The power plant is a reality now and the dollars started rolling in yesterday.........Focus now shifts to power alcohol.Thumbs up for Evans.

God gives,mugikuyu takes.

@Obi,

Sorry for not responding on time..............All the 3 products are cogenerated.Briefly,in a cane factory,optimal production mix for every 1 tonne of sugar cane should give you 100 kg of sugar,100 to150 units of power (KWh) and 10 litres of power alcohol (ethanol).Of the 100-150 power units produced,15% is usually reserved for consumption by the factory and the rest exported to grid..........Money is in both power and ethanol since the initial capital for this plants is small and the plants themselves have minimal maintenance cost......MSC crushes 350 tonnes of cane per hour which accounts for 70% of the kenyan sugar industry capacity per hour.


God gives,mugikuyu takes.

@ Njung'e

Mumias are Simply passionate about this Idea but its Contribution to their Revenue Downline is Currently Inconsiquential...at that pace give them 10 more years to realize any Material Profit.. hoping that by that time they wont have gone Belly-Up!

Sample This;

You say these pple Churn 350 Tones of Cane per Hr..so if 1Ton of Cane makes 1Ltr of Chang'aa,it means thery produce 3500 Litres (350 * 10 ) of Alcohol per Hr and so in 24 hrs (assumming 24hrs No-Stop Operation),it means 24hrs*3500ltrs=84,000 ltrs perday & Night. So,monthly production is 84,000ltrs * 30days=2,520,000 litrs per month.Revenue Per month is 2,520,000Ltrs *40 bob/Ltr (assumed)=shs,100,800,000

Annual Revenue (assuming shutdown 3months) 100,800,000*9months=907,000,000shs in Revenue.

Once the above is Taxed at 30% (900m-270m=670m ) EPS contribution is less than .40 cts

So the big Question is,is this Urgument Holding any water??

and is so,do you think this ADDED Profit gives yu the courage to buy Mumias


M'c Kende Siafu !

@Eddie

Good trial.... Now,do your calculation again and include the kilowatts,possible benefits from economies of scale. That could get us closer to a better EPS. Add the possible favourable increase in market perception of the company's diversification - and lets the estimated market share price...

Some deals are like glass. Sometimes it's better to leave them broken than try to hurt yourself putting it back together.

...plus reduced expenses...read no more elec costs. @eddie,thats quite a lot of cash man,why the skepticism? I just didnt get ua point.

Truest proverb: Mwenda pole hajikwai

@Gordon Gekko,

Eddie calculated income revenue from one of the three Cogen processes.The 'profit' from the yet to be constructed ethanol plant,would exceed profit realised by many listed companies in the NSE........It is plain obvious that 670M is not little money especially given that MSC has been making peanuts out of molasses.........Carbon credits is an element of power generation which will be pegged at 100-120M per year.


God gives,mugikuyu takes.

Something wrong?

NSC grows sugar cane; squeezes the (sweet) juice out; dries the cane in the sun; burns it to get fir for steam boilers; passes steam to turbines to generate elec.

Now,what was the main product,again?

Wasn't it the 'sweet' in the cane juice?

Oh,if you din't know,MSC has not paid any elect bill for many years past!

In my view,their future lies in development of more efficient 'sweet' extraction process...then we can buy their sugar for 30-bob per kg at the shop...like the one from Brazil or Sudan

@Hi-Lo;

what is the website address?

Having looked at the figures again,my mind has changed....in my language they say that it is only fools who don't change their mind (No irimu itaugukagwo)...

Here we go:

The PPA with KPLC provides for 26MW at the rate of US$0.06 per kWh as long as the plant availability is above 85%.

Now this works out to about a billion bob in revenue per year...in a company whose turnover is sh12b

Might sound a little,but if the running costs and the finance costs for the power plant are not too high,this may make a significant impact on the bottom line. Assume it is 50% of revenue; then the PBT increases by sh500m...or sh350m PAT....0.23 increase on EPS...
.
.
.
.
YES @Virji,all things remaining constant,it's a good buy at 4.30....I'll call my broker right away!!!!

@ guka

for the power generation,something is not adding up....

consider this:

MSC crushes 1 ton of cane to produce 100 to 150kwh of electricity,simultaneously with the power alcohol and the cane sap

MSC crushes 350 tons per hour meaning that it takes 0.0029 hours (1/350) or 10.3 seconds to crash 1 ton.

power generated from 1 ton of crashed cane is 100kwh/0.0029 = 35,000kw = 35MW

In one year assuming continuous duty operation MSC would crash 350x24x365 = 3,066,000 tons.

Annual power generated 3,066,000x35MW = 107,310,000MW = 107,310GW

this is equivalent to 270 nuclear power plants combined!!!


NEVER TALK OF A RHINO IF THERE IS NO TREE NEAREBY - ZULU PROVERB