Market & Competition

While the Company at maturity will be producing many millions of liters of straight vegetable oil/biodiesel each year, this remains a relatively small percentage of Tanzania's total diesel fuel consumption . Thus, the Company foresees no problem in marketing its production, other than one of logistics - most of Tanzania's population lives on the coastal belt, far from Kagera region.

However, Kagera is ideally situated to take advantage of the East African Community market, which now includes Rwanda as well as the founding nations of Tanzania, Kenya, and Uganda. Our product could be exported to Rwanda, Burundi, and southwest Uganda by road. Located adjacent to Lake Victoria, the Company could also export its product by barge to Uganda's capital, Kampala, and reach Kenyan markets through the port of Kisumu. The Company also presumes that rail freight prices will rationalize once on-going privatization initiatives are completed, allowing us to supply Tanzania's coastal demand via barge to the railhead at Mwanza.

The Company's straight vegetable oil may be purchased by the national electrical utility, TANESCO, for use in its district power plants in Kagera and Kigoma regions. Plans to connect these remote areas to both the national and regional grids are drawn, and thus some uncertainty exists as to this off-take.

The Company has also been involved in discussions with UNDP-Nairobi, which is proposing an East Africa-wide network of 15,000+ multifunctional platforms. UNDP is interested in a linkage between its project and the Company.

Competition in the production of biofuel certainly exists, both in Tanzania and more broadly in the region, but most have a focus on jatropha or palm oil, and are relatively small in size as far as we now know. The Company's stance on these alternatives is discussed in detail here.