The Halcyon Group: Prospects of peat briquette and pellets market and development potential for Alternative Fuel Resources

Feasibility study for energy investment company to enter Russian market of peat briquettes and pellets

Project description

Alternative Fuel Resources is a management company specializes in assets development in alternative power engineering (part of The Halcyon Group).

The Halcyon Group is one the leading Russian investment companies in power engineering .
See more information: www.alt-resource.com, www.halcyonadvisors.ru  

Set a problem 

The Halcyon Group was looking for opportunities to enter into alternative fuel markets. As one of the most prospective was chosen peat briquette production market (granule) based on own roar resources (being as a part of Halcyon Group, Alternative Fuel Resources owned two peat-fields). 
Halcyon Group Management set a goal to evaluate prospects of peat briquette and pellets production market in order to make a decision about prospects of a peat briquette plant building.  

What we’ve done

The main peculiarity of the project was that peat briquette production was new enough for Russian market and it has not spread enough yet. Therefore, the main task for the consultants was to forecast key factors influence on the peat fuel development. 
In order to accomplish the task the consultants had to analyze the following questions:

  • Economic effect of peat use in comparison with other kinds of fuel (gas, coal, black oil (mazut), charcoal pellets);
  • Evaluate technical opportunities and economic expediency of peat use for customers who use other kinds of fuel now;
  • Evaluate peat cost limit taking into account all the factors (roar materials quality and its mining cost, delivery, investments, operating costs, etc.);
  • Economic effect of peat briquette and pellets organization;
As a result the consultants evaluated customers’ current willingness to use peat fuel as well as factors and its critical points that could make use of peat be more spread as the main kind of fuel.
It was made a trends long-range forecast based on these markets development in Europe and the US taking into account development specific of power engineering market in Russia.
Taking account of considerable difference in development of different regions, consultants made a more detailed research of some definite, the most attractive regions:

  • Market volume for different regions and customer segments;
  • Sources of roar materials and its features;
  • Key factors to buy depending on key market segments;
  • Power balance and competitive ratio in regions (taking into account transport );
  • Call and demand cost characteristics;

Result

As a result of the project, The Halcyon Group Management managed to value fairly prospects of peat briquette market development. Analytics methodology for regions was also developed so as the company could make decisions whether it is feasible to construct peat briquettes plants in different regions or not.

Reference


"Our company was satisfied with ALT R&C consultants work. As a result we were given answers to all of our questions and we also got recommendations for further analysis of Russian regions. The information we got let us use it to make decisions about briquette plants building in future ".  

Marina Vodopyanova, 
Managing director 
Alternative Fuel Resources