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Chapter 1- Introduction
1.1 Background and Context
A non conventional source of fuel that is obtained from the residues of crop plants and animals is known as biofuel (Yacobucci and Schnepf, 2010). Biofuels have rapidly acquired the status of an attractive alternate for the fossil fuels and are being used in transport such as road, water and air transport. Many developed and developing countries are moving towards measured surrogating of fossil fuels with biofuels. Biofuel are generally of two types, the ethanol and biodiesel.
Biofuel is a term that entails both bio-ethanol and biodiesel is the foremost candidate for replacement of petroleum oils in transportation. Biofuel, as its name indicates, is derived from biomass. Mostly it is synthesized by means of food crops residues such as sugarcane, maize, wheat etc. Biomass is available in different forms and almost all forms of biomass can be utilized for the production of biofuels (Van der Laaka et al., 2007). Different crops can be used for the efficient production of biofuels that enables different countries of the world to use the most common crops in their regions.
The rapid increase of biofuel production is the result of recent economical, political and environmental developments round the globe (Singh, 2008). One of the most important developments in the recent years is sudden rise in crude oil prices, the oil prices reached as high as $140 per barrel. The economies of developed as well as developing countries have been threatened by such a huge hike in crude oil prices.
According to the report published by International Energy Agency (IEA) in 2005 states that the oil importing countries have put biofuels as the first priority agenda after the recent changes in the global oil prices. Petroleum oils have been and still are the life blood for the industries of the developed as well as underdeveloped countries, but recent events on international scene have put their energy security under threat.
The increased awareness of environmental issues produced due to burning of fossil fuels has also increased the importance of biofuels that are considered more environmental friendly. The emission of green house gases has proved to be a threat for the existence of life on this planet. In this scenario the biofuels are the only alternative for the hydrocarbon based fuels and they are of great importance for governments as well as consumers. The governments of numerous developing countries including India are taking steps to promote biofuels and biofuel industry as a replacement of fossil fuels (Charles, et al., 2007). Biofuels are relatively cheaper than the fossil fuels; industry and business necessitate continuous mobilization of goods from one place to other places and require economical fuel for this purpose.
Another important notion about the fossil fuels that is of great importance and enhances the needs for the development of the biofuel industry is the fact that biofuels are non renewable resources of energy. They will run out ultimately and require million of years for their formation; this fact also necessitates all countries including India to move forward towards the renewable sources of energy. Biofuels as stated above are synthesized by utilizing crop and animal residues are the most suitable and renewable energy replacement for fossil fuels. Governments, both the regional and national, are making policies to promote biofuels by making different policies to enhance biofuels production.
India has a vast economy and to support this economy it heavily relies on the fossil fuels but the problems and events stated above have caused energy insecurity for the country.
To cope with this insecurity in the energy sector, Indian government has announced to increase the consumption of biofuels in transportation up to 20%. This will help to reduce the reliance on the crude petroleum oils that are currently used to fulfill more than 90% of the energy requirements of the country. The establishment of biofuel industry can be of great help to reduce unemployment in the rural areas, Government is adapting policies to encourage foreign as well as local investors to establish biofuel production units in the country to meet its goal of 20% consumption of biofuels in transport sector. Biofuel industry is still immature in India, the plants for production of bio-methanol are in operation but the biodiesel industry is a nascent industry in India.
There is want of a profitable business strategy for the development of biofuel industry in India, the establishment of such a strategy is essential for the attraction of foreign direct investment for this industry as well as the strategy will help the existing firms to adapt a profitable strategy. Keeping the above discussion in view, we formulate the research question for this study, “What is the profitable business strategy for the development of biofuel industry in India?”
1.2 Aims and Objectives
Biofuel industry is still in its early age in India and other developing countries but to cope with the energy insecurity that is related to the use of fossil fuels, government are keen to establish biofuel industry in India. The policies in this regard are encouraging for the local as well as foreign investors to take a plunge into this newly evolving industry. Keeping in view the current status of the biofuel industry in India, the current study is conducted to achieve following aims and objectives.
The core objectives of this study are:
- To scrutinize the existing condition of energy economics in India.
- To evaluate the existing situation of biofuel industry in India.
- To develop a profitable business strategy for biofuel industry of India and devise recommendations for the investors and stakeholders.
1.3 Research Questions
- What are the existing conditions of biofuel industry in India?
- What are the existing and potential crops that can be used for the economical production of biofuel in India?
- What should be the strategy for biofuel production in India to reduce cost of production and enhance the profit?
1.4 Scope and Importance
Strong resolve of the Indian government to enhance the biofuel production and to cope with the energy insecurity issue in the near future, these circumstances render our project cosmic in scope. India is one of the largest economies of the world, multinationals involved in energy sector as well as the new firms that are planning to enter into the energy production sector by establishing biofuel industry in India will be interested a lot in the development of profitable business strategy for biofuel industry. There are two types of biofuel industries, one for the production of bio-methanol while the second is concerned with the production of the biodiesel. The industry for the production of bio-methanol has some roots in India and it is evolving successfully but the biodiesel industry is nascent and has numerous opportunities for the investors.
The bio-methanol is replacement for patrol while the biodiesel is the replacement of the diesel oil; diesel is the type of petroleum oils that is mostly used in transportation. This situation is encouraging for the new firms to enter the market because there is no competition in the present situation in this sector. The entering firms will be the leaders in the market as far as the production of biodiesel is concerned. As described above, the current study deals with the formation of profitable business strategy for biofuel industry, it involves the strategy for both the bio-methanol and biodiesel.
Biofuels enjoy numerous advantages over the fossil fuels, it is relatively economical and can enhance the levels of energy security because is a renewable source of energy rather than being nor renewable like fossil fuels. A report published by United States Department of Energy (2007) reveals that biofuels are green energy sources because they do not add to the greenhouse gases in atmosphere. The green house gases that are emitted due to burning of biofuels are reabsorbed by the crop plants that are sown for the production of biofuels. Increase in green house gases in the atmosphere is one of the serious concerns related to consumption of fossil fuels and it serves as a rationale to use biofuels.
This project has great importance because it will help to reduce green house gases and global warming by increasing the biofuel consumption and reducing the fossil fuels consumption. The establishment of biofuel industries in the rural areas will guarantee more employment opportunities for the inhabitants of these areas. Improvement in transportation infrastructure, both roads and railways, will be the result of this project. The per capita income will be positively affected by the results of this study.
Biofuel industry is thriving in different developing countries, China and Brazil are the striking examples from all over the world among developing nations while developed nations like USA and UK are also paying attention towards the development of biofuel industry for providing energy to their industries. Different researchers have conducted studies on different prospects of biofuels in India, literature includes the assessments of the potential of biofuel industry in India and some other related prospects but none has worked out a profitable business strategy for the development of biofuel industry in this country.
Therefore the above mentioned study is being conducted to find the answer to the research question and breach a gap in the literature. The results obtained from this study will help the investors to analyze the scope of the biofuel industry in India for the foreign direct investment.
1.6 Overview of Dissertation
The dissertation consist of expands on seven chapter in total, the contents of each chapter are described in brief.
The first chapter consist of detailed background of the biofuels and biofuel industry worldwide and with respect to India; it explains the basic research question with the logical sequence of previous literature and current status of biofuel industry. It also describes the chief objectives of the study along with the rationale for choosing this particular research question as well as the importance and scope of the research question.
Literature review is the main heading of the second chapter; it describes the researches conducted on the production of the biofuels in developing countries, the theories about the biofuels and work conducted relative to the research question. This chapter also contains an over view of the economic conditions of India and energy requirements of its industry in the future. A critical discussion on the relevant theories and their merits and demerits ends this chapter.
The third chapter comprises of the detail overview of different types of the research methodologies used in the research along with the description of the specific research methodology adopted for the research question and rationale for choosing it. In the next section, the chapter entails the complete research methodology, data collecting techniques, type of data collected, a brief overview of data analysis and tools and resources used for this purpose.
A detailed explanation of the data analysis is given in fourth chapter, analysis is divided in three distinct phases, the first phase describes the analysis of the data obtained from customers through email surveys, the second phase describes the analysis of the data collected in Skype interviews and the last phase is the analysis of the literature reviewed in chapter 2. The third phase will be a brief overview of the analysis done at the end of chapter 2.
Conclusion derived from the data analysis is the fifth chapter of this dissertation. It entails the conclusion obtained by different methods and tools used for data analysis relates them with each other. The sixth chapter consists of the recommendations for the investors in the biofuel industry of India; these recommendations are based on the results obtained by our study. The seventh and last chapter describes the researcher's reflection about the research methods and effects of conducting this study on researcher's personal abilities and skills.
1.7 Assumption and Limitations in Research Project
This study do have some limitations due some inevitable constraints, most crucial of them include the time and resource constraints. Time for the research was not enough to conduct this study at length; I had to take relatively small sample to meet the time limit for this project. The small sized sample may have introduced biasness in the results obtained through this study.
Due to resources constraint it was not possible for the researcher to visit managers individually, so the interviews were conducted by using technology through Skype. Due to lack of face to face interactions, there may be some type of communication and comprehension fissures in the results obtained during this study.
2 Chapter 2- Literature Review
2.1 History and Introduction of Biofuels
There has been a lot of study on technical aspects of energy plagiarized from biomass, both the biofuel and biodiesel; examples include the studies conducted by Faaij, (2006), Ryan et al., (2006) and Goldemberg and Teixeira, (2004). Two main classes of biofuels are bio ethanol and biodiesel. Biofuels are classified into first and second generation on the basis of the source of fabrication.
2.2 First Generation of Biofuels
According to the studies carried out by Van Der Laaaka et al., (2007) regarding the sources of production of bio ethanol, it has come into sight as the chief candidate for replacement of gasoline to be used in transportation vehicles. The sources of its fabrication are usually the food crops, examples include sugarcane, corn, and sorghum; sugar beet and wheat are also being used in some countries for the bio ethanol production. They concluded that biofuel can be synthesized by using crops other than food crops; it is more advantageous alternative than food crops and their residues.
There is a serious concern that the first generation biofuels are consuming the food sources that were mainly comestible in the past. It was revealed by McCormick-Brennan et al, (2007) that the most serious concern related to the first generation biofuels is the inefficiency, this concern requires the use of different production technologies and use of energy efficient crops for the synthesis of these fuels. The entire ranges of first generation processes for synthesize of biofuels from the corn and wheat depends upon the starch content of the kernels of these crops.
In case of sugar cane and sugar beet the quality of biofuel depends on the sucrose content of the two. The rest of the substances preset in these crops are wasted after their use for the production of biofuels. Some production units are also using seeds of different crops for the extraction of the vegetable oil that is in turn used for the production of the biodiesel. The efficiency of biofuels is also questioned by Van Der Laaka et al., (2007).
Both the above mentioned researches have considered inefficiency of the biofuels as a drawback that makes them unfit as a replacement for biofuels. The expenditure of energy is more than the output obtained in the form of biodiesel or bio ethanol. The expenditure of energy starts right from the cultivation of the crops and energy is consumed in reaping and dispensation of the biomass. The portion of energy that is used in the processing units is small as compared to the energy used in the production of the biomass. Both the researches have yielded similar results but the Van Der Laaka et al., (2007) have discussed several reasons for the inefficiency of first generation biofuels.
The studies on biofuels by McLaren, (2005) publicized that the inefficiency problem may be assuaged by biotechnological research on biofuels. Researches on biotechnological aspects of the corn and it genetic management in USA have resulted in considerable enhancement of the biofuel yields. The researcher also concluded that further gene manipulation of these crops can increase the production of biofuels with the passage of time.
The comparison of the above three researches show that despite exertions in the production and efficiency of biofuels, these fuels are highly regarded as the alternate for fossil fuels that are believed to run out in the near future. The technology and new production techniques can bring innovation in the production technology of crops and manufacturing of the biofuels to make it more profitable for business organizations as well as the consumers.
2.3 Second generation of biofuels
Due to food security concerns the trend of biofuel production shifted from food crops to feed stocks that are not conventionally used as food sources. The development of second generation biofuels has expunged the peril of famines in emergent countries. Secondly it has also expunged the risk of rise in food prices due to their augmented use in the biofuel industry in India. There are copious other merits that are associated with production as well as exploitation of second generation biofuels.
Deurwaader (2005) conducted investigation on environmental hazards of biofuels and discovered that they produce less green house gases and are friendlier as compared to the first generation of biofuels. About the advantages and future prospect of biofuels Detchon et al., (2005) argues that these fuels will be produced at lessened costs with the passage of time and introduction of new technologies and crops for their production. Abundance of choices in feed stock crops is also an important benefit of second generation of these fuels.
The waste of fiber associated with the first generation of these fuels is reduced to great extent due to utilization of vast variety of feedstock crops and development of second generation fabrication processes.
Novel modes of biofuel production include two different processes, one is the conversion of cellulose into bioethanol that is investigated for efficiency and cost effectiveness by Foyle et al., (2006) and second process is studied by Von Blottnitz and Curran (2007). The ultimate product in the first process is known as lignocellulosic bio-ethanol. The second process is more complicated and requires more energy for its completion, it involves the use of heat for the decomposition of the organic material without in anaerobic conditions and without involving any other chemical reagent, this results in the conversion of organic materials into biofuel in liquid form or syngas.
Chemically this process is known as anhydrous pyrolysis, the liquid bio oil or biofuel produced during anhydrous pyrolysis is unfit for use in transport vehicles. Therefore it is used for the production of electricity in thermal power plants. Syngas on the other hand is manipulated to produce different types of biofuels that are used in transport vehicles as a replacement for conventional fuels.
These novel procedures and processes have made it possible to use feed stock crops in the biofuel fabrication and have eliminated the essentiality of food crops to be used for this purpose. The argument of Wright, (2006) explains this situation in other words with same outcome. He reached a conclusion that the above mentioned two processes can give biofuels with all types of plants; the first process has more choices in this regard as it can utilize plant debris, wood, leaves and residues of crop plants. Furthermore, this process can utilize waste of agricultural products used in industry such as sugarcane baggase from sugar industry and sawdust from the timber mills.
The evidence in the literature shows that the second generation biofuels are more advantageous and have overcome most of the shortcomings in the first generation biofuels that were criticized for the consumption of food crops and less efficiency as compared to the fossil fuels. There are also great chances of improvement in the energy efficiency with the use of biotechnological research on the crops used and technological research on the generation processes.
The genetics of the feedstock plants can be manipulated to increase the starch content in order to avoid wastage of biomass on large scale. Business strategies can be devised for the efficient production of biofuels to earn more profit and to enhance the consumption of these fuels on domestic as well as commercial level. The second process for biofuel generation, pyrolysis, can utilize almost all types of plants and agricultural wastes obtained from sugar as well as other industries.
Transportation fuel in liquid form synthesized from residues of plants and animal is known as biofuel and is utilized in light and heavy road transport, trains and air transport (Schnepf, 2007). All the countries of the world have highly relied on the fossil fuels in the recent history. There are different environmental issues related to fossil fuels, the economic issues and fulfillment of future energy needs of the different developed and developing countries have forced them to look for non conventional sources of energy such biofuels (Farrel, et al., 2006). The synthesis of biofuel can be carried out by using diverse group of crops and this cosmic choice has enabled different countries to espouse diverse approach for the synthesis of this fuel on industrial scale.
Different countries use different crops for biofuel that are predominantly sown in these countries. Klein and LeRoy (2007) illustrated that production of biofuels had been on the rise since 2000 and it had almost doubled in five years. It was also demonstrated that biofuels were providing more than 3% of the total transportation fuel all around the globe (Fig 1).
According to a report published by planning commission India (2003); Indian government has set a goal to achieve 20 % exploitation of biofuel in transportation rather than total reliance on petroleum oils. It shows the apprehension of the government for the establishment of biofuel industry in India. The biofuels are well thought-out to be environment friendly. According to a report published by United States department of energy (2007), biofuel does not spoil the environment and is not accountable for the increase in the carbon dioxide in atmosphere because plants grown for the purpose of fuel production utilize the carbon dioxide oxide produced due to the consumption of these fuels. So, it is helpful in reducing the green house effect, the biofuel industry can help to trim down unemployment by creating opportunities for the rural areas. The institution of this industry can help to augment the per capita income, development of road and rail network in bucolic areas and employment opportunities.
2.4 Implications in Biofuel Industry
Certain limitations are associated with the biofuels due to some technological implications. The recent development in automobile and transport industry militates against biofuels if seen from the worldwide business approach. International transport business, especially the civil aviation, is using engines based on turbofan technology that require exclusively refined kerosene oil for greater efficiency. This is the greatest technological implication for biofuel industry because almost all the aircrafts across the world would not be able to utilize biofuels as source of energy (Alvarez et al., n. d).
Alvarez et al., has reported that only aircrafts that would be able to use biofuels in their present state include General Aviation airplanes. The research on synthetic kerosene for the domestic and international transport was conducted by Green, (2002); he reported that synthetic kerosene would become available in near future that could be used in the turbine engines. Syngas can become a major source of synthetic kerosene oil that can be used in the aircrafts as well. Loop and Stanley, (1995) reported the use of blended biodiesel in air crafts using turbine engines on trial bases.
Further studies are may pave the way for the biofuels to be used in air transport, Although there are certain limitations of biofuels in aircrafts yet they have a wide scope to be used as an alternate for blended petroleum replacement in domestic transport and vehicles like motor bikes, cars, trucks and for other domestic purposes. The availability of biomass and biofuels is in large deficit and it cannot fulfill the ever increasing demand of energy in India as well as throughout the developing world.
There is clear evidence that biofuels cannot take the place of petroleum oils on equal basis, however it can replace them to some extent. The present system of biofuel industry is not capable of providing sufficient biofuels to meet the energy needs of the developing world including India, China and Brazil. The demand for fossil fuels may not decrease but the demand for biofuels is likely to increase many fold in India (Giampietro and Ulgiati, 2005).
A lot of investment is required in this sector to boost it up and meet the national energy policies of India; it can be assessed by the results found by Von Lampe (2005) who estimated the investment required to enhance the biofuel production in USA and Canada. For the replacement of only 10% of the fossil fuels with the biofuels in domestic transport, about 30 to 40 percent of the crop area is required. These results show that the land and capital required for the biofuel production needs to be increased to a large extent.
The increase in the biofuel industry will ultimately lead to the increase in the crop area and production. This in turn will necessitate vast land and large volume of water to produce the biomass required for the biofuel industry (Patzek et al., 2005). To form a profitable business strategy, different crops have different efficiencies in terms of production of biofuels. Henke et al., (2005) conducted studies on efficiencies of different crop residues for biofuel production and found that sugar beet is most efficient while wheat is the least efficient crop in terms of biofuel generation. Sugar beet is cultivated on large scale in India for sugar industry and its residues are readily available in the market. We can say that there are several factors that require keen considerations if we want to develop a profitable business strategy for biofuel industry in India. Some of these include the availability of crops that are efficient in biofuel production, land requirements, location of the production plants, energy policies of government etc. In the following section the current situation of the biofuels in India is overviewed from the literature available.
2.5 Current Situation of Biofuels in India
The results obtained from the studies conducted by Gonsalves (2006) showed that India stands sixth in the energy requirements among all the countries of the world. This country required 3. 5 % of the total energy needs of the world in 2001. As far as the use of raw biomass to obtain energy in rural energy is concerned, fuel wood fulfills more than 75% of the energy requirements in domestic sector (Ramachandra et al., 2004). More than 90% of the energy needs of the country are fulfilled by the crude petroleum oil. Most of the oil is imported from different countries of the world.
The data related to petroleum oil imports of India shows that there will be an approximate increase of 6% per annum in these imports, these imports were of 98.26 million tones (MT) in 2005 and it is estimated to reach 166 MT and 622 MT by 2019 and 2047 respectively (GTZ, 2005).
There is acute need for the development of biofuel industry because the fossil fuel resources of the world are reducing rapidly. The fate of these fuels is extinction in near future; therefore to meet the energy requirements of the country it is essential to develop alternate sources of energy which is currently biofuel in India as well as throughout the world (Gonsalves, 2006). For the time being, development of biofuel industry can help the country to reduce its dependence on the non renewable energy resources, it will also help to reduce the imports and save foreign exchange that will ultimately affect the economic conditions of the country positively.
The development of biofuel industry can diminish the reliance on the foreign resources of energy and can help to convene the energy rations of cultivation, manufacturing and domestic uses in pastoral as well as metropolitan areas of the country. Government of India had made it mandatory to achieve at least 5 % blending of ethanol till the end of 2006. The long term plan was to enhance the replacement of diesel with biofuels and biodiesel up to 20 % till 2012 (Gonsalves, 2006). India is a large market and current biofuel industry is utilizing feed stocks including molasses that is the raw material obtained during the fermentation of the sugarcane in sugar industry, some units are also sing tropical sugar beet to produce ethanol. Intensive studies are underway on the use of Jatropha as a resource for biodiesel generation on commercial basis in the country. Jatropha is a non edible oil seed crop that is cultivated abundantly in India. The next section of this chapter will analyze the current forms of bio energy being used in India and future energy constraints.
2.6 Current Bio-energy forms in India
2.6.1 Production of Ethanol in India
India's biofuel industry is currently producing ethanol by fermentation of a by product of sugar industry called molasses. Tewaria et al. (2007) found that the conversion efficiency of current manufacturing methods of ethanol in India is 6 - 8 % only, carbon dioxide; a very important green house gas is also emitted during the fermentation of molasses. The remaining dilute molasses is utilized in producing more than 90 % pure alcohol.
For the successful production of biofuels, the availability of raw material is very important factor. According to results found by Gonsalves (2006), actual yield of sugarcane is different for different regions. The yield is 77 tonnes/ ha and 53 tonnes/ha for tropical and subtropical provinces respectively. The energy efficiency of sugarcane is deeply studied due to intensive utilisation of molasses in the preparation of ethanol. Careful studies carried out by Gonslaves (2006) reported that the production of sugar from one tonne of sugarcane was 105 kg and molasses produced from this quantity was 40 kg. This 40 Kg molasses out of one tonne sugarcane can be yields 10 litres of ethanol only. From business point of view this efficiency is very important to assess the cost of production for ethanol in India.
It is also important to note that all the cane is not utilized for sugar production; only 60 % of the total cultivated sugarcane reaches sugar industry while more than 30 % is utilized for the production of artificial sweeteners. The remaining yield of sugarcane conserved as seed for the next crop. Molasses is available in abundant supplies due to large scale production of sugar in the country and it is being used as a major raw material of biofuel industry. The same studies by Gonsalves (2006) revealed that if the entire sugarcane plant is used as biomass in biofuel industry it may yield up to 70 litres of biofuel from one tonne of sugarcane plant.
Indian biofuel industry is producing very low yield of ethanol and biodiesel due to sole dependence on the sugarcane crop and molasses. The use of sugarcane molasses is a limiting factor in the efficiency of biofuels in India. The chief reason for this inefficiency is the resource intensive nature of sugarcane crop; it requires a lot of energy input in the form of nutrients, insecticides, and more water than other food as well as feed stock crops. Another disadvantage is the long growing period of crop extended up to twelve to thirteen months. According to report published by GPZ (2007), two best alternatives for the sugarcane that are available in Include the sorghum and sugar beet which require less energy inputs and growing period while provide large amount of biomass for the efficient generation of biofuels.
A comparison of the aforementioned three crops shows that sugar beet and tropical sorghum has clear advantage over sugarcane crop. These crops have the property of drought tolerance along with less resource utilization, moreover the harvesting process is very simple fir these two when compared with the sugarcane. The tropical sorghum has a very short life cycle and it can be grown two times per annum as compared to the one crop of sugarcane (Gonsalves, 2006).
The use of Jatropha is said to be more advantageous than the sugar beet and sorghum but the studies are under their way on this crop and its advantages. Studies on Jatropha illustrated that its seed can yield considerable amount of biofuel and its production is about one tonne per ha in terms of seeds (Table 2).
Table 2: Production of biodiesel from different yields of seeds of Jatropha (Source: GTZ, 2005)
The development of the profitable business strategy does require serious considerations for the selection of raw material in the country. To increase the efficiency of the biofuel generation processes, it is important to establish the manufacturing plants in the areas where the raw materials are present abundantly and easily. There is acute requirement for the conduction of research on the new methodologies for the production of biofuels that are more efficient so that the prices of the biodiesel and ethanol can compete with the fossil fuels in terms of price.
2.7 Biodiesel Production in India
Research conducted by Gonsalves (2006) revealed that the demand for diesel is five times higher than the petroleum oils in India. Biodiesel industry is still nascent as compared to the ethanol production. The production of biodiesel is conducted through trans-esterification of oils obtained from the biomass especially the vegetable oils. The process is carried out in the presence of an alcohol and its products are biodiesel and glycerol. Vegetable oil is also imported to meet needs because the domestic products cannot meet the total demand of the country.
The novel strategy for biodiesel production and expansion of biofuel industry in India is to use non edible crop called Jatropha, the seeds of these plants are being used for the production of biodiesel on commercial scale. It is a feedstock that can be cultivated with very low amount of water and fertilizers, the seed weight and seed yield is very high and it oil content is not edible for the cattle (Gonsalves, 2006). The development of the manufacturing process of biodiesel from the free fatty acids with low molecular weight has made it possible for the new firms to enter the biofuel market with this technology and to earn maximum profit.
The main challenge faced by the Indian biofuel industry is the conversion of low molecular weight Jatropha with low free fatty acids (GPZ, 2007). Indian government is striving hard to incorporate biofuels into its present energy requirements, its rural development wing has started a national biodiesel program to include the uncultivated land in the production of Jatropha, and the wastelands of rural areas will be brought under Jatropha plantations. The studies on the yield of the Jatropha seed have revealed that it's per hectare production are one to five tonnes and its ultimate yield is 0.2 to 1.1 tonnes. The yields are calculated with the help of the demonstration plantations of Jatropha in the wastelands as well as the individual plants (GTZ, 2005).
These studies clearly show that the biofuel industry in India is evolving with the passage of time and its production is increasing with the passage of time. The research on different biomass resources has provided the industry with multiple options for the raw material. The market is set for the new firms to enter because the old firms are using inefficient resources of biomass that consume more energy and give less output. Furthermore, glycerol, the by product of this process is of great industrial importance. Glycerol is utilized for the manufacturing of cosmetics, bio surfactants, soaps etc; it is the chief by product in the preparation of biodiesel from Low free fats substances such as Jatropha. The amount of glycerol produced is 12 % of the total production of biofuels (Gonsalves, 2006).
The current trends in the Indian biofuels are the utilization of Jatropha seeds in the production of the biodiesel and ethanol, biotechnological research has been involved in finding the manufacturing processes of biodiesel and ethanol from Jatropha.
2.8 Overview of Biofuel industry and biofuel requirement in India
This section contains the analysis of the biofuel industry of India and eventual biofuel requirements. Tewaria et al. (2007) has thrown light on the present size of the biodiesel and ethanol production plants in the country. More than 300 plants for the distillation of alcohol are present in the sugarcane growing areas of the country. These plants produced about 822 million litres of biofuel in the fiscal year 2006 - 2007 (Table III).
Table III: An overview of production of alcohol in India from 1989 to 2007 in ML (Source: Ethanol India, 2007)
The demand for petroleum oils will reach 17. 5 billion litres in India till 2012, according to GTZ (2005) government has planned a five percent blend of biodiesel to the gasoline till this period. This will amount to almost 800 million litres, diesel consumption in transport industry has jumped manifold since 2003, and more than 60 % of the diesel is utilized in domestic transport, agriculture and industrial sector (GZT, 2005). The requirement of diesel is expected to hike in the near future due to economic development in India, therefore government is determined to lessen the dependence on the fossil fuels by developing biodiesel and other renewable sources of energy. Table IV shows assessment of future requirements of diesel in the future with different combinations of bio as well as crude diesel.
Table IV: Comparison of Diesel Demand and Biodiesel Production in MT in India (Source: GTZ, 2005)
The target of 20% blending of biofuels to meet the existing requirements and reduce the reliance on the imported petroleum oil by the Planning Commission, India requires more than 13 MT biodiesel to accomplish this plan.
Although ethanol is commercially available in India yet the biodiesel is still unavailable on commercial scale and it is being manufactured in laboratories and pilot scale projects. Extensive plantation of Jatropha is required to meet the set goals till 2012.
2.9 Biofuels and Environment
The ethical issues related to biofuel industry are extensively debated; production of biofuels and their use at commercial level have their negative as well as positive affects on the environment. The issues like conversion efficiency, emission of greenhouse gases and land requirements are of great importance.
2.10 Conversion Efficiency
Conversion efficiency of the biofuels is under a lot of debate, a huge amount of energy and effort is required to grow crops and yield ethanol and biodiesel from them. Hill et al., (2006) investigated the conversion efficiency of these fuels and reported that the input energies include machine and fuel energy, fertilizers, irrigation, harvesting equipment, transportation of the crop to the distilleries, the input required to obtain lands, buildings for installation of distilling plants and fermentation processes.
The investigative studies of Hammerschlag (2006) elaborated the input energy further; he reported that the inputs like fertilizers and insecticides are energy intensive products; fertilizers involve the use of methane gas in their production and are considered energy extensive products. It is claimed that the biofuels are driving farmers to use more and more pesticides and fertilizers to obtain maximum yields; it is causing a negative impact on the environment causing soil and air pollution. Crops being used for the production of biofuels fetch higher prices in the market; therefore the farmers are cultivating more feedstock crops leaving the food crops. There is a visible decrease in the area covered by food crops and area for feed stocks and other biomass providing crops is on the rise.
Research conducted by Klein and LeRoy (2007) has reported soil erosion as an ultimate result of the intensive cropping. Experts have developed life cycle energy balance to estimate the energy efficiency and environmental impacts of biofuels. The emission of greenhouse gases especially the carbon dioxide is thought to be associated with the biofuels but a recent report published by USA department of energy (2007) has revealed that these fuels cannot be held responsible for the increase in the greenhouse gas emissions, it is a fact that the burning of biofuels produces a large amount of carbon dioxide but the crops grown to obtain biomass for this industry neutralize this emission by absorbing carbon dioxide for photosynthesis.
2.10.1 Reduced Greenhouse Gas Emissions
It is evident from the studies conducted by Smekens and van der Zwaan (2006) that conventional fuels are responsible for increased emissions of green house gases and are responsible for global warming to some extent. The future prospects of global warming and green hose gas emissions were studied by Kohler (2006), he reported that some major developing countries such as China, Brazil and India will cause immense increase in the green house gas emissions due to rapid increase in population and transport requirements.
A recent report published by IEA (2005) has emphasized the importance of biofuels as the first alternate for conventional fuels to be used in transport, these are renewable energy resources. Ethanol and biodiesel both have very low green house gas emissions as compared to fossil fuels; the reduced emission of green house gases is considered as an incentive to increase reliance on the biofuels.
2.11 Factors responsible for promotion of biofuel policies
There are numerous factors that are driving governments to formulate policies for the promotion and development of biofuels and biofuel industry. A report published by UK department of Transport (2004) states, “The benefits [of biofuels] include greenhouse gas reductions which will contribute to domestic and international targets, potential air quality benefits (albeit limited), the diversification of the fuel sector and an additional market for agricultural products.” To sum up we can say that the most influential factors for the promotion of biofuel policies include adverse changes in the climate due to continuous use of fossil fuels, enhancement of the agricultural industry thus producing employment opportunities in the rural areas, self reliance in terms of energy requirements of the country and utilization of the resources of the country to yield maximum benefits. There are numerous socioeconomic benefits associated with the use of biofuels and comparatively they also have positive effect on the environment than conventional fuels (Faaij, 2006).
2.12 A solution to the Energy Security Concerns
Romm (2006) asserted that more than 97 % of the energy requirement so transport is fulfilled by organic or carbon based fuels; the energy security of the world is at stake since more than half of the crude petroleum reservoirs have been emptied. The ultimate fate of the conventional fuels is the extinction but the date of extinction is controversial. As pointed out by Sharpe and Hodgson (2006), the extinction of energy may lead to extinction of lie in the long run. The extinction of this cheap source of energy may raise tension between different countries of the world.
There is lack of investigation on the accurate assessment of future energy requirements of the world (Campbell, 2006; Greene et al., 2006). Mazurek (2005) pointed out that energy security of a country is intimately associated with national security; biofuels can act as a tool to deal with the energy concerns. Undoubtedly the non renewable resources like fossil fuels will not accompany man too far (Hallock et al., 2004).
The aforementioned facts have compelled governments to investigate different methods for replacing non renewable resources to renewable resources especially biofuels. The lenient policies and incentives are being given by governments for the development of biofuel industry. India's national security also requires the government to take initiatives
2.13 Future resources and Policies
Pahl (2005) pointed out the impact of development of biofuel industry will ease the transition from the fossil fuels to carbon based fuels. This industry can be established by utilizing the existing infrastructure and transport systems to some extent (Foresight Vehicle, 2004). The growth of this industry depends on growing Jatropha or other potential crops on vast land to meet the needs of emerging firms in this sector. The replacement of conventional fuels with the biofuels may take long time due to lack of technology in this industry (Foresight, 2006).
Most of the biofuel production units are utilizing sugarcane molasses for biodeisel and ethanol production that is inefficient as compared to the sorghum and sugar beet, Jatropha is even more efficient than these two crops and it has high energy conversion ratio. Biomass can also be subjected to certain chemical processes to produce hydrogen gas which in turn can be utilized to manufacture hydrogen cells that can serve as a replacement of conventional fuels (Ramesohl and Merten, 2006).
The feasibility of the different methods of generation of biofuels that are based on biotechnological research requires ten to fifteen years to become applicable on commercial scale (Romm, 2006). These researches show that it will take biofuels considerable time to become the efficient and easily available source of energy and a replacement for fossil fuels. The development of a profitable strategy can mollify this process and reduce the time required for the 50 % replacement of the conventional fuels. India is lacking a comprehensive strategy for biofuel industry that can attract the investors; different firms that are working in the field are unable to cope with the ever increasing demand of energy in this second most populous country and emerging economy of the world.
The literature available about the biofuels and biofuel industry, its development in India and future prospects of biofuels clearly suggest that the biofuels are the first and foremost replacement of conventional fuels. Fossil fuels are classified as non renewable energy resources and more than half of the reservoirs of this largest source of energy have been exhausted by man. Energy requirements of India are increasing with the passage of time and it will become difficult for the country to keep its energy security intact if other energy sources are not promoted. The government of India has formulated policies for the rapid growth of biofuel industry in different areas where biomass is easily available.
There is a wide breach between the demand and supply of biofuels in India and its biodiesel industry is still nascent. A lot of crops are available that can be used as source of biomass with different energy conversion efficiencies. The market is imperfect as far as biofuel industry is concerned and new firms can enter this market to earn more than normal profit.
Keeping in view the present scenario of biofuel industry in India, the development of a profitable business strategy will prove as an incentive for the new firm to enter the market and expand this industry. It will take long time to fill the gap between the demand and supply of biodiesel for transport industry; the literature shows that biofuels are potential alternatives for fossil fuels but they will take a long time to gain this position.
3 Chapter 3- Research Methodology
3.1 What is Research Methodology?
Research methodology may be comprehended as the mode of conduction of research according to the subscribed research beliefs, the type of strategy employed in research, different tools and mechanisms utilized or the research strategy developed in light of the previous research and literature available in order to obtain the specified goals and objectives and to answer the research questions. The purpose of current study, in the form of research questions, has been explained in first chapter of this dissertation. This chapter aims to:
- Discuss different methodologies for research and compare and contrast these strategies with the one we have opted for this research
- Discuss in detail the research strategy adopted for the current study and research methodology used
- Discuss different sampling techniques and tools that have been utilized to achieve aims and objectives of this study
3.2 Introduction to Different Research Philosophies
The techniques and beliefs about data collection, data analysis and utilization of data in a certain experiment are known as research philosophies. The philosophies of research or approaches of research are broadly described by epistemology, renowned and accepted truth, and doxology, observations of facts that are believed to be true. We can say that research is a technique or method to convert doxology into epistemology, this phenomenon is sometimes referred to as scientific method. Positivism and anti-positivism (interpretivism) are two most important research philosophies or approaches (Galliers, 1991).
3.2.1 Introduction to Positivism
Levin (1988) explained the view point of positivists, they believe that veracity is durable enough to be observed and explained with a purposeful approach and it does not require the observer to hamper the phenomenon under study. Any system or phenomenon under study should be and believed to be isolated from the surrounding and others can repeat the observations for this phenomenon. Positivists often study the realities by varying only one independent variable to study the effects of this variable on the overall phenomenon. It helps to identify various regularities and form associations between different variables. Previous observations are utilized to make different predictions; this phenomenon has a vast background.
Hirschheim (1985) stated, “It is so embedded in our society that knowledge claims not grounded in positivist thought are simply dismissed as scientific and therefore invalid.”
The above given statement was completely agreed upon by Alavi and Carlson (1992). They conducted a review of more than 900 hundred researches and found that positivism was the theme of all empirical studies; moreover it was found that this phenomenon has a strong association with natural as well as physical sciences. It was argued by Hirschheim (1985) that positivism is most suitable for the studies conducted in social sciences. We will not further elaborate this philosophy but it is noteworthy that business and management are considered as social sciences because they have little association with the physical sciences. The positivistic research philosophy is suitable for the present research in the context of above discussion.
3.2.2 Epigrammatic Introduction to Interpretivism
Understanding a reality is the two way approach, it involves skewed explanation as well as interference into the natural phenomenon, and this view point is called interpretivism. Interpretivists believe that it is crucial to study the phenomenon in a natural environment but there are many factors which are inevitably affected by the researchers and thus they interfere with the phenomenon.
Reality can be interpreted in numerous ways but all the interpretations about a natural phenomenon are part and parcel of scientific knowledge. Like positivism, interpretivism also has a long and glorious history.
3.3 Research Design and Process
The foremost step in research process is to formulate research question or questions based on the ideas about certain phenomena, discussion with colleagues and experts in the relevant field should be conducted. In the present study the research questions were formulated about the formulation of profitable business strategy for industry of biofuels in India. These questions were made after thorough discussion with the experts of business management and other relevant people.
The next step in this process is to review the literature. It is important to find starting point for review of literature, libraries and online resources are the best sources of literature. The relevant literature should be collected that can support the research questions and may help in the validation of the results obtained during study. For this dissertation it was tried to include the latest available literature because it is a technology based study.
Third phase of the research process is to develop design for the research; this is accomplished by utilizing the literature available or by innovation, creating your own methodology according to prevailing conditions. This study revolves round the biofuel industry in India; the positivistic approach was utilized to develop the research design. On the basis of the above given steps, the next step is to formulate the proposal of the study.
Research was designed in such a way to include maximum input from the producers and consumers of biofuels from India despite the time and resources constraints. A survey was conducted to gather information from the consumers about the use and advantages and availability of biofuels. It is required by every researcher to address all the ethical issues, in this study the data obtained from different managers about the market situation and production technologies used by different organizations were not revealed to any other person except the research.
Data collection and analysis are the next steps in the research process, technology was utilized to interview the managers, and interviews were conducted online by utilizing Skype software. Emails were sent to the consumers to obtain the consumers point of view. Statistical data analysis was done with the help of SPSS, a data analyzer. Research has practical applications and recommendations for the investors and other stake holders were formulated on the basis of results obtained from this study. The findings of this study will be disseminated to the target people with the help of technology and publishing the work with the online journals.
Different research methods are utilized by the researchers; some examples are quantitative, qualitative, inductive, deductive, theoretical, empirical etc.
Quantitative methods of research allow the researcher to divide the research into smaller and measurable categories so that it can be used to almost all of the subjects or similar situations (Winter, 2000). According to Patton (2001), quantitative research methods entail the process of utilizing standard measures with an aim to fit different approaches and concepts of people into relatively smaller number of preset response categories, numbers are assigned to these categories. The qualitative research has been defined as complex of meanings, notions, characterizations, characteristics, symbols and portrayal of things (Berg, 2007).
The deductive approach of scientific research is believed to start with a summary or a coherent connection among diverse concepts and it moves to the tangible pragmatic evidence (Neuman, 1997). Saunders (2003) reported that deductive and inductive approaches for research are very commonly used and both comprise the activities like data collection, analysis and theory development, but in reverse order. Inductive approach develops a theory after collection and analysis of data. So the deductive approach is the best when a wealth of literature is available.
Positivism is another type of research techniques that is used while the question to be researched in about an already proven theory or hypothesis and researcher has to corroborate it (Clark, 2004). According to Saunders (2003), the positivism is commonly used in the research for natural sciences. It is used for the measurable and qualitative data that can be quantified and statistically analysed.
Empirical and theoretical research methods are also included in the research techniques. In this type of research methodology, data or empirical observations are collected by using different data collection techniques such as email and internet surveys and is utilized to answer a specific research question. This is the primary research method that is used in academic research but it is also useful in answering practical problems (Clark, 2004).
3.4 Methods of Data Collections
The research will be conducted about the overall economic condition of India during the last decade and the future needs of energy for the sustainable growth in the financial system of the country. This includes primary research for which data will be collected by conducting online vice/video interviews with the managers or directors of an Indian biofuel company. An email survey will be conducted to get primary data from the customers also. The secondary research will be made for the methodology to construct an ideal and profitable business strategy, the processes and steps involved in the construction of business strategy. The case studies for the development of business strategies for the biofuel industry from different developing countries are also a part of the secondary data research.
3.5 Data Collection
Review of ethanol production in India, stakeholders and availability of biofuel processing facilities. A survey was conducted to collect data about the present situation of energy requirements of the country, fuel prices of the country during the recent past and the prices of biofuel were obtained from the Federal Bureau of statistics. Moreover, the survey was conducted to acquire data about the contemporary business models that are being applied in the market by different local and multinational organizations. Two different questionnaires were requested to get information separately from the front line management of local as well as multinational organization and customers. Online interviews and email survey were conducted to collect data from managers of biofuel industry in India and customers respectively. Literature available online was also utilized in the research.
3.6 Data Recording
Based on the primary research, the online interviews were recorded digitally. These recording were transcribed on the questionnaires. The data collected from email survey of the customers was also processed into secondary data. This data and the data obtained from the literature review were in turn recorded on computer based programs such as Microsoft Excel and other data recording tools.
3.7 Adopted research methodology for this research
In the current study about the development of profitable business strategy for biofuel industry in India, the researcher used the qualitative research method and technique. This technique is the most suitable one to the research questions of this project. This approach is well suited to the study based on the email surveys and online interviews from the managers and the customers. Qualitative methods applied quite effortlessly in the factual world. The only problem with this type of research method is the lack of internal validity. The reasons for this shortcoming are the presence of substitute explanations of the results obtained after data analysis and want for of control. The problems posed in external validity include the case specificity of this research method, it is difficult to generalise the results for other countries with other situations and ground realities. All the research methods have one or the other shortcomings and it requires proper understanding of the research question to use the most suited research method.
3.8 Data Analysis Procedure
Analysis of data is a very important step towards the write up of the research and it entails proper skills and methodology. Analysis of data obtained through primary as well as secondary research was analysed in three different segments. The data collected through online video/voice interviews was analysed in the first stage, data obtained through email surveys from the customers was analysed in the next stage and finally the data obtained through literature review was analysed. The analysis was conducted with the help of statistical analysis tools i.e. SPSS. The analysis of all the parameters was done by using statistical models and statistical theories in light of the previous researches.
3.9 Resources used for the Research Analysis
The following resources were used for the analysis of data:
- Skype for conducting the online interviews
- Internet and mailing facility to conduct email survey of the customers
- Business Models and theories in the literature
- Statistical analysis tools, SPSS or Minitab for the analysis of data collected from the above given methods
Books and research papers related to the production of biofuels and the business strategies, especially the case studies of establishment and development of biofuel industry in developing countries and its performance.
3.10 Ethical issues
Biofuels are renewable energy resources and many ethical issues were identified in the research and from the literature review. First generation biofuels were considered as a threat to the food security of man due to consumption of food crops for fuel production. But the second generation of biofuels is produced with the help of biomass that is obtained from non food crops or feed stocks. There are concerns about the green house gas emissions from burning of these fuels but these are reported less harmful than fossil fuels that are currently being used for the transportations and other purposes including agriculture, industry etc.
Data collection was about the business strategies of different biofuel producers in India, the managers were assured that no data will be leaked out to other organizations except the researcher, it was also ensured that the data will be utilized for the analysis results will be disseminated, no data will be declared or publicised to keep the policies of different firms concealed from other producers.
ARTICLE IN PRESS
4 Chapter 4- Data Presentation and Analysis
4.1 Chapter Introduction
This chapter represents the analysis of the data gathered from by the researcher from the field to assess the current situation of biofuels in India as well as the future prospects and opportunities in this industry. The detailed and through data analysis will provide a keen insight into the biofuel industry of India and findings of the study are described and explained in a coherent progression in this chapter. This will help to formulate the recommendations for a profitable business strategy in Indian biofuel industry.
As was proposed in the study, the data was collected by two different methods. Similarly this chapter is also alienated into two distinct portions, first part contains the data collected with the help of the Skype interviews and it's in depth analysis while second part describes the data collected from email survey. At the end of this chapter, data obtained from literature review will be subjected to analysis. I have tried to represent the results of data analysis with the help of charts and graphs and tables to make it more understandable and convenient for the reader.
The purpose of the survey was to find the awareness about biofuels among the Indian customers, data collected from this survey was analyzed to find the level of awareness of consumers about the use and advantages of the biofuels as compared to the fossil fuels. The correspondents were also asked about the availability of the biofuels in their country so that a notion about gap between the supply and demand can be made. Data about the environmental issues related to the use of the biofuels was also analyzed to discuss the social issues. Data collected from email survey was subjected to analysis to find the preference of the consumers between petroleum diesel and biodiesel. The SWOT analysis of the Indian biofuel industry has been done to find its strengths and weaknesses as a whole.
The managers from three different biofuel manufacturers of India including BiofuelIndia, Sharonex Biodiesel - India, the largest biofuel providers in India and Biodiesel India were interviewed on voice free Skype software online. All the managers showed keen interest and provided detailed answers to the questions listed in questionnaire, some extra questions were also asked by the interviewer to decrease confusion in certain answers. All the managers were selected who have direct involvement in the financial matters of biofuel production and its technology, thus I made sure that the business side of the biofuel industry can be illustrated.
The questionnaire was structured in such a way so that the interviews can be completed in minimal time due to the business activities of the managers; it was also considered that enough time should be taken from the managers to obtain conclusive answers to all the questions. Average time for an interview ranged from 30 to 45 minutes, free voice Skype software was utilized to conduct interviews because of lack of time and resources that were required to go to India and visit each manger personally. The structure of the questionnaire was set in a logical manner, the questions started from the introduction of biofuel industry in India and then moved towards the different strategies adapted by the specific companies to earn maximum profit from ethanol and biodiesel production. The strategy related questions were asked and professional as well as managerial opinions of the mangers were sought. All the interviews were fully recorded to analyse the data at the end.
The second questionnaire with general question related to biofuels, their availability, prices, advantages and disadvantages, preference etc was structured. This questionnaire was used to conduct an email survey from the consumers of biofuels in India. The questionnaire was emailed to 500 target individuals, list of email addresses was obtained from the Sharonex Biodiesel - India industries with due acquiescence, target individuals were selected by randomization. The correspondents included females, students and self employed persons etc.
The response of the email survey was more than satisfactory; about 83 percent people responded to the researcher's emails and provided answers to all the questions in the questionnaire. Out of the total respondents 65 % were male and rest were females (Graph I). The reason for this difference lies in fact that more men have their own vehicles in India as compared to women. Moreover, there is also a difference in use of internet by males and females with males using more internet than females. The age of the respondents ranged from 25 to 50 years with 40 percent in the age of 35 to 50 percent and the remaining less than this age. .
Graph I - Gender ratio of correspondents of email survey
4.2 Analysis of Data Obtained from the Email Survey
4.2.1 Age Distribution of Participants in Email Survey
In answer to the second question that was about the age of the correspondents, the correspondents specified their ages from 25 to 50 years, Majority of the people who replied to the survey questionnaire were over 35 years of age as shown in the graph II.
Graph II - Age distribution of the respondents of email survey
4.2.2 Awareness and Usage of Biofuels
In answer to the question about the awareness and usage of biofuels as a replacement of traditional fuels i.e. petrol and diesel oil, 62.5 percent people replied that biofuels can flourish in India and can replace conventional fuels, the reason for this notion is the fact that India has an agricultural background and she has abudant fibre for the biofuel producers at very cheap rates. Almost 38 % correspondents answer this question in no.
Graph III - Awareness and Usage of biofuels among Correspondents of email survey.
On the question, how long they have been using biofuels in their vehicles?, 67.7 % correspondents replied that they were using biofuels from last 2 - 3 years while the rest had been using biofuels for more than five years. This ratio can be explained on the basis of the emergence of biofuels as replacement of conventional fuels due to the abrupt increase in the prices of fissile fuels. When asked, are biofuels easily available in India? 32. 4 percent people replied in yes and others replied in no. The location of the participant has a great deal of effect on the availability of fossil fuels.
4.2.3 Environmental safety and biofuels
The questionnaire for email survey was designed in such a way so as to know the environmental issues related to the biofuels and awareness of these issues among the customers. They were asked two different questions in this regard, first whether they know the advantages that biofuels have over the fossil fuels and the second was about environmental safety of the biofuels as compared to the fossil fuels. 63. 9 percent participants showed awareness about the relative environmental safety of biofuels as compared to the conventional fuels. Others were not aware of these advantages and they replied that they didn't know about the environmental advantages of biofuels.
When asked whether biofuels are cheaper than fossil fuels, about 92 percent participants replied in yes and other in no as shown in following graph.
Graph IV - Results of Price Comparison of bio and fossil fuels in India
4.3 Adoption of Biofuels in India
The participants were asked a question about the chances of development of the biofuels industry in India and their willingness to join this industry. The answers obtained from the participants show that customers are hopeful about the bright future of this industry in India, 99 % of the participants replied in yes in answer to question whether biofuel industry can thrive in developing countries like India. This shows a great deal about the gap between the supply and demand of biofuels in the country, this breach stimulated the customers to predict a bright future for this industry in India.
4.4 Data collected from Skype Interviews and Data Analysis
The questionnaire structured for the Skype interviews with the managers of different firms in biofuel industry of India included different questions to examine the current strategies of these companies for biofuel production in India and future prospects of this industry. The first question asked from each manager was whether they are satisfied with the current situation of biofuel industry and business strategy of their respective firms.
43. 5 % of the managers told that they were satisfied with the present condition of the industry as well as the current business strategy of their firm. They were of the view that the firms are utilizing the cheapest and easily available biomass i.e. molasses from sugar industry. This raw material abundantly available in India due to well established sugar industry. Managers from Sharonex Biodiesel - India industries that is one of the most important supplier of the biodiesel in India also deemed the current strategy as the most suitable because of the availability of synthesizing machinery in the country, technology for the production of biofuels from molasses is easily available and most of the firms have this technology, although new technologies have emerged with the passage of time but it will take some time for the establishment of these technologies in India.
Biofuel has steadily attained its place in the fuel market of India and has become preferable as compared to the fossil fuels due to their low prices and low emission of green house gases. Marketing has played significant role in the popularity of biofuels in India, especially after the energy policy (2004) when it was decided that the biofuels will be incorporated into the imported petroleum oils to reduce the dependence on fossil fuels and increase the energy security of the country.
4.4.1 Data analysis of current strategies of biofuel industry
Other 56.5 % managers were of the view that the current strategy for the biofuel production should be reviewed and new biomass sources should be utilized for this purpose which has more energy conversion efficiency as compared to the molasses as discussed in the literature review chapter. These managers emphasized that biofuel industry should adapt innovations to increase biofuel production and meet the target set by the government of India for the incorporation of the biofuels in the transport industry up to 20 %. Firms can increase their profit and reduce the dependence on the sugarcane molasses by using new sources of biomass such as Jatropha seeds for the biodiesel production.
4.4.2 Analysis of data regarding business strategies in different countries
Answering the question about the strategies adapted in different countries of the world, the managers were of the view that several biomass sources can be used for ethanol and biodiesel production. Each country utilizes the crop that is abundantly grown in that country, a lot depends on the biotic and a-biotic factors also. For example sugarcane is abundantly cultivated in India for the sugar industry, thus it is utilized for the biofuel production while maize is abundantly cultivated in USA, and so the US biofuel industry utilizes maize as biomass for the production of ethanol and biodiesel.
As far as the availability of the different crops are concerned, the analysis of the data obtained during interviews show that sugarcane is the cheapest and most abundantly available crop for this purpose, sugar beet being the second and maize and sorghum are ranked third, Jatropha plantation is being encouraged by the government on waste lands to enhance its production and make it favourable for the synthesis of both first generation and second generation biofuels.
4.5 Analysis of data collected through literature review
In this section a few points will be analysed in light of the above analysis and literature review section because most of the literature reviewed has been analyzed in chapter 2. Literature review clearly shows that India's biofuel industry is in need to revise its business strategy for the enhanced production of biofuels, especially the use of Jatropha seeds for the synthesis of biodiesel is emphasized in the literature reviewed during this research and cited in the literature review section.
Studies also show that energy conversion rate of Jatropha seeds is much higher than the molasses; government of India is taking serious steps to increase the plantation of Jatropha in the wastelands so that biofuel industry can be helped in this transition from sugarcane molasses to the Jatropha seeds. Although Jatropha has higher energy conversion ratio yet it has some limitations. For example its cultivation on common waste lands is reducing the lands for the agricultural and food crops; moreover its leaves cannot be utilized as fodder for cattle.
4.6 SWOT Analysis of Biofuel Industry in India
SWOT analysis has gained a lot of importance in business and strategic management, a SWOT analysis of Indian biofuel industry was conducted to find its strengths, weaknesses, opportunities and threats to this industry in the future.
5 Chapter 5- Results and Discussions
Converting this research project into the dissertations has been very challenging for me since the start of this research. This research aimed at achieving measurable objectives through empirical research. Empirical research was conducted to amass data required to obtain set aims and objectives. Enough data was gathered to critically analyse the current situation of biofuel industry in India and devise profitable business strategy.
5.1 Current Situation in Biofuel industry of India
The data analysis showed that the biofuel industry is at its nascent stage and biofuel industry is utilizing food crops like sugarcane, maize and sugar beet, these findings are in confirmation with the results obtained by Gonsalves (2006). Data obtained during the interviews from the managers was analysed and it was concluded that molasses obtained from sugar industry by the fermentation of sugarcane is the cheapest biomass available for the manufacturing biofuels including ethanol as well as biodiesel. These results are also supported by the findings of Gonsalves (2006) who concluded that the molasses is the chief source of biofuel production in India. Almost all the biofuel companies in India are utilizing molasses for ethanol production.
Interviews conducted on voice Skype free software were analyzed, 43.5 % of the managers were of the view that current strategy for biofuel production can be improved to make it more profitable instead of utilizing new crops or technology for this purpose. The reason for their insist on the current strategy was that the new technology would take a lot of input and time for its establishment and new crops like Jatropha seeds would require time for their extensive plantation on the waste lands. This will slow down the process of enhancing the biofuel production and blending of 20 bio-diesels in transportation will not be met till 2020.
Data analysis showed that better agricultural practices can help to decrease the cost of production of ethanol. By adopting enhanced agricultural practices for sugarcane crop, its yield can be increased to a great extent. Another method for profitable strategy is to make use of such methods of ethanol dehydration that are energy efficient, it will in turn decrease the cost of production and make the process more profitable. Two energy efficient methods mentioned by all the mangers (43.5 %) were membrane separation and pressure swing absorption technique.
Although India has made several changes in its energy policies regarding biofuel and ethanol production yet the results obtained show that government should reform its policies to slacken constraints on ethanol and bio diesel production. The same was stated by Gonsalves (2006) in his studies on the current strategies for biofuel product ion in India. But there is a great problem with this strategy because India stands first in the consumption sugar all round the globe. This suppresses the biofuel industry due to shortage of biomass for this industry.
Alternate feed stock crops suggested by the managers interviewed included sugar beet, sweet sorghum and maize, agricultural research has also listed these crops as more energy efficient than molasses. 53.5 % of the managers interviewed in the survey were of the view that new technology and crops should be utilized to lower the cost of production and increase the profit in biofuel industry. Biotechnological techniques should be utilized for ethanol and bio-diesel production, the enzymatic saccharification as well as fermentation are the techniques that enable the firms to utilize cellulose for the ethanol production.
These technologies can be used to produce first and second generation biofuels by utilizing the residues of food crops as well as feedstocks; wood can also be utilized for this purpose. The data analysis further concluded that India should trade in ethanol to boost its biofuel industry and meet its energy requirements, the policies should aim at spurring the domestic industry rather than protecting it.
All the managers (53.5 %) suggested Jatropha as the best alternate to molasses for profitable bio diesel and ethanol production. These findings are in confirmation with the findings of Siddharth and Sharma (2010), they found that biodiesel produced from Jatropha oil seeds can replace the fossil fuel diesel if grown on large scale and it is not a threat to the food sources as Jatropha is a large source of non edible oil in India.
First generation biofuels were discouraged largely on the basis that they were made from the edible oil resources due to which they were considered as a large threat for the food security of human beings as well as cattle.
Jatropha cultivation is being encouraged by the government; this will increase the biomass availability for the biofuel industry. Increase in the supply will affect the prices of the biomass and reduce them to make the production more profitable. It will help to increase the production of existing companies in biofuel industry and the introduction of new companies into the market to enhance the overall production of the industry. The firms should enter into this industry with the new technology i.e. Jatropha processing plants to obtain maximum production as well as profit.
Despite the utmost effort for collection of data to obtain the above discussed results, some time and resources constraints may have rendered these results some uncertainty. Interviews should have been conducted in direct meetings with the managers but time and limited resources did not allowed the researcher to conduct face to face interviews. The study could have been more extensive by taking large sample size but time was limited and only three companies were analyzed for this purpose.
Through this research, we have found that biofuel industry of India is largely dependent on the sugarcane molasses, Jatropha oil seeds are the best alternatives. New firms can utilize this crop to produce bio diesel and ethanol with reduced cost of production as compared to the sugarcane or sugarcane molasses. The dependence of only one crop is not logical for energy security as well as industry; new technologies should be adapted for the energy efficient ways of synthesizing biofuel energy.
6 Chapter 6- Conclusion and Recommendations
Biofuels are emerging source of energy and are thought to replace the existing non renewable sources of energy, it has become a huge industry in the developed and developing countries of the world especially USA, England, Brazil, China, India etc. The current study was aimed at the analysis of current situation of biofuel industry in India and development of profitable strategy for the existing and new firms in this industry. India is one of the largest consumers of energy in the world but more than 80 % of its energy requirements are fulfilled by the imported conventional fuels.
For the development of profitable business strategy the biofuel production technique of existing firms was studied by conducting an email survey and online interview with the help of voice Skype software, managers of the large biofuel producing companies were randomly selected for the interview and they were asked question about the present technology for the biofuel production, it was found that the whole industry is utilizing sugarcane or molasses, a by product of sugar industry. But the energy conversion efficiency of sugarcane and molasses is very less due to which per litre cost of production of ethanol as well as biodiesel is more and profit is less.
Among other crops that are potential source of biofuel are maize, sweet sorghum and tropical sugar beet, these crops are also cultivated on large scale in India for sugar production and as fodder for cattle. Studies on sugar beet have revealed that it has better energy conversion ability as compared to the sugarcane, sugarcane requires high amount of energy for its cultivation in the form of water, fertilizers, pesticides etc. Jatropha is another plant that can be cultivated for production of ethanol plus biodiesel. Different crops have their own merits and limitation for use in the biofuel industry.
The analysis of data collected during this study revealed that Jatropha should be used for the production of biofuel industry, the development of a strategy for such a huge industry require laborious and extensive data collection that should truly represent the whole industry and its business strategies, the business strategies vary from firm to firm and country to country. The time frame of the study did not allow the researcher to visit India and observe the ground realities of the biofuel industries and production technology installed in different firms.
Ultimately the whole data was taken on the basis of the email surveys and online interviews that may have caused some biasness or uncertainty in the results; moreover the literature review was done to elaborate the results for their validity, data obtained from literature was also analysed and compared with the results of the existing study to reduce uncertainty or biasness in the results.
Effect of marketing strategies on the demand of the biofuels can be studies further in order to enhance this researcher further. This researcher can also be expanded to other countries and some aspects like cost of production, marketing, supply, demand and availability of biofuel can be studies. As far as biofuel industry in India is concerned, awareness should be created among masses about biodiesel in order to maximize its demand and increase its use.
As the government is interested to increase the energy security of the country by blending biodiesel with conventional diesel in the transportation, it is also recommendable that new firm should enter the market and take advantage of the loosen policies in this sector. Private sector should also come forward and invest in the Jatropha cultivation to provide maximum biomass to the biofuel industry in order to minimize the cost of production and maximize the profit.
Research on other potential crops should be conducted in order to find the economics of ethanol and biodeisel production from these crops and ultimately finding the best source of biomass for the biofuel industry. Biotechnology should be utilized for improvement in the production technology for biodiesel. Ethanol production units are abundant in India but the biodiesel industry can be considered is nascent, investment in biodiesel industry can be more profitable than in the ethanol sector of this industry.
Business strategy for biofuel and ethanol should be separately studies in order to detailed business strategies, Jatropha seeds are utilized for the biodiesel but its leaves are not edible for human as well as the cattle. Studies should be conducted in order to find a good alternate of Jatropha and sugarcane; it is not wise for an industry to rely on single or two sources of biomass. Therefore, it is essential to make use of different crops according to the different areas, the location of the biofuel production units and abundant crops of that area.
The economics based studies on Jatropha, sweet sorghum and sugar beet should be conducted to find the most economical crop or combination of crops. With the passage of time, non renewable energy sources will decline in quantity that urges developmental plan for biofuel industry so that it can fulfil the energy shortage in the near future when the fossil fuels will be extinct.
Another important aspect of this industry is to study the economics of new production technologies for biofuel industry so that the process can be made more economical and profit can be increased. As the future prospects of biofuels are manifold, all these aspects and prospects related to management and production of these renewable resources should be studies extensively. Another aspect that can be further studied is the effectiveness of management in the biofuel industries in India. Biofuel industry has provided employment to local workers in the country side, this aspect can also be studied in order to know the effect of establishment of pests and what is the location of the pests in the field. In short the recent studies have shown new horizons in the biofuel industry of India.
6.1 Recommendation for the enhancement of Biofuel demand among Indian Consumers
In view of the analysis of the data obtained from the email survey and interviews conducted online, the following recommendations are given to enhance the biofuel demand in India.
The studies showed that number of people who are aware of the advantages of the biofuels and are using these fuels is very small, intensive advertisement is required to enhance the awareness among the people that will enhance the demand in turn. This end can be achieved by running multidimensional advertisement campaigns.
India is an emerging information technology hub and most of the people are well aware of the use of computers and internet, websites and homepages of the manufactures can be used for the advertisement of biofuels.
Blogs can be utilized for the advertisement and discussion about the different issues related to the use of biofuels among the consumers.
Apart from the above mentioned means, traditional and conventional advertisement campaigns can be utilized for this purpose. Print and electronic media in India is very strong and has a vast role in the developing the outlook of the masses about different products and issues. Especially the electronic media can help to enhance the demand to a great level.
The government of India has a plan to blend 20 % of the biodiesel in transportation fuels, this target can only be achieved by creating awareness among the people in the transport industry about the biofuels. For this purpose, the advertisement campaign should be devised with special focus on the transporters and transport industry.
The use of conventional fuels should be discouraged by highlighting the merits of the biofuels over the conventional fuels. These fuels are not carbon free but they do not contribute to global warming as much as the fossil fuels. This point should be focused in the advertisement campaigns; the production of the biofuels should be increased in order to decrease the dependence on fossil fuels.
The government should devise regularity policies for the use of biodiesel to transport industry and the stakeholders in this industry should be convinced to use biofuels. For this purpose the biofuel products may be subsidized to some extent to lower their prices further as compared to the conventional or fossil fuels.
6.2 Recommendations for the Improvement of Biofuel Business in India
For sustainable and successful production of biofuels and establishment of biofuel business in India the following recommendation are made.
The research on the different crops fro the production of biodiesel and ethanol is not adequate, it requires more input for the better and fast results for the success development of biofuel industry in India. So, the existing firms and government should enhance the investment on the research for the cheap and environment friendly biofuel production.
Sweet sorghum, Jatropha, sugar beet and pongamia should be focused for the production of biodiesel because the biodiesel production is very low in India. The research should be conducted on aforementioned crops to use them as biomass for the production of biofuels. This research should be participatory in nature i.e. it should involve all the stakeholders of this industry like businessmen, government, large and small scale farmers etc.
There are different varieties of the crops that give more yield than others, these varieties should be given more importance and should be encouraged to cultivate in specific areas with suitable climate for these crops.
An intensive study should be carried out to evaluate the yields of these crops at micro and macro level and to analyze the gains of small scale farmers and processors of these crops.
The crops that are used for edible oils and other food items such as sugarcane and molasses should not be utilized for biofuel production as it creates concerns about the food security of the man. Similarly the crops that are main sources of feed stocks should not be utilized in this industry because it will create competition and the raw material will become dare, this in turn will increase the prices of the biofuels as compared to the conventional fuels.
The government should take steps to manage the farmers at small scale, they farmers with very small land holdings should be grouped together to ensure large scale production of the raw materials for biofuel industry.
This industry should keep a link for contact with the groups of farmers and encourage them to cultivate specific varieties and cultivars of the crops for the abundant availability of the raw material and ensure considerable profits for the farmers or group of farmers.
There is need to establish a backward connection between the farmers and the seed suppliers to provide the farmers with abundant seed supplies, they should also be assured of the purchase of their production by the biofuel industry. For this purpose a system of purchasing the raw materials should be devised that have direct communication with the farmers or farmer's associations.
Stakeholders in biofuel industry of India should test the vertical coordination models or it should promote contract farming. These systems can be customized according to the needs of the industry and the farmers with the passage of time. It will help to reduce the cost of production by saving the transaction as well as marketing costs by the provision of the guaranteed market to the farmers.
Biofuel industry can thrive successfully in India by utilizing the manpower in the India that is abundant and is available at cheap rates, this will also help to reduce cost of production and increase the profitability of this industry. This industry can develop and play vital role in the empowerment of the poor masses of rural areas of India by involving them in the innovative and creative process of biofuel production.
The initial constraints in the development and improvement of biofuel industry in India can be overcome by providing the organizational as well as policy support to the people of rural areas, especially farmers, and by providing them initiatives for the production of raw material. These initiatives should be provided to as much of the farmers as possible to ensure success and promotion of biofuels in the country. The incentives should be sustained for long run and government should play its part along with the biofuel industry in this regard.
To become competitive and cost effective as compared to the traditional fuels in the market, biofuels should be manufactured with novel technology and trends, it is essential if these fuels are to be successful in India. Different production models should be tested on large scale economies to evaluate their cost effectiveness and availability of raw materials.
The models which are pro poor should be given more importance and these models should be appropriately run and guided in the right direction for the development of the biofuel industry in India.
6.3 Recommendations for investors and stakeholders in biofuel industry
One of the aims of this study was to formulate recommendation for the investors and major stakeholders in this industry, in light of the data collected and analyzed following recommendations are formulated for them.
The demand of the biofuels especially that of biodiesel is immense in the transport industry of India and the current biofuel industry set up is unable to cope with the challenges and landmarks set up by the Indian government, that is why the investors should grasp this opportunity to invest in the research and establishment of new manufacturing units of biodiesel in particular and bio ethanol in general.
The stakeholders should take immediate measures to expand their current business of biofuel production and manufacturing, major stakeholders involved in this sector include the farmers, on large as well as small scale, the cattle growers, food industry, government and transporters.
All these stakeholders should work collaboratively in order to develop this industry and obtain maximum gains, the issues and concerns of each of the stakeholder should be discussed appositely.
Due to the extensive use of sugarcane and molasses as a raw material, there are concerns among the sugar industry stakeholders about the competition for the raw material between the two industries. Moreover this competition may result in the increased prices of the raw sugarcane that will affect the cost of production of sugar as well as biofuels negatively.
Therefore it is essential to change the direction of this industry towards the non edible raw materials, for example Jatropha seeds. The investors should invest to enhance the cultivation of the Jatropha on the large scale so that it is easily available on large scale and can meet the requirements of the biofuel industry.
An important recommendation in this regard is to spare the agricultural lands from the cultivation of the crops that are used for biofuel production and maximize the utilization of waste lands for this purpose. In this way the food security of the country will no be threatened by the biofuel industry. This is a crucial issue for the Indian biofuel industry because a vast land is required for the production of the biomass for its development.
Investors should ensure the higher returns to the small scale farmers, only then they will be ready to cultivate the biofuel crops. There is a need of investment on this area as well if this industry has to thrive in India. To obtain this end with ease and convenience, investors should launch programs of awareness among the masses about the biofuel and biomass. Especially the rural areas should be focused in these mass awareness programs, the biofuel crops such as Jatropha has not been a conventionally cultivated crop in India. Therefore, farmers should be provided wit the technical and financial support for starting successful cultivation of these crops.
For profitable production of biofuels, the investors and stakeholders should provide soft or interest free loans to the small scale farmers. They should also make sure that the quality seed of high yielding varieties of biofuel crops is easily available to the farmers, crop insurance schemes and other incentives may be introduced to increase the productivity and profitability of the biofuel industry. For the development of this industry, government of India should make new policy to ensure the purchase of biofuel crop from the farmer and biodiesel or ethanol from the manufacturer at a specified price.
The data obtained from the literature review has indicated that biofuel crops other than the sugarcane and promising technologies for manufacturing biodiesel and ethanol should be tried at a experimental and commercial scale. Those crops should be preferred which require less inputs in terms of energy and give maximum yield, moreover the crops with higher energy conversion efficiency should be given preference.
The government should devise a policy to enhance communication between the central and state governments in order to speed up the process of registration of biofuel manufacturers and permission for the new firms, lack of communication between the two governments causes a delay in the clearance of new firms, for this purpose one window operation should be launched if India wants to achieve the goal of 20 % blending of biodiesel in conventional diesel.
7 Chapter 7- Personal Development
This research has added a great deal to the researcher's theoretical as well as practical knowledge, before starting this research as a research scholar, he had theoretical notion about the business strategy and biodeisel industry as well as business management .This chapter will explain the learning outcomes of this research and its effects on the researcher's personality.
7.1 Skills before Conducting Research
As a student of business management when the researcher started this work, he had enough theoretical knowledge but a little know how about the application of principles and laws of the management in the practical life and business management.
There was a little prior experience of accomplishing a task within tight frame of time and following a set schedule for the practical work till the start of this project. He had but a little self confidence, designing this research and selecting methodology for it was a novel experience for him. As far write up of the thesis is concerned, the researcher had but little experience in this regard.
The next section of this chapter will explain the learning outcomes of this project and improvement in the researcher's personal skills due to this project.
7.2 Individual Learning Upshots
For the researcher's individual learning, this research provided him with the crucial learning and knowledge to carry out studies on large scale. It will be of great help for the researcher's future career and research projects. This research will also enable the stake holders of biofuel industry in India to adapt more efficient means of production and earn more profit by reducing the cost of production of biodiesel and bio - ethanol. In the researcher's professional career, this research will help the researcher to manoeuvre his functions according to the situation and managerial requirements.
7.2.1 Importance of Time Table
The research has learnt that following a time table is essential to conduct a successful research and to write a dissertation. Each part of the dissertation as well as each task of the research work should be accomplished in the specific deadline. It is crucial to have a properly arranged and considerate schedule for the research and writing process. Following a time plan provides the time to manage unusual and unexpected problems during the normal and expected course of research.
Proper and well built time plan provides the researcher with a chance to rethink about his research and its results and amendments can be made easily if required. If all the steps of research are not performed in the time specified for each of them, it causes a great inconvenience for the researcher, research may be affected adversely and dissertation writing process may be deteriorated in the end.
7.3 Enhancement in Personal Understanding:
This was a large project as it covered a whole industry for the development of profitable industry, although the industry is relatively new yet it has crucial role in the development of the country as it is concerned with the energy security of the country and will be responsible for the provision of energy to all other industries of the country in the future. Working on such a large and crucial project has provided the researcher with a novel experience; it was unlike the usual expansion of class work like small assignments and reports on the business organizations.
Keeping in view the causality and wide impact of this research, the researcher had firm believed that it will help the researcher to improve his self confidence and will lead him to the success in his life. The researcher learnt a great deal about the practical life implication of the people involved in management during the interviews with the managers of the three large firms in the biofuel industry of India, this knowledge will prove a steering point in the researcher's professional career.
This research added to the researcher's experience and helped him to move a step forward from a student to a research oriented student and scholar. It was an altogether different project as compared with class assignments, writing a dissertation was also a great challenge that increased his self confidence and research capabilities. The researcher obtained intensive learning outcomes from the literature review about this project and was able to carve out a complete research project on the basis of that knowledge.
It was a process in which the researcher had the full support of his supervisor but he was allowed to move independently in the research process and this encouragement provided him with the chance to come forward with the new and novel approach. This project also proved a source of assessment of the researcher's personal abilities and approach as a researcher. During different processes and steps of this research project, came across new ideas and future research on different aspects of biofuel industry in India as well as in other countries. The researcher has decided to carry out researches on these new ideas by exploring the literature available and novel approaches. In short this investigation provided the researcher with the chance to explore himself as a research scholar.
7.4 Importance of Keeping Record of Research process and Section Flow
The researcher also learnt to keep the record of even minute activities of the research as it is very helpful in compiling and analysing the data, record keeping also helps in the writing of dissertation in the end. Another important thing is to create a schedule that is logical in its flow, the events in the research projects are interconnected and may not be completely independent in most of the cases. Therefore, it is necessary to formulate a schedule in the logical sequence of events and processes. Moreover accomplishing each task in the specified time is crucial to start the next phase of stage in time, a minor deviation from the schedule may result in the deterioration of the results of research in the long run. It is always advisable to spare some time for the unexpected problems that can be encountered during the research so that they can be managed easily and conveniently.
In the end, the research can surely state that this project was the creative addition in his career building and professional life; it will prove helpful in starting a professional life and making decisions in the practical life. It has also paved the way for the further research projects on the related phenomenon.