a day.

Our choice is also limited by our proposed business concept – delivering fresh desalinated water to arid or water scarce regions.

The map taken from the people and planet website (www.peopleandplanet.net) shows (in orange) countries where access to potable drinking is less than 60%. These countries are our target market, as they have the greatest need for our product and service.

The countries in yellow have access to clean water of between 60 and 95%. They are also a potential market.

I propose we target South East Asia for our initial start-up venture. Of these nations, India has captured my interest for several reasons:

1. Size! India is home to 1/6th of the world’s population, and is the largest country in Asia.
2. Geography – India is surrounded water; the Indian Ocean in the south, the Bay of Bengal in the east and the Arabian Sea in the west
3. Unlike much of Asia, India is a democratic nation with an established and robust judicial system based on British law that has existed for two centuries.
4. The country has relaxed trade rules and an interest in foreign investment – although traditionally Indian law has required that control (or at least partial control) of the operation be in the hands of local partners.
5. English is the language of business and higher education in India.

India is also in close proximity to other water scarce areas in South East Asia, such as Cambodia and Laos (see map). It would therefore be possible to move our operation to these countries without too much trouble. Additionally, India is the world’s largest market for ship recycling. Therefore, acquiring a vessel from an Indian shipyard would be easier if we were running our business from India.

Once we have decided on a country of origin, we need to decide on a specific locale within this country. This will require further research. There is a similar project currently operating off the Chennai coastline, with a water capacity of one million litres per day. It would not be sensible to launch our business too close to our competitor.

FIRST MOVER ADVANTAGE & COMPETITIVE ADVANTAGE

First-mover advantage is the advantage gained by the initial occupant of a market segment. This advantage may stem from the fact that the first entrant can gain control of resources that followers may not be able to match. Sometimes the first mover is not able to capitalise on its advantage, leaving the opportunity for another firm to gain second-mover advantage.

A competitive advantage exists when a firm is able to deliver the same benefits as its competitors, but at a lower cost (cost advantage), OR, deliver benefits that exceed those of competing products (differentiation advantage). So, a competitive advantage allows a firm to create superior value for its customers, and superior profits for itself.

Our business concept must have some sort of competitive advantage over other products in the market. This is especially important in India, as there is already a similar business operating there. We must find a way to better our competitors either in cost or product differentiation, thus securing a second mover advantage in the Indian market. Our experiences may lead us to a first mover advantage in other South East Asian markets where this service has not yet been explored.

Thursday, May 15, 2008

GEE: INITIAL PROPOSAL

FACT: According to the ‘Pilot Analysis of Global Ecosystems’, carried out by the World Resources Institute, currently 2.3 billion people, or 41 per cent of the world’s population, live in water stressed areas. Of this total, 1.7 billion live in water scarce areas, with less than 1,000 cubic metres per person per year.

SOURCE: http://www.peopleandplanet.net/doc.php?id=671&section=14

PROBLEM: Acute world fresh water shortage

POSSIBLE SOLUTION: Solar powered water desalination plant, moored off the coast of developing countries, with the potential to pump fresh water inland for distribution to water scarce areas.

BUSINESS ANALYSIS: The aim of this assignment is to create a profitable business venture, affordable to the ‘bottom of the pyramid’ market – people who earn less than US$2 a day.
This business concept not only has the potential to create a large revenue, but it could also have the capacity to change the lives of those in need.

Every year hundreds of container ships are sent to ship recycling yards to be broken down. Most international sea going vessels have on-board desalination plants which convert salt water into fresh water for use on board the ship. If we could purchase an ‘end-of-life’ ship before it is sent to the wreckers, and convert it into a floating desalination plant, we could potentially generate enormous amounts of fresh water which could be pumped to storage units on shore.

The desalination plant could be solar powered, because there is an excess of sunlight in many developing nations. Therefore, the only costs would be the initial start up costs of purchasing the vessel and installing a solar powered generator on board. The pipelines which would be used to pump the water ashore could also be solar powered, thus making the business completely sustainable.

If we sold our water at an extremely cheap rate (a few cents a litre), our product would be easily affordable for the ‘bottom of the pyramid’ market, and our start up costs would quickly pay for themselves through the revenue earned.

The benefit of buying an entire container ship, rather than just the desalination unit, is that the hold of the ship could be cleared out and converted into a storage area for the fresh water. An old Panamax tanker (designed for use on the Panama canal) would be ideal. These ships were the biggest of their kind when they were built about 25 years ago, but they are now coming to the end of their lifespan and are no longer needed. They would be cheap to purchase, and have a full capacity of over 50, 000 tonnes. That is a lot of fresh water!!

A tanker is also transportable, so if there is the possibility of bad weather the ship could be moved to calmer waters.

Once the business is up and running, the ship could be replaced by a barge with several desalination units and a solar powered generator. The water could be pumped directly to shore and stored in pump houses, and the ship could be moved to a new area and the process could start again.

Once the initial costs have been repaid, the floating desalination plant could be donated to ‘bottom of the pyramid’ nations to sustain their development.

Our business will distribute fresh water directly to these villages – thus eliminating the time and effort required to pump water from a well. It will also improve the health, hygiene and economic development of these communities.

In a poverty reducing cycle, the excess crops that could be grown with the increased water supply could be sold to generate a larger income for these communities.

2005 to 2015 is the International decade for Action : Water for Life. Let’s reverse the cycle of drought and give water to those who are in desperate need.

http://www.un.org/waterforlifedecade/

Please read this article on a similar project in India, established in 2007.
(Note our project is slightly different because it is solar powered, thus being completely sustainable and environmentally friendly)
NB. India is the world’s largest ship recycling industry, followed by China.

http://www.headlinesindia.com/archive_html/18April2007_35210.html

BE READY TO DISCUSS THIS PROPOSAL AT OUR NEXT MEETING ON FRIDAY. THINK ABOUT ALL ASPECTS OF THIS BUSINESS, FROM PRODUCTION TO DISTRIBUTION TO AN ORIGINAL TARGET MARKET. GOOD LUCK !

Wednesday, May 14, 2008

IDEAS TO GET YOU THINKING...

THE FORTUNE AT THE BOTTOM OF THE PYRAMID:

OUTLINE: C.K Prahalad proposes that businesses, governments, and donor agencies stop thinking of the poor as victims and instead start seeing them as resilient and creative entrepreneurs as well as value-demanding consumers

Statistics have shown that there are tremendous benefits for multi-national companies who choose to serve these markets in ways responsive to their needs.

There are also poverty reducing benefits if multi-nationals work with civil society organizations and local governments to create new local business models.

THE AIM: To “co-create businesses and markets that mutually benefit the companies and the communities”. (Hart & Simanis)

SOME EXAMPLES: Here are some examples of companies that have developed successful business partnerships with income-poor communities, while creating a product or service that has enriched the lives of the people in this “bottom of the pyramid” market.

1) Micro-credit

One example of “bottom of the pyramid” is the growing microcredit market in South Asia, particularly in India. With technology being steadily cheaper and more ubiquitous, it is becoming economically efficient to “lend tiny amounts of money to people with even tinier assets”. The firm discussed in the article, Sa-Dhan, argues that the availability of credit to the poor “helps the poor but allows banks to increase their business”.

2) Agriculture

For example, eChoupal in rural India.ITC manages an agricultural trading company. To eliminate the inefficiencies in its supply chain caused by corrupt middle men at local rural markets, it created a network of “e-Choupals” (choupal = village square) in rural communities. Through these e-Choupals, individual farmers have been able to check the market trading price of their produce and sell it directly to ITC. Both the individual farmers and ITC have increased their revenues, because the layers of ineffiency no longer have a role in the transaction between seller and buyer.

3) Market-specific products

An example of product that is designed with needs of the very poor in mind is that of a shampoo that works best with cold water. Such a product is marketed by Hindustan Lever.

4) Business and Community Partnerships

The SC Johnson Company has been partnering with youth groups in the Kibera slum of Nairobi, Kenya. Together SC Johnson and the groups have created a community-based waste management and cleaning company, providing home-cleaning, insect treatment, and waste disposal services for residents of the slum. SC Johnson’s project was the first implementation of the Base of the Pyramid Protocol

5) Housing

Community house-building projects that use natural materials. Or provding cheap, reliable alternatives to existing materials.

6) Health Care

Scenar – Low cost Russian medical technology that can easily be used by villagers http://www.benedickhoward.com/scenar-results.html
Specialised surgery facilities eg http://www.aravind.org

7) Energy

Biofuels made from plant extracts. Cassava plant??

8) Education

“Action-learning” in schools – projects, such as house building, water systems, organic farming etc, that benefit the community while still teaching maths, science, literacy.

Early childcare centres which allow both parents to work, and also focus on community connectedness, early education and women’s leadership.

9) Waste

Reuse and recycle systems. Collecting unwanted materials, such as car tyres, and turning them into useful products, eg. Shoe soles.We could provide the community with the equipment to manufacture these recycled products. The only cost would be the start up cost of the equipment, and the new product could potentially change peoples lives.

Recycling unwanted or donated reading glasses from developed countries, and providing a medical service and free eyewear in developing communities.

10) Technology

The $100 computer project, designed to revolutionise education of the world’s children. The proposed $100 machine will be a Linux-based, full-colour, full-screen laptop that will use innovative power (including wind-up) and will be able to do most everything, except hold huge amounts of data. The move is designed to offer the most important aid possible to a third world country – education alone will solve many of the problems of a country. The idea is to create a low cost computer by optimising the system, the system software and the componentry in numerous ways – essentially all designed to reduce the cost, weight and complexity of the computer and its constituent components. The plan also calls for the the laptops to be manufactured in very large numbers (millions) and sold directly to ministries of education in third world countries, which can distribute them like textbooks. When these machines are turned on, they form a peer-to-peer mesh network with nearby computers – a concept initially developed at MIT and the Media Lab. MIT is currently exploring ways to connect them to the Internet at very low cost.

These ideas should get you thinking in the right direction.

I have a few more ideas that I will discuss at our meeting. Have your own ideas ready to present to the group on Wednesday.

Talk to you then!
Jenna

Sunday, May 11, 2008

WEEK TWO

Hi guys!

First of all i would like to welcome Yunusa Bameyi from Nigeria to our team! There are now 5 of us on board, so lets get to work!

There are a few things we must organise straight away:

1. We need to arrange a time that we are all available to chat online.

I will be online every morning at 7am NZ time. That is around 8pm in Nigeria and around 2pm in Colombia. Does this work for everybody? If not, please let me know a time that would suit you better. Check the link for the personal world clock (below) to see if everybody is awake at the time that you want to chat.

2. We need to organise a way to communicate online - Snowflakes has suggested yahoo messenger, does this work for everybody?

Smowflakes has already given us his Yahoo messenger name. You can add me as jenna.mein@yahoo.com. If you don't already have Yahoo messenger, please sign up ASAP!! It is very easy and doesn't take long at all. Or, if you would rather use a different chatroom, please let us know.

3. By Wednesday, we must have decided on our business concept proposal.

I really like Snowflakes idea, and i think there are many ways that we could use the Cassava plant to create a profitable business. But I think we should all come up with several ideas of our own and discuss all our options before deciding which one to use for this assignment.

Could everybody spend some time this week and research some potential business ideas?

We must come up with a business proposal that is affordable for the worlds 4 billion people who earn less than US$2 a day. Our idea must benefit the lives of the people in this market, yet it must still generate a profit so that we can sustain our business over time, and continue to help those in need.

Below are a list of possible ideas to get you thinking in the right direction:

a. Education - "action learning" in schools. eg. projects such as building houses, water systems, organic farming etc that both benefit the community and teach basic skills such as maths, science and literacy.

b. Waste - Recycling systems etc

c. childcare systems that provide early education to children and give parents an opportunity to work

d. Energy from biofuels etc.

I will remind everybody again that the final date for this assignment is 22 May. That is in about a week and a half! I know that everybody is very busy - so am I! - but I really need your full commitment for the short time that we have left. This is a TEAM project - we must work together and help each other in order to complete the assignment successfully.

Please be in touch over the next few days with your business concept ideas.

And hopefully I will talk to you on Yahoo messenger very soon!

Best regards,

Jenna