The 11th Global Conference on Environmental Taxation

1. GCET 2010 The 11th Global Conference on Environmental Taxation Using Environmental Taxation Strategies to Support Climate Change Resilience 3-5 November 2010, Bangkok THAILAND

2. The 11th Global Conference on Environmental Taxation 3-5 November 2010, Bangkok THAILAND The Economy Procurement Management ModelThe Study in BIOMASS FUEL HUSK of BIO-ENERGY Dr.Siriraks Khawchaimaha BBA, HA, MBA, DBA, CPA, ICSM Faculty of Management Science Khon Kaen University, Thailand

3. Background • Bioenergy comes from any fuel that derive from biomass • Biofuel does not result in a net increase of CO2 in the earth’s atmosphere • Agricultural products grown as a source of :- • bioenergy ; corn, soybeans, flaxseed, rapeseed • biodegradable waste and food leftovers from industry, agricultural, forestry, and households can also be used to produce bioenergy

4. The Plants Cultures: Sugar Cane Growing the Cane G Harvesting H Extraction E Seasonal and Limited Resources 4 months – December - March 2 ½months 8 months Squeeze the sweet juice, and the cane fibre ‘BAGASSE’ is carried to Boiler

5. How Cane Sugar is MadeThe Energy Aspects PowerFibers left over from crushing the sugar cane, it is called "bagasse" in the industry. The factory needs electricity and steam to run, both of which are generated using this fiber. The bagasse is burnt in large furnaces where a lot of heat is given out which can be used in turn to boil water and make high pressure steam. The steam is then used to drive a turbine in order to make electricity and create low pressure steam for the sugar making process. This is the same process that makes most of our electricity but there are several important differences

6. Bio-ENERGY Company Ltd Company Background • Khon Kaen, Northeast of Thailand Company Products • Bioenergy – from baggase • HEAT – to boil water in Cane Sugar process • High Pressure Steam – drive a turbine :- • Electricity – for :- • internal Sugar Product Company, • EXCESS capacity – 21 years sales contract to EGAT • Low pressure steam – for sugar making process

7. THAILAND76 provinces ISAAN19 provinces Khon Kaen South East Asia 20th – Administrative center

8. Challenges :Procurement Management Department • Seek and Source the Quality + Sufficient : waste bagasse , husks from rice mills • Logistics and Physical Distribution • Inventory Control and Management • Least Cost Boil water Heat Sugar Product Co., Bagasse, Husks Quality, Sufficient, Cost, Timely Low pressure steam electricity High Pressure Steam 21 years sales EGAT electricity

9. Issues • Seasonal • Limited Resources • Alternate Raw Materials : Husks, Bagasse, Corns • Quality Control & Assurance • Input – Husks, Bagasse, Corns • Physical Distribution – routes, on time, costs, experiences • Processes – continuously • Output – internal use, and sales to EGAT

10. The Action ResearchTheoretical Framework Supply Chain Management Workflow processes S T R E A M L I N I N G ECONOMIC Values Purchasing Management Sourcing Alternate Substitution Vendor Selection Processes Quantity Quality Procurement Management Model/Process Inventory Management Timely Quality Adequacy Logistic Management Physical Distribution Distances Experiences Quality, Safety Inventory Days Least Cost Method ABC Analysis Operations and Scheduling Quality Control Management Qualified Process

11. The Procurement Management Model Plan Suppliers Sourcing Physical Distribution QC Bio-Energy Production QA Qualified Husks Y Internal Sales EGAT Seasonal Alternatives Continuity Experiences • Price & QA • Distance • Capacity • Production Volume • Continuously • Delivery Cost • Quality Control • Cooperation • Distance: Company vs. Mill • Nb of trucks • Source • Selection • Storage • Quality N Scrap Husks Credit or Return

12. The Quality Management Cycle Sourcing Selection Storage Quality Control According to Plan Act & React Evaluation Development Planning guidelines Achievement Monitoring Improvement

13. The Procurement CostComparison: Bagasse and Husks

14. Discussion and Results • Input • Cane sugar growing and harvesting period in northeast is Dec-Mar (4 months) • Husks growing and harvesting period in northeast is 8 months • Challenges – various rice mills, quantities, transport, cost effective, maintaining husks at maximum heat generated • Inventory Management – destination and sourcing, vendor selection, ordering point, delivery time, minimum quantities, qulity of bio-resources, storage conditions, less waste or damge bagasse or husks or corns Results • The qualified rice mills supplier's list – 7 Udornthani, 2 Chaiyaphum, 1 Loei, 1 Nongkai • Transportation and Communication – mobile phone, fax, order confirmation notification • Payment – bank transfer , Official receipt

15. Discussion and Results • Processes : • On season • Off season • Customer’s demand • Transport cost method • Continuous improvement • Output – the assurances of quality output on electricity and low pressure steam, adequate, and importantly meet customer’s contract over the next 21 years from 2006 - 2027

16. Conclusion & Recommendation • Bagasse – sugar cane factory within 200 KMs  procurement cost of bagasse < husks • Approved Capital Budget – 2.6 million baht to construct the storage area for bagasse and husks • Awarded – Best Practice and Management Excellent • The Action Study results and recommendations • Increase purchasing points or kiosks • Forward Contract on Husks • Market survey on Customer’s Demand for market expansion • Supplier Relationship Management (SRM) • Study on other agricultural biomass products e.g. corns, corn trees, sugarcane leafs, and other sugarcane parts

17. Executive Summary • This action research demonstrates the reuses of the unused or by products to generate not only business units : income, profit, market share • Gain Corporate Social Responsibility • Gain Branding and Corporate Reputation

18. GCET 2010 Thank You Kob Khun Ka The 11th Global Conference on Environmental Taxation 3-5 November 2010, Bangkok THAILAND

19. Dr.Siriraks Khawchaimahatamarindkhonkaen@hotmail.com(66)81-809-0990 Q&A