CaliPharms Inc (KGET)

[HUBINVESTOR]

PART TWO:

rawman asked "QUESTION WHETHER THE TOTAL JOB COULD BE DONE FOR THE "CLAIMED" $160 or $170 PER METRIC TON!" ?

Sensitivity Analysis
To examine how each major cost factor affects the profitability of pellet manufacturers, sensitivity analysis is conducted by modifying each within its cost range. Figure 3.8 shows the sensitivity analysis results by changing multiple cost inputs. Feedstock cost is the most sensitive factor influencing the profitability of pellet producers. A 22% decrease in biomass feedstock cost can increase the gross margin from 20.7% to nearly 30%. To achieve the same growth, capital cost has to be decreased by around 70%, while personnel or energy or transportation costs have to be reduced by more than half.


....The pellet production industry should remain a fairly attractive investment when the FOB price remains $160/tonne or more.


http://www.usendowment.org/images/The_Wood_Pellet_Value_Chain_Revised_Final.pdf