Risk Management on Bio Fuel

Topics: Biofuel, Risk, Petroleum Pages: 3 (846 words) Published: March 6, 2012
There is several risk identification to be asked in this projects, those are as follows: 1. Environmental risk
* This is particularly in connection with natural resources, there is a risk that the natural resources, raw materials, or other factors of productions necessary for successful operation may become depleted or unavailable during the life of project * Does the company engage the independent consultant to do the assessment and research of conservation of the land * How is the community around the land (site) or the farmers? Is there any support or close communication with the community surround the area? * Did the company have done the analysis of environment (AMDAL) upon the using of the land? * How about the chemical materials being used to support this production of bio fuels? Without these chemical materials the qualities of bio fuels become lower. * Natural disaster, and forest fire during the dry seasons near the plantation. How is the historical condition of the forest near plantation during dry season? * Uncertainty on the harvest season as it may affected by weather condition 2. Demand risk

* The demand of the bio fuel is fluctuate, so it will be better to understand the demand of this industry, especially the market for this komodo bio fuels. * The negative campaign against the bio fuel industry, especially relate to environmental condition can reduce/stop the demand of the bio fuel 3. Economic Risk

* Economic condition influences the demand from the market on bio fuel. Especially the majority of the market (70%) to Europe. * Exchange rate risk as the market is using Euro and the loan is in USD 4. Industry risk analysis

Entry Barrier Risk
* This industry is highly capital requirements, and hence the entry barrier is high. * How is the price of other conventional fuels? Because it may give the competitive advantage to bio fuels selling as a substitute to other...
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