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Procurement Strategies for Alternative Fuels

Procurement Strategies for Alternative Fuels. Mark Mutter Cement Performance International, UK. Procurement Strategies for Alternative Fuels. Introduction Alternative Fuels History Defining the relationship Pricing and relationship Longer term supply Supply chain developments.

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Procurement Strategies for Alternative Fuels

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  1. Procurement Strategies for Alternative Fuels Mark Mutter Cement Performance International, UK

  2. Procurement Strategies for Alternative Fuels • Introduction • Alternative Fuels History • Defining the relationship • Pricing and relationship • Longer term supply • Supply chain developments

  3. Alternative Fuels History • Price driven development from both cement and waste industry • Developments in the emissions trading schemes • One-off incidents – e.g. animal meal • Global reduction in CO2 emissions

  4. Defining the relationship • Cement industry and waste industry vastly different • Cement – high margin, protected prices, stable • Waste – lower margin, ever increasing legislation, unstable • Cement industry : Waste = Profit • Failed to understand waste industry • Wanted all the gain • Progressively lost out on volumes of waste

  5. Defining the relationship Cement industry failed to consider the relationship Supplier or customer? Other outlets for waste industry Balance of power Availability to take waste

  6. Defining the relationship • From both parties require • Credibility • Reliability • Understanding • Commitment

  7. Pricing and Relationship • Treat the waste supplier as a customer • Understand the economics • Be up front with the costs of use • Trials, plant, extra cleaning, laboratory testing • What are the give aways? • Build long term relationships

  8. Long term strategies • Production line of fuels • 1 new fuel per year • Replaces fuel or maintains revenue stream • Awareness of fuel impact required • Need to adapt to each new fuel • Very resource intensive

  9. Long term strategies SOLVENT WASTE WATER CARFRAG GRATE PETCOKE TDI KILN SOLVENT WASTE WATER ANIMAL MEAL

  10. Long term strategies

  11. Long term strategies

  12. Supply Chain Developments Strategic alliances Stabilisation of market Ties up availability Waste Processing companies Designer fuel using many waste sources Provides flexibility to all Reduces resource requirements Maintains revenue streams

  13. Waste Processing Model PRODUCER PROCESSING CEMENT PLANT

  14. Waste Processing Model WASTE PRODUCER PROCESSING CEMENT PLANT

  15. Conclusions Need to overcome history Need to understand Business dynamics Economics Need to build portfolio of fuels Latest developments are for blended fuels through waste treatment companies

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