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Technical Assistance Report: PDA Completion Report

Project Number: TA 6325 REG: Promoting Water Policies and Practices (Phase 5) PDA Start Date: 12 November 2007

Pilot and Demonstration Activity (PDA): Producing Water Filter from Coconut and Oil Palm Shells SYNTHESIS REPORT

23 May 2008

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

2 Project Team Members

Team leader Team Members (alphabetical order)

LEFEVRE, Prof. Thierry, Economic and Financial Expert & Project Coordinator / Planner HERMAN, WIPAPAN, Community Coordinator and Interpreter LE MARIER, Yves Henri, Technology expert LEFEVRE, Francois, Marketing Expert SURAPUN Tung Kao Tong, Assistant Community Coordinator (inkind basis replacement of Khun Kraisit MUSIKAJATT Assistant Community expert)

Community Counterparts

NGERNTHAENG, Chod, Mayor from Tap Sakae District and President of Tap Sakae Coconut Association (in-kind basis) SURAPUN Tung Kao Tong, Assistant Chief Officer from Tap Sakae District Administration Office (in-kind basis)

3 TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................... 5 2. SCOPE OF THE WORK ....................................................................................... 5 3. IMPLEMENTATION .............................................................................................. 6 A. Overview of Work Implemented ................................................................... 6 I. II. III. IV. V. VI. Introduction ........................................................................................... 6 Stakeholders ......................................................................................... 6 Institutional and Legal Framework .................................................... 8 Potential resources (Feedstock and AC Markets) ............................. 8 Technology and Process .................................................................. 14 Preliminary Environmental Impact Assessment ............................ 16

VII. Outline of Financing Plan ................................................................. 18 VIII. Main Conclusions: The Way Forward .............................................. 28 B. Cost and Financing .................................................................................... 31 C. Implementation Schedule ........................................................................... 31 D. Implementation Management Arrangements ........................................... 31

LIST OF TABLES Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Estimated Potential of Raw Material in Prachuap Khiri Khan ............. 9 Plant Design Options ............................................................................ 15 Activated Carbon Plant SWOT Table ................................................... 21 Operation Costs Structure of the AC Plant ......................................... 22 Price Structure of the AC Plant ............................................................ 23 Sensitivity Analysis to Various Parameters (with BOI) ...................... 24 Sensibility Analysis to Prices and BOI Privileges .............................. 25

LIST OF FIGURES Figure 1: Sensitivity Analysis to Various Parameters - Graph (with BOI) ........ 24

LIST OF APPENDICES Appendix 1. Appendix 2. Appendix 3. Appendix 4. Appendix 5. Location Map .......................................................................... 35 Field Visit #1- November 14, 2007 ......................................... 39 Field Visit #2- December 6, 2007 ........................................... 57 Field Visit #3- February 5, 2008 ............................................. 77 Field Visit #4- Public Hearing Report- March 26, 2008 ........ 83

Appendix 6-a. Project Brochure in Thai ...................................................... 117 Appendix 6-b. Project Brochure in English................................................. 119 Appendix 7-a. Project Concept Design ....................................................... 123 Appendix 7-b. Plant General Arrangement ................................................. 125 Appendix 8-a. Capital Investment Costs per Option .................................. 129 Appendix 8-b. Management & Labor Costs per Option ............................. 131 Appendix 9. Appendix 10. Appendix 11-a. Appendix 11-b. Appendix 11-c. Appendix 12. Appendix 13. Appendix 14. Appendix 15. Appendix 16. Economic & Financial Simulation Model Framework........ 133 Main Economic Simulation Results for all Options ........... 139 Overall Project Planning ................................................... 145 Project Preparation - Phase 1 ........................................... 147 Project Preparation - Phase 2 ........................................... 149 Project Cost Estimates and Financing Plan ....................... 151 Project Schedule of Activities ............................................. 155 Design and Monitoring Framework ..................................... 159 Inception Report - December 15, 2007 ................................ 163 Interim Report - March 3, 2008............................................. 175

5 1. INTRODUCTION

The Pilot and Demonstration Activity (PDA) seeks to determine the feasibility of producing activated carbon for water filters mainly from coconut (and alternatively from oil palm shells), and to define an appropriate public-private partnership business model. The Letter of Agreement (LOA) between ADB and CEERD the Executing Agency (EA) was signed on November 12th, 2007 and the activities planned for a 6 month period started with a field visit on November 14th, 2007 with the objective of meeting the local coconut producers and the authorities from Tap Sakae District (Prachuab Khiri Khan Province). This field visit was then followed by several other visits with the objective of gathering more information and data on the local conditions for the Activated Carbon (AC) project to be set up in one of Thailands biggest coconut production areas, as well as to identify and to start discussions with potential shareholders to be involved in the project when the construction and operation of the AC plant will hopefully start. The present document and its respective appendices represent the final Completion Report prepared in the framework of this PDA, and present the analysis of the legal, institutional, technical, economic and environmental issues related to the development of an activated carbon plant in Tap Sakae District, Prachuab Khiri Khan Province of Thailand. However, most of the results shown in this Completion Report can be used for other districts or provinces of Thailand or other SEA countries, such as Philippines, Vietnam, Cambodia, Malaysia and Indonesia. Of course, some adaptation corresponding to local natural and human resources, legal and institutional frameworks as well as some elements of the local markets of activated carbon will need to be revised in each new case study. 2. SCOPE OF WORK

The PDA targets a region that is one of the major producers of coconuts in Thailand and also one of the poorest. The Local Authorities of Tap Sakae have recognized the need to hasten socio-economic development of the Province, through an integrated cluster development of local industries, such as an AC processing factory and production of water filters for the domestic and international markets. This pre-feasibility study combines field activities and desk work and looks at following aspects: Stakeholders: o Meeting with local producers and cooperatives o Meeting with local community and local administration o Meeting with coconut processing industries Institutional and Legal Framework: o Meetings with relevant authorities at the local and provincial level Potential resources (Feedstock and AC Markets): o Identification of feed stock potentials and quality requirements o Identification of potential AC markets o Assessment of quality requirements o Assessment of market for water and air filters

6 Technology and Process: o Evaluation of the Different Technologies and Processes o Finalization of Conceptual Design o Preparation of Investment and Operational Budget Preliminary Environmental Impact Assessment o Emission Potential Evaluation o Pre-assessment of CDM Potential Outline of Financing Plan: o Economic Analysis with Sensitivity Analysis o Identification of Financing Sources and Project Implementation Plan 3. A. Overview of Work Implemented I Introduction IMPLEMENTATION

Following the signature of the LoA between ADB and CEERD on November 12, 2007, the EA initiated activities scheduled in the PDA work plan, on 14 November 2007, with an Inception (1st) Field visit to Thap Sakae District to meet with the local authorities and the community, followed by other visits on December 6th, 2007 and later on February 5, 2008 to meet with other stakeholders and potential shareholders. On March 26, 2008 a final visit was implemented to Tap Sakae to organize a Public Hearing consultation with the Tap Sakae District community to evaluate their willingness to develop such project, and/or to listen to their potential objections and recommendations. A map of the localization of Tap Sakae is given in Appendix 1. II Stakeholders

Since the inception of the project, the EA wanted to create a strong link between the project team and all the stakeholders involved, and/or to be involved in the future, with the development of an Activated Carbon (AC) facility in the Thap Sakae District, Prachuab Kirikan Province of Thailand. The EA then organized a series of three field trips to Thap Sakae to meet with all possible stakeholders. The objectives of these field trips were: to get a clearer understanding of the local coconut industry: visiting the fields, the factories and collecting data from local or provincial authorities; to identify the stakeholders, by meeting the local growers and their associations, the processors of coconut and charcoal, the local (district and sub-district municipalities) and provincial authorities (mainly the agriculture administration); to explain the ins and outs of the project and to set up with the stakeholders the next steps of the project activities. To prepare a large public hearing to present the project to the district community at large, and to gather their sentiment and eventually their approbation for the project development.

7 From the first three field trips, the EA was able to identify the local coconut growers and processors of coconuts, grouped under several local Coconut Associations which will be the potential partners for setting up the projected AC plant. On November 14th, 2007, a mini-public hearing was held with the sub-district coconut growers and processors, and their participation and interventions showed that a large majority was enthusiastic to supporting the development of the AC plant. The community also requested that a brochure in Thai language describing the project and its outcomes and impacts be prepared by the project team and be distributed to the community at large before the organisation of the public hearing now scheduled to be implemented on March 26, 2008. From the official side, both municipality and agriculture representatives have been involved for some times in this project concept and they have already provided information and data about the coconut sector and they see in this project a good chance to improve the socio-economic situation of the province, by creating jobs, improving incomes of families, etc..., as well as the potential for developing in more efficient way the local coconuts processing industries (coconuts and charcoal production particularly). It is in the intention of the project initiators and promoters to create a small training center associated with the AC plant to help local farmers and coconuts growers and processors to improve their incomes through the creation of additional complementary cultures, improving the productivity and quality of the coconut production and also improving their coconut shell charcoal production through better techniques and better management, as their actual procedures and techniques are technically unsophisticated and simplistic, leading often to losses of material and of quality when producing charcoal. The AC plant will have an analysis laboratory to analyse the quality of the feedstock received and of products all along the production chain. This will be of much help for the evaluation of the production of coconut and of charcoal of the district community and to help them in improving the quality of their products. More visits to Tap Sakae District have been scheduled before the end of the project, but one will be of particular importance, and it is the large public hearing to be organized on 26 March, 2008, at the Thap Sakae district community meeting place, with a large participation of the local population. This meeting will have as main focus to present the project and to evaluate the way the community perceives this project and finally to know if they approve and support its development in their district. On the request of the Community, the EA has prepared a brochure in Thai describing the project concept design and the project outcomes and impacts, which will be distributed to the Thap Sakae district community, two (2) weeks before the implementation of the public hearing scheduled to be held on March 26, 2008. The invitation to the public hearing will be sent directly by the district chief to all members of the community (1,000 copies of the leaflet will be distributed at this occasion). On March 26, 2008 a Public Hearing was organized with the cooperation of the Tap Sakae District authorities, to present the project developments and to solicit the opinion of the community on the potential development of this project. More than 120 members of the community participated and had the opportunity to give their opinion. A small survey questionnaire was handed out to the participants at the start of the meeting and was collected after the public hearing was over. The main output of this meeting was that the community at large is very much favorable to the development of

8 this project, for many reasons which are analyzed in the public hearing report, which is available in Appendix 5. The reports of the various Field Trips to Thap Sakae District can be found in Appendices 2, 3 and 4, together with the Project Brochure in Appendices 6-a (Thai version) and 6-b (English version). III Institutional and Legal Framework

The Ministry of Industry and its Department of Industrial Work, as well as the Office of the Board of Investment (BOI) will be the relevant institutions regarding the implementation of the AC manufacturing and possible production of water filters project. Apart from the Ministry of Industry, a certain number of other line ministries should also be involved in the development of this project. They include: Ministry of Finance, Ministry of Commerce, Ministry of Interior, and Ministry of Energy. During the 1st half of the project, the EA experts have gathered thorough information from all relevant institutional and legal entities in relation with the project and have prepared clear and detailed information concerning the administrative steps and legal aspects linked with the development of an activated carbon industry in Thailand. The BOI has also been contacted and has given a promising answer concerning the potential granting of BOI privileges to the AC project. Of course, the final and formal decision can only be obtained when the project is set-up and a formal request and application form is sent to the BOI. IV 1. Potential Resources (Feedstock & AC Market) Identification of Feedstock Potentials and Quality Requirements: 9 Feedstock Potential

A substantial part of the land in Thap Sakae district is used for coconut plantations: around 80% of the cultivated area is covered with coconut trees (i.e. 141.264 rai ~ approximately 275 sqm in 2007). As a result the number of nuts is massive. Figures provided for the district show an average number of 18 trees per rai with an average tree production of 4 nuts every 30 days. This gives an estimated production potential of 235,204,559 nuts per year, or 644,396 nuts per day. At present, neither all coconuts are processed, nor are all parts of coconuts utilized. The actual process is done locally, by land owners with quite primitive techniques. Moreover, the installed capacity for coconut processing doesnt allow, at present, to treat all available coconuts. The local coconut processing consists in: Coconuts cracked to open, Water collected and sold, Flesh removed and sold to be either used for coconut cream or coconut oil after drying, Pressed cake from the coconut oil production used as animal fodder, Coconut shells being processed for local charcoal production, later crushed to make charcoal briquettes,

9 Fiber being compacted and baled, while the dust is disposed in most cases, posing a problem of bug contamination, waste management and fire risk. The coconuts that are not processed locally are sold at low price and transported to the central part of Thailand for further processing. All this process has been carefully described in details and illustrated with photographs in the 1st field trip to Thap Sakae Minutes (14 November 2007) given with the project Inception Report. The following Table 1 translates the production of coconuts in the Prachuab Khiri Khan Province and neighboring Chumporn province into the volume of inner shell being available for feeding the charcoal manufacturing process. Table 1: Estimated Potential of Raw Material and Inner Shell in Prachuap Khiri Khan and neighboring Chumporn Provinces
PLANTATION AREA Coconut trees Coconut Coconut Coconut area (Rai) * (Tons /Year) * (Tons /Year) ** (Tons /Year) *** Raw Inner Shell Potential (Tons /Day) ****

Bang Saphan Bang Saphan Noi Hua Hin Kui Buri Mueang Pran Buri Sam Roi Yot Thap Sakae Total Prachuap Khiri Khan

152,621 77,816 1,387 12,219 48,991 4,616 7,046 136,788 441,484

171,330 80,406 1,300 7,882 50,867 4,571 8,964 128,089 453,409

n/a n/a n/a n/a n/a n/a n/a n/a 463,693

169,791 80,442 1,300 7,881 50,889 4,570 8,966 128,068 451,908

min (10%) 47 22 0.4 2 14 1 2 35 124

max (12%) 56 26 0.4 3 17 2 3 42 149

Total Chumporn Total Area 252,465 ** n/a 322,650 n/a 88 106 Sources: * figures from the Ministry of Agriculture and Cooperatives - Prachuap Khiri Khan Provincial Agricultural Extension Office, 2007 update ** figures from the Ministry of Agriculture and Cooperatives - Office of Agricultural Economics, 2007 update *** estimated, according to the average of trees/rai, nuts/tree and nuts weight provided by Prachuap Khiri Khan Provincial Agricultural Extension Office **** estimated, according to a min/max assumption for inner shell / whole nut

Chumporn Province, like most of the southern Provinces of Thailand, and Malaysia or Indonesia as well, presents consequent areas planted with oil palm trees. It must be noted that shell from oil palm trees are also suitable for production of charcoal and eventually AC. However, the project has not yet found at this stage any analyses proving that oil palm shells activated carbon has the same capabilities as the activated carbon from coconut shells. However, the structure, consistency and chemical composition of oil palm shells are very close to that of coconut shells, which allow thinking that oil palm shell could be a good feedstock for production of high quality activated carbon. However, more analyses would need to be performed to demonstrate above hypothesis, and which cannot be implemented in the framework of this PDA for limitation of funds. 9 Feedstock Quality

From the field visits implemented, samples of coconuts shells, charcoal and coco pith were collected in order to assess their chemical, physical and thermal characteristics and composition as they will be the raw materials to be used for AC production. The analyses performed on above coconuts residues show that the quality of the coconuts residues (shells & coco pith) available in the Thap Sakae District are of good quality and offers sufficient guarantees for their use as feedstock in the production of activated carbon. As regards the charcoal already produced in Thap Sakae district, analyses shows that there is a good margin for its quality improvement (probably through technological process and management improvements).

10 9 Quality Requirements and Products

The fact remains that for having a commercial use, AC must show regular characteristics. That is why the AC industry in collaboration with standard organizations have elaborated standard tests for evaluating physical and adsorptive characteristics of AC. The plant design will include a laboratory to analyze and control the quality of the input/output, especially needed if the activation process is tailored at times according to special customer requirements. It must be reminded that a great range of AC is available on the markets worldwide, each one with different physical and activity properties: first, because of the raw material used for the production; second, of its form (granular, powdered or pelletized) and third, of specific activation characteristics making it suitable for a special use. Moreover, AC prices may greatly vary according to the quality or characteristics, the manufacturing process, the grade but also the end use of the product. Granular or extruded AC tend however to be more expensive than powdered AC. 9 Identification of Potential Activated Carbon Buyers

The following list constitutes a general survey of AC applications and potential offtakers and is by no means exhaustive.
Liquid phase Type of industry Potable, process, ground and waste water treatment Description of process Adsorption of organic impurities Application area Chlorine and ozone destruction, removal of (excess) fertilizer Companies potentially interested might be A.I.M. Siam Co., Ltd.; Peerapat Group.; Thai Treatment Equipment Co.,Ltd. Akara Mining Co Ltd TK Galvaniz Co., Ltd.; B V K Plating Co., Ltd. Thai Beverage Public Co., Nestle (Thai) Ltd.; Sermsuk Plc; Sara Lee Coffee & Tea (Thailand) Ltd. Thai K. Boiler;

Goldmines Electroplating

Recapture of gold from cyanide solution metal coating by electrolyses Taste and colour improvement Extraction of caffeine

Treatment of mine dumps (CIP en CIL) Acid purification, odour control Production of wines and distillates Production of tea and coffee

Alcohol Caffeine removal

Petrochemical industry Sugar/glucose

Condensate treatment, Feed water for (high oil removal pressure) boilers Colour and improvement

taste Beet and cane sugar, Thai Glucose Co. Ltd.; glucose San-Thap International Co., Ltd

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Gas phase Type of industry Dry cleaning, fibers, degreasing of metals, coatings, printers, film/videotapes, peppermills CO2-production Breweries Description of process Removal of organic solvents from gas streams Application area perchloorethylene, methylene chloride, ethyl acetate, toluene, benzene, etc. Removal of alcohols, amines and mercaptans Industry, army Potential off-takers Gencon Engineering Co.,Ltd.; Iwamac Co.,Ltd.; M.E.C. Asia Pacific Co., Ltd.; Thai Pollutech Ltd., Part. Boon Rawd Brewery; Thai Beverage Public Co., Ltd.; Patkol Public Co., Ltd Phol Thanya Co., Ltd.; Dantherm Filtration Co., Ltd. Thailand Tobacco Monopoly, MOF; Filthai Co., Ltd.; Global Tech Co., Ltd.; Golden Filtech Co., Ltd.; Uni-Aire Co., Ltd. Averon Equipment Co., Ltd.; Chaimitr Engineering Int. Co., Ltd Nicho Co., Ltd. PTT E&P Public Co., Ltd; Electrolux (Thailand) Co.,Ltd.; V.M.S. Development and technology Co., Ltd. Kamanasan Co., Ltd.

CO2 purification

Gasmasks

Adsorption of organic fumes, war gases Taste and flavour control

Cigarettes

filter tips

Air-conditioning

Odour control, removal Airports, office of corrosive gases buildings, museum Odour control Removal of mercaptans, chlorated hydrocarbons phosgene production, reaction processes MEROX treatment Kitchen hoods, refrigerators, panel filters Removal of toxic gases

Waste disposal

Catalyst Natural gas Domestic use

Use as catalyst or catalyst carrier Purification, H2S and/or Hg removal Removal of aromatic components

Transportation of chemicals

Adsorption/desorption

Source: CEERD Survey

2.

Market Status and Identification of Potential AC Markets (National and International)

With an expected average growth of 4% - 5% of AC demand worldwide over the next few years, most of the growth opportunities will generally occur in developing geographic markets, primarily in Asia. In these markets, gains will be driven in all sectors by increasing economic growth and industrial output. Additionally, environmental concerns in developing regions will spur new growth in water treatment applications, already the largest single market in developed regions. Other environmental applications for AC

12 such as flue gas treatment and hazardous waste remediation will boost demand throughout the world. Specialized motor vehicle filtration products, particularly cabin air filters, will also post strong growth. In terms of products, powdered AC (PAC), which has historically dominated overall AC demand, will continue to slowly lose market share. Granular AC (PAC) products, and more importantly, specialty grades, will erode the dominance of powdered material. The advantages of granular material, primarily its ability to be regenerated, are allowing it to gradually penetrate the water treatment and sugar processing markets, the bastions of powdered AC usage. In addition, many of the market niches which show the most promise - such as catalysts, gas separation and storage, and air pollution control tend to prefer granular or specialty grades. Although faster growth in granular AC demand through 2010 will benefit the regeneration sector, this will be offset to some extent by cheaper imports from China and other Asian countries that will reduce the economic incentive to regenerate. Overall, the Asia/Pacific region contains the highest production capacity for AC, at 770,000 metric tons in 2005. Unlike other regions, where a relatively small number of companies account for the majority of capacity, in this region there are an estimated 80 to 100 different manufacturers of AC who tend to be much smaller than in other regions, with most having rated capacities of less than 10,000 metric tons per year. More specifically, in Thailand, the AC market has been expanding over the past 8 years. Exports of AC have grown by an average of 18% while imports by an average of 7% although a sharp decrease in AC imports, most probably due to the economic instability, was registered in 2007. At present moment, the two established AC producers, C. Gigantic. C. Co., Ltd. and Carbokarn Co., Ltd. are mainly producing granular activated carbon and powdered activated carbon although C. Gigantic C. has plans to produce pellet AC in the future. In addition, both companies have reactivation facilities. The combined regeneration capacity of the two companies is estimated to be 4.300 tons a year. Moreover, both seem to be able to produce AC for different applications such as for water, air or gas treatments. However it is most likely, yet unconfirmed, that the main application of their product is for water treatment. The projected plant in Thap Sakae could therefore focus its strategy on products not yet being produced in Thailand or in high-end value products which most of the time are produced in Europe, USA or Japan. On the other hand, Siam Cast Nylon Co., Ltd. controls the production of carbon block water filter. With over 1.500.000 activated carbon block produced and sold in 2005, the company remains the only carbon block water filter producer in Thailand. Half of their production is exported while the other half is sold locally. The company also expects to expand it facilities in the near future. Aside the carbon block production, the company also produces a wide range of water-filtering systems with other technologies other than activated carbon. There is also a certain number of Importers or distributors locally marketing water filters systems imported from the USA, Europe, Japan or Korea. The projected AC plant is Thap Sakae hasnt taken into account a production line of water filters for feasibility reasons. It has been concluded that water filter manufacturing would had to be considered at a further stage. In terms of prices, AC prices can vary depending on many factors such as the grade (PAC or GAC or Pellet AC, etc), the size, the application, the volumes purchased, the transportation and whether carbon reactivation is a service supplied by the AC producer

13 to the end user. Also, prices vary from one region to another. China is most probably supplying AC at the lowest prices on the world market. Prices of AC produced in Thailand tend to be rather low and the average price of AC for water purifications purposes may vary depending of the type, the application or the grade between 25 to 60 baht per kilogram (aprox. US$ 0.7 to US$ 1.8). Prices of imported AC may vary between 80 to 100 baht per kilogram. Normally, these prices include a 60% import duty. At the price levels stated above, the projected AC plant in Thap Sakae may hardly be able to compete with already established local producers of AC. However the main strategy is to focus the production on higher quality end-products and different grades, which are not produced by C. Gigantic and Carbokarn and which would be aiming, more or less equally, at the export as well as at the local market. Even though a certain level of competition may exist, the projected plant can naturally legitimate higher prices and therefore avoid direct competition with local producers.

14

V 1.

Technology and Processes Evaluation of the Various Production Processes Chemical Activation where the raw material is impregnated with a strong dehydrating agent (usually zinc chloride, phosphoric acid or potassium hydroxide), and then heated to temperatures between 450 - 900C. Physical Activation where the raw material is activated with steam under inert atmosphere at high temperatures between 900 1100C, depending on the raw material used.

There are two basic activation techniques used to produce AC:

AC produced by steam activation generally exhibit a fine pore structure, ideal for the adsorption of small molecular weight products and for applications involving low contaminant concentrations. Steam activation is generally used for coal-based, coconut shell and grain based activated carbons. The AC plant will use steam activation, fitting perfectly with the needed output and avoiding any problem linked with environmental hazards from the use of poisonous chemicals. 2. Evaluation of the Various Technologies

Two main types of activation machinery exist nowadays: vertical furnaces (often multiple-heart type) and rotary kilns, as well as fluidized bed reactors. Normally, rotary kilns can be used for production of activated carbons over a rather wide range of particle size, whereas vertical furnaces are generally limited to activation of coarse or large particle size material. The main difference between these two kinds of equipments stands in the pore structure distribution of the end products: The first option is to integrate carbonization and activation phases. In that case, raw coconut shell is used as raw material and the carbonization of the shell precede the second step the activation phase. It is important to note that these two phases have to be done separately because charcoal material must be cooled after being carbonized, before it can be activated. The second option, commonly used by AC manufacturers worldwide, starts directly from the activation stage, using coconut shell charcoal as raw material. Charcoal preparation consists in crushing it as a fine powder with a rotary crushing equipment to feed the kiln.

One of the advantages of the activated carbon process is that the technology is not specific to one specific raw material. In fact, most of the activated carbon factories can operate, without any modification, with multiple types of raw materials. It brings a diversified production with no additional cost. The activation process stays the same, only the characteristics of the end product change. 3. Finalization of the Plant Conceptual Design

After discussions with the Thap Sakae Stakeholders concerning the quantity of available coconut shells in the district and of the present quality of the coconut charcoal produced by the Thap Sakae district charcoal processors, the EA has arrived to the conclusion that the AC plant to be implemented should not produce at this stage it own charcoal from

15 coconut shells to ensure the best cost effective production of AC. In addition, and following the initial market study the AC plant should also orient its production towards medium to high quality levels products (granulated and pelletized AC) as required by the national and international market players. The conceptual design of the plant has then been prepared and finalized, and the selection of the technologies to be used for the various plant processes has also been done. Appendix 7-a presents the AC Technology General Design Concept which comprises of several main units, such as: Stockages of coconut shells and coconut charcoal; Production of coconut shell charcoal (batch process); Activation of the coconut shell charcoal (continuous process); Preparation and conditioning of the activated carbon (packaging, filters, etc); Stockage and dispatch of the final products; Utilities (electricity & steam production, water treatment, fire protection, etc).

A Plant arrangement is presented in Appendix 7-b. In addition, and to take into consideration the problematic posed by different regions in SEA with different supply availability potentials and with different pricing realities for the main feedstock, several options have been envisaged in relation with: The maximum capacity of the plant (10, 7, 3 and 1 Mt/day); The processes to be used in the plant, including or not: 9 The production of electricity using coconut shells (instead of grid electricity); 9 The production of coconut charcoal (carbonization process). Following Table 2 gives a summary of the various options selected for the study: Table 2: Plant Design Options
Options Carbonization + Activation (with RE Power Generation) Carbonization + Activation (without RE Power Generation) Activation only (without RE Power Generation) 10Mt/day (1) 7 Mt/day 3 Mt/day 1 Mt/day

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

16

4.

Preparation of Investment Costs and Operational Budget

For the implementation of the economic analyses, all capital and operational costs related to above options have been prepared by using actual market prices on the international market particularly for the technology, and also in Thailand for all construction, services costs and human resources identified under this project, and also for the price of the feedstock. The investment and operational cost items have been looked at in more details, and consist in: Capital Investment Costs Incomes: AC Sales & Revenues Expenses: Details on above cost items for each of the selected options shown in Table 2 are available in Appendix 8-a and 8-b. Following a systematic economic analysis of all above options, and considering the availability of feedstock resources in the Thap Sakae District and of the economic feasibility of the project, option #7 has been selected. This is a plant with a production of 7Mt/day of activated carbon, and with no carbonization process involved. This option has demonstrated to be economically and financially feasible as well as environmentally sound, well accepted by the community and presenting good prospects for replicability in other provinces of Thailand and/or in other Asian countries. Of course, additional studies will need to be implemented in each particular case to customize above analyses and to assess what options are best fitted to each locality and/or region. VI 1. Preliminary Environmental Impact Assessment: Emission Potential Evaluation: CO2 (from biomass); HC (from biomass); PMs; NOx Steam; Solid Wastes (ashes and domestic) Used water (domestic)

The principal emissions produced by an activated carbon factory are:

However, the presence of these emissions depends of the configuration chosen for the AC plant and of the processes involved. Basically, under this study, several selected options are under study, and account with the following processes: Raw material coconut shell storage area (options #1, 2, 3, 4, and 5); Raw material coconut charcoal storage (all options) Carbonization Process unit (options #1, 2, 3, 4, and 5); Activation process unit (all options);

17 Flue gas treatment facilities (all options); Utilities facilities (all options). Fuel Gas unit; Compressed Air & Inert Gas Generation Unit; Raw Water Storage; Water Treatment Unit; Fire Protection System; Power Generation Unit; Instrument Control & Emergency Shut Down System.

The utilities employed in nearly all designed options consist principally of following units:

However, only option #1 includes an electricity production unit using coconut shells (or any other available biomass source) as its feedstock, and through a gasification process followed by a high efficiency gas engine and an electric generator. The process units producing most of above emissions are the carbonization and the activation units. In addition, the transport and storage of charcoal and of activated carbon produce also emissions under the form of dust and PMs. The plant has been designed to recuperate and to recycle all these emissions through the filtering of all flue gases produced during the carbonization and the activation. All the carbons recuperated through the filters, are recycled in the activation process and/or used to produce charcoal briquettes which can be sold on the market as an additional source of income. In addition, the flue gases from the activation process, once filtered, are used to produce the process steam needed in the activation process, through a heat exchanger system and a boiler. As for the water, a water treatment unit is part of the design of the plant. The solid & water waste produced by the plant are mainly those of the staff and are treated through conventional techniques in use in the Thap Sakae District. It is difficult at this stage to evaluate the precise quantities of these produced emissions (apart of the solid & liquid wastes which are directly related to the number of staff), as there are many options under study, and a more precise evaluation of these emissions will need a more advance engineering design of the plant. As a major concern, the plant shall be designed to be environmentally friendly, as all wastes (air, solid or liquid) shall be treated adequately in order to preserve the environment. 2. Assessment of CDM Potential

Analyses implemented in the framework of this PDA, show that only when electricity needed by the plant is generated through the use coconut shells (or any other locally available biomass), CERs can be produced and ensure a regular income to the project cash flow. However, even in option #1, producing 10 Mt/day of activated carbon, the initially estimated quantity of CERs generated is around 2,150 Mt reduction of CO2 equivalent per year or an estimated amount of US$ 43,000 per year at present market value of the CERs.

18 It is necessary to note that the estimated quantity of CERs produced by the project represents a very small monetary value, and it would be probably difficult to take the decision to start a CDM process in this case, as the overall cost of developing the CDM project will be most probably equivalent to 2 to 3 years of CER proceeds. Another option could be to build an electricity plant with a higher capacity (3-5 MW instead of 0.5 MW) and to generate much more electric energy than the one required by the plant, and to sell this over-production to the national grid, through the VSPP scheme set-up by the Thai Ministry of Energy (MOEN). In this case, the quantity of CERs will increase greatly (e.g., reduction of 12, 900 Mt of CO2 equivalent per year for a 3 MW electric capacity plant, and reduction of 21,500 Mt of CO2 equivalent per year for a 5 MW capacity). In this case, in addition to the proceeds from the CERs, the incomes from the electricity sell, as well as the feed-in tariff (Baht 0.30/KWh produced) granted by the Thai government for VSPP projects would certainly be a great incentive to build and operate such a facility in the framework of the activated carbon factory. This analyse and particularly the optimal sizing of the small power utility and the optimal choice of the biomass resource to be used have not been done in the framework of this study, as it would require more financial resources and it is not one of the main priority of this study. However, this option should be carefully explored during the full feasibility study phase, as it could be a great incentive to develop this electricity production unit in the framework of the activated carbon plant, which will certainly enhance the overall financial feasibility of the project. VII Outline of the Financing Plan:

Section V looked at the determination of the main financial and operational parameters of an AC plant: (i) capital investment costs; and (ii) operational budget, including fixed and variable costs. In the framework of the implemented study, economic analysis has been implemented on all options shown in Table 2. In addition, a preliminary identification of the financing sources and of a road map for the preparation of a Project Implementation Plan has been explored. 1. Economic Analysis

For the implementation of the economic analysis, additional information is needed to simulate the project cash flow, and to calculate the main project and financial indicators necessary for the economic evaluation of the project. The needed additional information consists of: (i) Depreciation rate; (ii) Tax regime; (iii) Discounting rate; and (iv) Bank loan rates profile. In addition, it is also necessary to define the Project Base Case around which sensitivity analysis can be performed, and which comprises some hypothesis and concrete values on parameters such as: (i) Time frame of the study; (ii) Selling prices of the Activated Carbon produced; (iii) Buying prices of the feedstock (iv) Tax Regime; (v) Financial parameters to be used; and (vi) Equity/Debt ratio. Finally, a set of indicators has been set-up to monitor the feasibility of the project, and which includes: (i) Project IRR; (ii) Project NPV; (iii) FRR; ERR and DRR; (iv) PBP - PayBack period; (v) ADSCR - Annual Debt-Service Cover Ratio; and (vi) LLCR - Loan Life Debt Service Ratio, and eventually others.

19 Then, the economic simulation can be implemented and comparisons of the different case studies (selected options) can be prepared. Finally, main conclusions and some recommendations can be drawn from these simulations. o Base Case Hypotheses:

The Base Case analysis includes, for each of the chosen options, the following set of assumptions: 9 9 Cash Flow: The cash flow is simulated on a 25 years period. Selling Prices of Activated Carbon Produced: The selling price of AC chosen for the Base Case is: - [US$ 2,600/Metric ton] Buying Prices of Feedstock and Make-up Fuels: The buying price of the feedstock has been selected as follows: - Coconut Shell: [US$ 71/Metric ton] - Coconut Shell Charcoal: [US$ 170/Metric ton] Taxes Regime: The Base Case Simulation has been performed following basic scenarios: - With tax privileges granted by the BOI. Financial Parameters: As shown in precedent sub-section: - [3%] Inflation Rate; - [10%] and [5%] straight line depreciation for Machinery & Equipment and for Buildings respectively; - [10%] discounting rate; - [8.5%] loan interest with a 2 years grace period on the principal repayment; Equity/Debt Ratio: An equity debt/ratio of: - [30/70] has been used. o 9 9 9 9 9 9 9 Evaluation Indicators: NPV: calculated with a discount rate of [10%] and over a 25 year period IRR: is the Internal project rate of return over a 25 year period PBP: Time needed to recover the initial investment FRR, ERR, DRR: Financial, Equity and Debt rates of return; PBP: Pay-Back period; ADSCR: Annual Debt Service Cover Ratio; LLCR: Loan Life Debt Service Ratio.

Following indicators have been selected to compare the various selected options:

20

Economic Simulation and Main Results:

The simulations have been performed for each of the selected options shown in Table 2, using the same sets of parameters and hypotheses as defined for the BASE CASE. The framework of the economic analysis (the cash flow model) is presented in Appendix 9. The simulation results corresponding to each of the options under study have been aggregated in a unique table for comparison purpose: see Appendix 10. o Preliminary Conclusions:

Precedent simulation results show that the best options are options #2, #3, and #5 and can be resumed as follows: 9 Generation of Electricity from coconut shells is a very expensive option (option #1) which reduces the overall economic feasibility of the project. This option however, could be of great interest, and could help improve the projects economic feasibility if the power utility is over-dimensioned to serve not only the AC plants needs, but also to sell the over capacity of electric energy to the national grid. Carbonization of shells (coconuts, oil palm) is economically feasible, only if the AC production is high enough to give economies of scale effects. This is the case of the production option #2 with 10 Mt/day of AC, but if the AC production is lower than 10Mt/day, then the economic feasibility is in jeopardy. Without carbonization process, the feedstock used is the coconut (oil palm) shell, and in this case both production options of 10 Mt/day and 7 Mt/day of AC show good level of economic feasibility. A production of AC lower than 7 Mt/day makes it impossible for the project to be economically feasible if carbonization is included in the production process chain. All other options (options #4, #5, #8, and #9), corresponding to lower production capacities of 3Mt/day and 1 Mt/day respectively, are not economically attractive, as the capital infrastructure investment is too high in comparison with the AC production capacity. Then these options should not be pursued in principle. o Additional Remarks:

The simulations presented above have been developed using technology costs obtained from technology providers in India and in France with the quality of the equipment as the focus and not the price. The operational costs have been based on Thailand (BOI data and local surveys) present accepted costs (salaries, utilities, construction, feedstock, etc) and could vary from one country to another depending of the prevailing rates. As a consequence, above costs do not represent the result of a systematic and price oriented market search for technology particularly. It will then be necessary, as soon as the full feasibility study starts, to proceed with a wider and systematic approach to identify the best quality/costs options for the various processes involved, which will certainly help to improve the economics of some of the options presented above. However, above simulation results can serve as a strong guideline and as an initial lead for the development of more detailed studies for coming, such as a full feasibility study.

21 2. Risk Analysis and Sensitivity Analysis

Following the initial conclusions shown in precedent section, options #2, #6 and #7 are all feasible and offering acceptable and even excellent returns on investments for some of them. These options open then very encouraging prospects for the development of an activated carbon facility in Thap Sakae District, Prachuap Khiri Khan Province of Thailand. However, options #2 and #6 could face a shortage of available coconut shell and /or charcoal due to the availability of the feedstock in the Thap Sakae District and then will present more risks than option #7. Option #7 offers more economic interest due to its high level of feasibility and high prospects of return on investment. This option #7 has been studied further to look in more details at its feasibility and a sensitivity analysis will also be performed. In this last case, the Base Case analysis follows the same hypothesis presented in precedent section, and the main results consisting in: (i) Risk Analysis; (ii) Sensitivity Analysis; and (iii) Financial Indicators, are presented as follows: o Risk Analysis (SWOT Analysis)

The following SWOT Analysis Table 3 summarizes the major project strengths and potential risks encountered before and during operation of the plant. The Team is confident and strongly believes that the project has the necessary assets with the necessary strengths to be implemented. Table 3: Activated Carbon Plant SWOT Table
Strengths
Established experience of the partners in the industry Concrete and beneficial involvement of the Community in the project Profitable project (IRR around 26%) High ROI The project is backed up by Government incentives (listed on the BOI activity promotion list) Competitive pricing strategy and high quality endproducts Well known and established technology Contribution to the improvement of the Environment Possible expansion of the plant

Weaknesses
Shortage of resources to develop a full feasibility study High development cost New comers in the AC business Unrecognized brand Remote location of the plant No off-take contract signed yet No raw material supply signed yet

Opportunities
Internal opportunities Product line can be expanded Possibility to adapt to customers future specific requirements Raw material can be diversified Additional income source through trading of CERs External opportunities/contributions Countries improved independence Expected international and local AC demand growth over the next years. High export opportunities Positive environmental/economical/social impact

Threats
Delays in plant construction Difficulties in finding skilled staff and key managers in remote area Medium to Highly competitive business Further industrial development of competitors Local currency over rated (impact on exports) Reliability of statistical data Reliability, constant availability and even quality of raw material supply (coconut charcoal) Raw material cost increase High import duty on raw material (coco shell or coconut charcoal)

22 Overall, seen from the Project Team viewpoint, the construction of such plant is considered to be highly feasible, highly profitable for the countrys development, for the Investors and last but not least for the environment, which is becoming a prime priority in Thailand. o Project Production Cost and Price Structure

The following Table 4 and Table 5 shows the costs structure for year 1 and year 3 of the AC plant operational costs and price structure:

Table 4: Operation Costs Structure of the AC Plant


Total Costs Items US$ LPG cost Other Variable Costs Total Variable Costs Human Resource Costs Other Fixed Costs Total Fixed Costs Total costs 428,400 580,352 1,008,752 428,387 181,705 610,092 1,618,845 1st Year % 26.46% 35.85% 62.31% 26.46% 11.22% 37.69% 100.00% US$ 888,780 1,175,903 2,064,682 908,885 251,493 1,160,378 3,225,060 Total 3rd Year % 27.56% 36.46% 64.02% 28.18% 7.80% 35.98% 100.00%

23 Table 5: Price Structure of the AC Plant


PRICE STRUCTURE Year 1 TOTAL PRODUCTION (Mt/Year) Units FEEDSTOCK COSTS Other Variable Costs Total Variable Costs OTHER DIRECT & INDIRECT COSTS Human Resource Costs Other Fixed Costs Total Fixed Costs Total Other Costs TOTAL PRODUCTION COSTS US$/Year 428,400 580,352 1,008,752 428,387 181,705 610,092 1,190,445 1,618,845 1,260 US$/Mt 340 461 801 340 144 484 945 1,285 % 13.08% 17.7% 30.8% 13.1% 5.5% 18.6% 36.3% 49.4% US$/Year 888,780 1,175,903 2,064,682 908,885 251,493 1,160,378 2,336,281 3,225,060

Costs
Year 3 2,464.00 US$/Mt 361 477 838 369 102 471 948 1,309 % 13.87% 18.4% 32.2% 14.2% 3.9% 18.1% 36.5% 50.3%

MARGIN PRICE

1,657,155

1,315 2,600

50.6% 100%

3,181,340

1,291 2,600

49.7% 100%

Without BOI Privilege IRR (%) 20.05%

With BOI Privileges (5 years) 24.86%

With BOI Privileges (8 Years) 25.54%

Sensitivity Analysis

Under this analysis, possible deviations from the Base Case hypotheses have been looked at for the following parameters: 9 9 9 9 Sensitivity to Feedstock Price changes (coconut charcoal); Sensitivity to Operational Costs changes (variable costs); Sensitivity to Total O&M Expenditures variations; Sensitivity to Revenues changes and/or Market Demand variation (Prices of AC); and 9 BOI Grant, including 5 or 8 years with 100% income tax holidays, followed by a 5 year period with 75% income tax reduction; 9 Potential location of the plant in a Tax Free zone.

The analysis shows that the project is highly sensitive to Revenues, moderately sensitive to Operational costs and O&M expenditures and lowly sensitive to Feedstock price. (Refer to Table 6 and Figure 1 - Sensitivity Analysis herewith after).

24

Table 6: Sensitivity Analysis to Various Parameters (with BOI Privileges)


IRR Values (Around Base Case) Variables -20% Feedstock (Coconut Charcoal) Price Operational costs (variable) Labor Costs O&M Expenditures Market Demand or Revenues (Price AC) 26.72% 28.27% 26.77% 29.85% 15.99% 0% 25.54% 25.54% 25.54% 25.54% 25.54% 20% 24.35% 22.75% 24.30% 21.06% 34.33% -20% 1.18% 2.73% 1.23% 4.31% -9.55% +20% -1.19% -2.79% -1.25% -4.48% 8.78% lowly sensitive moderately sensitive lowly sensitive moderately sensitive highly sensitive IRR Variations Comments

Figure 1: Sensitivity Analysis to Various Parameters Graph (with BOI Privileges)

Table 7 next page gives also a clear picture of the relation between AC average prices and the projects IRRs in three configurations of BOI privileges (No privileges, 5 and 8 years taxes exemptions respectively), and also taking into account the potential location of the Plant in a BOI tax Free zone.

25 Table 7: Sensibility Analysis to Prices and BOI Privileges


IRR No BOI
11.65% 16.06% 20.05% 23.81% 27.43% 30.95%

Prices (US$/Mt)
2,000 2,300 2,600 2,900 3,200 3,500

IRR Free Zone


15.48% 21.06% 26.26% 31.25% 36.10% 40.85%

IRR BOI (5 years)


13.83% 19.52% 24.86% 29.98% 34.96% 39.82%

IRR BOI (8 years)


14.40% 20.17% 25.54% 30.67% 35.63% 40.47%

3.

Identification of Financing Sources and Project Implementation Plan o Financing Sources

Some of the project financial sources have already been identified and consist of the following entities: 9 Local equity shareholders (as detailed in Section II of this report) consisting of the local associations of coconut growers, charcoal producers, private investors would be ready to be involved in several way, such as land, long term supply contracts and possibly cash; The project developer, CEERD, is also willing to enter in the project with an in-kind equity share corresponding to the technical know-how as well as part of the project development costs; Other private entities have already been contacted in Thailand and abroad (e.g., India, RO Korea, Sri Lanka, Japan and in the EU) to enter in the project as technology suppliers and/or as equity shareholders, and are at present studying this opportunity; It is expected that the Thai Government would particularly support this initiative through the BOI and also through more direct support, as this project has a strong social component, as it will help developing a region from the south of Thailand which is at present economically depressed. In addition, the development of a coconut training center around the activated carbon project, will certainly receive a direct support from the government; Development Banks, such as ADB could also play a major role in supporting financially this project which could act as a pilot project for the ASEAN region, in which other similar projects could be developed, using the expertise acquired in this 1st pilot project, as well as in the development cost already engaged. ADB could enter in this project as an equity shareholder and/or as a loan provider and/or as a risk guarantor.

26 9 Finally, Commercial Banks or Financial Institutions, in Thailand and abroad, could also enter in the financing arrangement for this project, under the form of equity shareholding and of course as loan providers. A general view of the financing arrangement can be seen herewith after:

Project Implementation Plan

The present pre-feasibility study has certainly help the project developers to clarify some concepts and obstacles and to identify the main issues to be developed in the future. In particular, the pre-feasibility study has allowed to identify the main characteristics and contour of the future project to be developed, such as its production capacity of 7 Mt/day, the technologies and processes to be implemented (activation only from coconut shell charcoal (and/or oil palm shell), and possibly the addition of an electric utility able to sell its over capacity to the national grid), a small training center for the improvement of the local productions of coconuts and of coconut charcoal, and as a results improve the general socio-economic conditions of the local populations. To be able to carry out this plan, the following activities can be roughly drawn for the following steps: 9 9 9 9 9 9 9 9 Search of financial resources to facilitate the development of a full feasibility study (around US$ 460,000, divided in two phases of aprox. US$ 230,000 each); Development of the full feasibility study (consisting in the preparation of the Front End Engineering Design (Feed) - Basic Engineering); Creation with local partner of a private company able to manage the project from the inception; Raising the capital (equity and debt) needed for the development and implementation of the project; Selection of the EPC contractors for the construction of the plant; Land acquisition; Finalization of the project details (including basic and detailed Engineering) and preparation of the bidding documents; Construction of the plant;

27 9 9 Selection and training of the plant operating staff; Test run and start of operation of the plant.

A more detailed time schedule is provided in Appendix 11-a. Finally, the more urgent task, following the finalization of this pre-feasibility study would be to raise the necessary financial resources to implement the full feasibility study. This activity which consists in the preparation of the project Front End Engineering Design (Feed) - Basic Engineering could be developed in 2 phases: 9 Preparation Phase (Phase 1) of 6 months, and with a cost of US$ 235,659, and which will allow to precise in more details the technologies to be employed and their costs, allowing a more accurate determination of the overall feasibility of the project. During this phase, a systematic market analysis will be performed on the availability of the feedstock and on the identification of the major players and users of activated carbon in Thailand and in the ASEAN region, and their ability to absorb the new plant production. The pre-dimensioning of all the technologies to be also developed during this phase, which will allow a better understanding of the options and their costs. Finally a Business Plan will be prepared, to be presented to potential investors interested in participating to the development of this project (see Appendix 11-b). Implementation Phase (Phase 2) of 6 months, and with a cost of US$ 231,306. This 2nd phase will consist in the detailed technical design of the AC plant, including the Process, Civil work, Piping, Mechanical, Corrosion, Electrical, Instrumentation, Safety details, as well as the Environmental study (see Appendix 11-c)

The immediate following step, after securing the 1st phase financial resources, will be to implement the Preparation Phase (Phase 1) of the Front End Engineering Design (Feed) - Basic Engineering, which is in fact the initial stage of full feasibility study.

28

VIII

Main Conclusions: The Way Forward

From the market analysis presented in Section IV and the feasibility analyses presented in Sections V, VI and VII, some main conclusions and remarks can be drawn and as follows: 1First of all, in the market of activated carbons, coconut shell AC (and in close range, oil palm shell AC) seems to be the category of activated carbons with the best qualities to filter water, gases and other usages. It is then a strategic advantage to have access to these feedstock resources to produce activated carbon, and ASEAN region is richly endowed with these resources. In view of the regional and national markets of activated carbons trends, it seems that the present market is moving towards the production of higher quality grade activated carbons (e.g., granular, pelletized and special ACs). As lower grade ACs are produced in large quantities world wide inclusive in the Asian region, positioning new AC projects in line with the current trend (medium to high quality grade ACs) would be a foremost advantage and a key long term strategy by producing higher value added products which would serve a yet unsaturated market, A new AC project should then focus, as a priority, on the development of granulated and palletized AC products as they have higher value added than the powder ACs products. Regarding the technologies and processes to be used in new AC projects, it has been clearly agreed and decided that the chemical activation process used to produce some ACs, even if able to produce higher value added products that the mechanical processes, will not be used in this project for obvious and numerous environmental reasons. For the perspective of the activated carbon plant feedstock, the study shows that two abundant biomass resources available in the ASEAN region are well fitted for the production of activated carbons, with very close final characteristics: (i) the coconut shells; and (ii) the oil palm shells. Both have their advantages - notably they are perfectly suited to gas phase purification and potable water purification processes, and disadvantages, but the coconut shell activated carbon offers finally a slightly better quality of activated carbon than the oil palm shells activated carbon. Regarding the sizing of the plant production capacity, it appears that for the production of activated carbons, the size of the production facility cannot be too small as demonstrated in the precedent sections. It appears that a production threshold of 6-7 Metric ton per day of AC is necessary to ensure an acceptable level of economic feasibility to the project, as capital investments are quiet high to develop this kind of technology. As shown in precedent section, the integration of the carbonization process in the AC production chain should be carefully analysed, as it depends on the production capacity of the plant. Above analyses show that, for economic feasibility reasons, the carbonization process can only be justified if the production capacity is at least around 9-10 Metric tons per day. Under this

2-

3-

4-

5-

6-

29 threshold, the integration of the carbonization process in the production chain will greatly reduce the economic feasibility of the plant. 7In addition, when looking a production capacity of 9-10 Metric tons per day, the feedstock availability of coconut/oil palm shells (and or coconut/oil palm charcoal) in the District/Province where the plant is projected to be built is a critical issue. After carefully analyzing the existing statistics on coconut availability and after intensive discussions with the coconut growers, the charcoal producers and the local administrations in the Thap Sakae District, Prachuap Khirikhan Province, it appears that the best capacity size for the development of an AC project would be around 7 Metric tons per day. Following precedent remarks, it is clear that the Thap Sakae project should be designed as follows: (i) 7 Mt per day production capacity; (ii) due to the proposed size of the plant, for feasibility reasons, the carbonization process should be excluded and the plant feedstock should be coconut (or oil palm) charcoal produced by local charcoal producers (who will be part of the shareholding in the project); (iii) A small carbonization unit should still be set up in the AC facility for pedagogical purposes, to teach local charcoal producers to produce better (quality and quantity) charcoal. A Training Center will then be installed within the AC plant to perform this pedagogical task towards all the coconut growers (improvement of the quality of the coconuts) and the coconut charcoal producers (improvement of the quality of the coconuts charcoal). This carbonization training unit will then allow to greatly improving both community incomes, as well as the AC plant productivity due to the better quality of its feedstock. In addition, a more systematic research on cost effective technological options and technologies (available in many countries in the world, such as: Sri Lanka, RO Korea, PR China, etc) would allow to improve the economics of above options and would allow more flexibility in the design of such facilities (e.g., lower production capacities better adapted to local availability of feedstock and of communities, more competitive production facilities, etc). As presented in Section II, the involvement of the local community and related coconut associations as direct stakeholders and possibly as shareholders of the project is an essential part of the project which will reinforce the long term sustainability of the project. The development of an adapted AC production facility in Thap Sakae District, Prachuab Khiri Khan of Thailand and the experience gained in the operation of such facility in close relationship with the local communities could act as a catalysers for the future dissemination of this experience and technology in other ASEAN countries which are also richly endowed with coconut and oil palm cultivations. The development of a water and/or gas filter production line associated with the activated carbon production facility would need to be more carefully assessed, as the local and international markets of water and gas filters are already well established. However, from the implemented market study, it is clear that working in cooperation with manufacturers of water and gas filter systems, producing for them the activated carbon blocks or special filters designed to fill their systems

8-

9-

10-

11-

12-

30 could be a much better option than competing with them on the water and gas filter systems manufacturing field. 13Last but not least, the next and immediate step would be to secure the financial resources to implement the Preparation Phase (Phase 1) of the Front End Engineering Design (Feed) - Basic Engineering, which will allow the project to go forward and to reach a level where financial resources for the implementation of the project in Thap Sakae District could be raised and the project finally initiated.

31

B.

Cost and Financing

See Appendix 12- Cost Estimates and Financing Plan C. Implementation Schedule

See Appendix 13 - Project Schedule of Activities D. Implementation Management Arrangements

Since the start of the project, the Project Management Team has implemented several main activities, such as: Setup of the Team of Experts: Team leader: LEFEVRE, Prof. Thierry, Economic and Financial Expert & Project Coordinator / Planner Team member{s}: LE MARIER, Yves Henri, Technology Expert HERMAN, Wipapan, Community Coordinator and Interpreter LEFEVRE, Francois, Marketing Expert Khun SURAPUN Tung Kao Tong, Assistant Chief Officer, Tap Sakae District Administration Office and project Assistant to the Community Expert was brought from the beginning in the Project as an in-kind contribution from the local administration (to help mainly with the relation with the local administration and with the implementation of the public hearing) Khun NGERNTHAENG, Chod, Mayor from Tap Sakae District and Project Local Agricultural Expert is also brought as an in-kind contribution from the Projects Community counterparts. Organization of Field Trips and Community Meetings:

The following experts are at present part of the Team: o o

Up to the time of the preparation of this Interim report, four (4) Field trips have been implemented to Thap Sakae to meet with the multiple project counterparts parties of the project, as well as with the local community at following dates: o o o o 14 November 2007 6 December 2007 5 February 2008 26 March 2008

Reports of each of the Field Trips were prepared and can be found in the respective attachments of the Inception Report (first two missions reports), the Interim Report (third mission report) and the present Completion Report (Public Hearing report). These Field Trips Reports can also be found in Appendices 2, 3, 4, and 5.

32 Implementation of the Main Project Activities:

The project has been implemented as scheduled initially and as shown in attached Appendix 13 - Project Schedule of Activities. All following activities have been finalized, and the respective reports can be found in Part 3 from the Synthesis Report and cover following activities: o Stakeholders: 9 Meeting with local producers and cooperatives 9 Meeting with local community and local administration 9 Meeting with coconut processing industries 9 Preparation of a public hearing on 26 March 2008 o Institutional and Legal Frameworks: 9 Meetings with relevant authorities at the local and provincial level and preparation of a report on institutional legal framework in Thailand. o Potential Resources (Feedstock and .AC Markets): 9 Identification of feed stock potentials and quality 9 Identification of the potential AC market 9 Assessment of quality requirements 9 Assessment of market for water and air filters o Technology and Process: 9 Evaluation of the different technologies and processes 9 Finalization of conceptual design 9 Preparation of investment and operational budget o Preliminary Environmental Impact Assessment: 9 Emission potential evaluation 9 Pre-assessment of CDM potential o Outline of Financing Plan: 9 Economic analysis with sensitivity analysis 9 Identification of financing sources and project implementation plan Establishing a Design and Monitoring Framework (DMF):

The proposed Measurable Performance Indicators (MPI) and deliverables, which have been selected in the framework of this PDA, have all been satisfactorily achieved in the framework of this PDA, as shown herewith after: o o o Conceptual design Activity finalized; Technical and financial pre-feasibility analysis - Activity finalized; Market analysis and potential for activated carbon in Thailand and other ASEAN countries Activity finalized;

33 o o o o o Identification of potential buyers of activated carbon in Thailand and overseas Activity finalized; Identification of potential raw material suppliers in the Southern part of Thailand Activity finalized; Identification of coconut Industries in the areas around Tap Sakae that processes coconuts Activity finalized; Identification of potential for production of water filters in Thailand Activity finalized; Identification of product quality requirements - Activity finalized;

o Upscaling potential of the project in other ASEAN countries Activity finalized; (See the DMF Table in Appendix 14). Reporting of Project Activities: o Project Inception Report, has been submitted on: December 15, 2007 (Inception Report approval was received on January 17, 2008) (See Appendix 15); Project Mid-term Report, being submitted on March 03, 2008 (Mid-term report approval was received on March 14, 2008) (See Appendix 16); Project Completion Report, submitted on May 23, 2008.

o o

34

35

Appendix 1. Location Map

36

37

Appendix 1.

Map of Thailand and Prachuab Khiri Khan Province

38

39

Appendix 2. Field Visit #1- November 14, 2007

40

41

Appendix 2. 1st Field visit to Thap Sakae, Prachuab Khirikhan 14th November, 2007
11h - Meeting and Discussion with Mr. Chod Ngernthaeng, Mayor from Tap Sakae District Administration Office and his collaborators: 9 presentation of the Team and the Project; 9 discussion about the Questionnaire (see Annex 1); 9 scheduling the meeting with the Coconut Association members in the afternoon. 12h30 Lunch with Mr. Chod Ngernthaeng and his collaborators 14h Meeting with the Coconut Association members (see Annex 2 with some pictures) After a speech by Mr. Chod Ngernthaeng, president of the Coconut Association, Mr. Wanipong Manee-Noi, Chief Officer Assistant from Tap Sakae District Administration Office introduced the team members from CEERD, and the Powerpoint presentation was done by Prof. T. Lefevre (see Annex 3). A public composed with coconut growers, charcoal producers and officials of around 50 persons attended the meeting. The last slide of the presentation was opening to questions from the assistance (see Annex 4, the list of participants with the name of contributors in bold). 9 Q. When will take place the public consultation? A. Before March, may be in January/February 2008, will take place Provincial public hearings. 9 Q. Will we have more information about the project before them? A. Yes, a document in Thai language will be prepared and distributed before the Public hearings. 9 Q. For charcoal procurement will you deal on a case by case basis with local producers, or will you turn to a middleman? A. Because of the volumes being processed, the supply of charcoal will have to be done on a large scale. A middleman will most probably be needed, or local producers could be encouraged to set up a supplying cooperative that will pool their production and carry out the trading and logistical supply of charcoal. This solution could be very promising as it will allow in an easy way to train charcoal producers on production techniques. 9 C. The next issue is about the quality of locally produced charcoal: because open drums being used, the process cannot be closely controlled, the charcoal quality is not regular and at least 10% of the product is lost lowering benefits as well. 9 C. Larger quantities being processed allow for flue gas treatment that can be used for steam generation and/or electricity production. 9 C. The plant could start with a part only of its capacity for activating charcoal, and the remaining capacity starting from coconut shell as a pilot project to improve the quality of charcoal produced in the region (training center). 9 Q. How much clean must be the shells? A. To facilitate the activation process, ie the creation of pores, the shells need to be very well cleaned and a middleman or a cooperative could be in charge to enforce a standard in this respect. 9 Q. What about the humidity level from the supply of charcoal: because of the water used to stop the carbonization process, humidity can be quite high? A. Then to measure the quantities traded, a laboratory analysis will be needed at the AC plant: the plant will buy/pay for carbon (moisture level not more than 20%), not for water!

42 9 C. As a conclusion, next public hearings will provide more information about the project to initiate a further discussion. Furthermore, the participation from the community in the project design and implementation is essential. Finally, this is a community project: the project will be due in Thap Sakae if (i) the supply of raw material (feed stocks) is available, (ii) the community is willing to be part of it, (iii) the financing is available. Then the Coconut Association President, Mr. Chod Ngernthaeng, asked the members to show their adhesion to the project and a vote by hands raising indicated that a large majority was enthusiastic to supporting the project and the plant installation. To conclude the meeting, the Association President thanked the participants and took advantage of the audience to introduce another project related to biodiesel production from coconut flesh fermentation, an additional sign of the richness of Coconut for the rural community in the region. 16h30 Visit to Mr. Chod Ngernthaeng factory (a comprehensive collection of pictures is annexed to the second field trip report) 18h00 Dinner with Mr. Chod Ngernthaeng and his collaborators 19h30 Back to Bangkok

43 Annex 1 Questionnaire 1. ACTORS IN THE REGION: Number of coconut grower Associations in Prachuap Khirikan province? Number of members in each of these associations? 2. PLANTATION AREA: What is the coconut plantation area (by district): Tap Sakae: Mueang Prachuap Khirikan: Bang Saphan: Kui Buri: Bang Saphan Noi: Pran Buri: Hua Hin: Sam Roi Yot:

What is the average number of coconut trees per Rai? What is the production of coconuts per tree and per day/month/year? How old are the trees? Is there any management plan of coconut plantations (re-plantation of coconuts of maybe other crops)? What are the other crops associated to coconut plantations (is something cultivated inbetween the coconut trees)? 3. HARVESTING & PROCESSING: How many people work is needed for coconut harvesting (per Rai)? What is the mode of harvesting? (Picking from the ground or from upper trees?) What is the frequency of harvesting (Daily, weekly, monthly)? Are there any annual variations in coconut supply? (due to seasonal change) 4. USE OF COCONUTS: Different uses of coconut: Names and eventually contact persons, address, e-mail etc. of firms related to coconut products (copra, milk, fiber, dust, charcoal)?

44 How many shells are needed to produce 1 ton of charcoal with existing used technology? What are the alternative uses of shells (cooking, heating, other) and in what quantity? Is there any additional use of fiber waste? 5. TRANSPORT What are the transportation costs by distance and by means of conveyance Truck (road) Train (rail)? Ship (sea)?

6. REGIONAL INFORMATION What is the price of the land for plant construction in Tap Sakae (Baht per Rai)? Is there availability of piece of land of 4 - 10 Rais? What is the security situation in Prachuap Khirikan province? 7. MANAGEMENT: Who could be interested in this project? How do you see the involvement of Coconut Associations in the project? Who will be the direct shareholder: President of the coconut association, the Association or the individual members of the Association? How many shares they would like to have?

45 Annex 2. Pictures from the visit

Lunch time!

Coconut processing plant where the meeting took place

Coconut Association President, Mr. Chod Ngernthaeng

46

Powerpoint presentation

Some of the speakers from the Q and A session

47

Group picture

48 Annex 3 Slides from the Powerpoint presentation

49

50

51

52

53

54 Annex 4 List of Participants from the Meeting with the Coconut Association Members Tap Sakae, 14th November, 2007
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Mr. Sang-voei Mr. Phloy Mr. Phong Mr. Suwan Mr. Boonsin Mr. Sompoch Mrs. Janthana Mrs. Mukda Mrs. Unchalee Mr. Phanom Mrs. Raphin Mr. Sukkaew Mrs. Suchada Mrs. Sunan Ms. Siriphinya Mr. Thiang Mrs. Lamphu Mrs. Kray Mrs. Amphai Mr. Somjit Mrs. Wanpen Mrs. Unchalee Mr. Phanom Mrs. Suthisa Mrs. Wanna Mrs. Somjai Mrs. Rumpoei Mr. Thonglor Mr. Janraem Mrs. Noi Mrs. Pranee Ms. Wannaporn Mrs. Chamnian Mrs. Chuoy Mrs. Thongkham Mrs. Gaysorn Ms. Duongporn Name Buathong Chuayrat Khongsri Paladchang Markprasert Sudpimsri Udomsin Laklaem Laklaem Jaemjamras Paen-In Hormchuen Daengchuong Daengchuong Srisiriwilaikul Kong-Asai Sirilak Kerdphoom Sa-ard-Rup Thongrod Kulchaikul In-Siri Chaichok Ong-Chet Tapaothong Nujabkaew Makprasert Ong-Chet Jai-song Duongyai Theu-Sin Ngernthaeng Somsri Somsri Meeyen Thiammork Thiammork No. 69/2 Moo. 5 No. 1/15 No. 6/115 No. 7 Moo. 5 No. 2/5 No. 74 No. 21/1 No. 105 Moo. 3 No. 105 Moo. 3 No. 124/1 Moo. 8 No. 15/4 Moo. 1 No. 88/2 Moo. 2 No. 90 Moo. 2 No. 90 Moo. 2 No. 78/1 Moo. 5 No. 61 Moo. 5 No. 140 Moo. 7 No. 126 Moo. 7 No. 124/1 Moo. 7 No. 9/1 Moo. 5 No. 5/2 Moo. 1 No. 16 Moo. 1 No. 43 Moo. 1 No. 71/7 Moo. 1 No. 71 Moo. 1 No. 14/16 No. 14/7 No. 71/4 No. 75 No. 43 No. 50 No. 58 No. 42/2 No. 42/2 No. 7/5 No. 44 No. 34/1 087-8223256 Address Tel

55
38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 Mrs. Wanthana Mrs. Anong Mrs. Sommai Mr. Wim Mr. Weera Ms. Khwanruen Mr. Prapat Mr. Supod Mr. Jancherd Mr. Saichon Mr. Sanom Mr. Kaew Mr. Pradith Mr. Phanlop Mr. Mana Mrs. Rattana Mr. Seththee Mr. Wanipong Kemnark Kemnark Seneewong Trilert Sirilak Phinpradup Simpha Kaewwichian Samlee Joisoi Manee-Daeng Kulchaikul Somsri Kedraksa Laila-iad Pakhapongpan Nikorachanon Manee-Noi No. 73 No. 73/1 No. 61/5 No. 118/5 Moo. 8 No. 192 Moo. 7 No. 47 Moo. 5 Owner of D. Engineering (No. 39/1 Moo. 5) No. 137/2 Moo. 1 No. 28/5 Entrepreneur (No. 37 Moo. 3, Angthong Sub-district) Village Head Moo. 7 (No.35 Moo. 6, Angthong Sub-district) No.5/2 Moo. 1 No. 33/1 Village Head Moo. 5 No. 42/2 Moo. 2 Thap Sakae District Agricultural Office Electricity Generating Authority of Thailand (EGAT) Assistant District Chief Officer of Thap Sakae District Administration Office 089-9104944 089-9195848 089-1639795

081-9814378 086-0669291 083-4251710 086-5051455 089-1267884 085-1861503 089-8238174 081-3130548 081-8986309

56

57

Appendix 3. Field Visit #2- December 6, 2007

58

59

Appendix 3. 2nd Field visit to Thap Sakae, Prachuab Khirikhan 6th December, 2007
11h - Meeting and Discussion with Mr. Chod Ngernthaeng, Mayor from Tap Sakae District Administration Office and his collaborators. The following points were mentioned and/or discussed: 9 next visit to 2 or 3 land plots available for the plant installation; 9 summing up of the project framework: o pre-feasibility study from ADB, 6 months length (however, for finalization of the present phase, April 2008 is targeted); o loan for financing the project (possible credit line); o if the project proves to be viable with community benefits, the experience could be disseminated to other places in Asia under the same financing line; o other sources of financing could be found in Thailand (SMEs). 9 in addition to the information collected with the Questionnaire (see the revised version as Annex 1, together with its translation in Thai) and Statistics for 2006 from the coconut plantations in Prachuab Khirikhan Province, some other information are provided to the visiting team along the discussion: - coconut flesh is sent daily to food industries; - there are 5 bigger coconut processors in Tap Sakae; they will be potential partners for this present project development; - local producers already provide activated carbon factories with charcoal they produce; - 500 tons of coconut shell are produced monthly in Tap Sakae; activated carbon factories already using around 50 tons of coconut shell per day; - powder resulting from the cleaning process of the shell (straw) can be compacted and sold (20 satang per kg) for using as compost, building material However, only a few % are actually sold and most of it stay on the spot, with the following problems: o bug contamination that can further infest the coconut trees in the area (because of this sanitary issue, the trading with Japan of compacted powder had to be stopped); Khun Chods company alone produce 40 tons per day of powder while big coconut growers can produce up to 100 tons per day; o risk of explosion and fire. - samples of cleaned coconut shells (5), charcoal (5 kgs), powder and fiber that are needed for analysis will be provided by Khun Chods company; - project funds can be used to training people for better practice and to improve the processes from producers to making higher quality charcoal; - if the plant process starts from coconut shell instead of charcoal, flue gas from the process could be used for steam production or producing electricity, lowering then the production costs with a very positive impact on the environment (methane emission reduction, possibility of CDM application, etc.); - the factory should rely on a pool of charcoal producers, like a cooperative of producers providing a significant volume of charcoal with a standard quality;

60 potential partners should provide their inputs for designing et setting up the factory, such as: provision of coconuts, shells or charcoal, long term agreement, price, etc.; public hearings need to be organized to inform and to collect the whole community opinions before the start of the project to avoid negative public reactions later.

As a conclusion to the meeting, a work plan for coming activities is decided as follows: 1. Production of a small brochure in Thai giving information on the project at the start of 2008; 2. Third visit to Tap Sakae: mid January to discuss with potential shareholders; 3. Fourth visit to Tap Sakae: mid February 2008, at the time of Provincial Public Hearings; 4. Finalization of the report for ADB: end of April 2008; 5. Potential discussions of financing with ADB and local shareholders: starting April 2008. 12h30 Lunch with Mr. Chod Ngernthaeng and his collaborators 14h00 - Visit to 2 potential plots available (see Annex 2) 9 the first one is located on the main road, 20 rai, with electricity and water supply, easy road access and priced 1 million baht per rai; 9 the second one, 500 meters to 1 km away, 70 rai, is close to the road with electricity posts; presenting water surfacing; priced 300,000 baht per rai. In front of it, another plot is being prepared for hosting a plant for compacting coconut shell powder (with a potential market in Europe). 14h30 Visit to Mr. Chod Ngernthaengs factory (Annex 3) plus an additional visit to a Gasifier plant and an experimental Bio-fuel plant, still in Tap Sakae district. 17h30 Back to Bangkok

61 Annex 1. Questionnaire (revised version)

1. ACTORS IN THE REGION: Number and contacts details (Name, address, telephone, fax, e-mail, etc) of coconut grower Associations in Prachuap Khirikan province? Number of members in each of these associations? Name and contact of the President of each association? 2. PLANTATION AREA IN THE PROVINCE: What is the coconut plantation area (by district): Total Number of coconuts used as food (per day, month or year) Thap Sakae Mueang Prachuap Khirikan Bang Saphan Kui Buri Bang Saphan Noi Pran Buri Hua Hin Sam Roi Yot 3. HARVESTING & PROCESSING: How many people are needed to harvest one Rai of coconut plantation? What is the total production of coconut shell in the province (in tons)? What is the volume of the present unused coconuts? And, what happens to them? 4. USE OF COCONUTS: Can you provide a list of the factories using coconuts as raw material (with names of factory, name of contact persons, address, telephone, fax, e-mail etc)? What are these factories doing with the coconut shells after they have used the coconuts? What are the alternatives uses of shells (cooking, heating, charcoal, others) and in what quantity in each category? Do coconut growers or suppliers of charcoal provide charcoal as a raw material to existing Activating Carbon Plants in Thailand? If yes, in what quantities, and for what plant? Number of coconut used for charcoal (per day, month or year) Number of coconut unused (per day, month or year)

62 5. TRANSPORT Are coconut/charcoal transported by sea? From which port? What are the transportation costs (per kg or per tons) by distance ( kilometers) and by means of conveyance Truck (road): Train (rail): Ship (sea):

What are the Deep Sea Ports available close to Thap Sakae? Please list them. How far (in kilometers) are they from Thap Sakae? 6. PLANT LOCATION Is 50 Rai land in Bang Saphan district (Government Land Class C) constructible? How far is it from the seaport? Does it have access to electricity, water? Does it have good road access? Can it be flooded? What are the other potential lands apart from the 50 Rai land in Bang Saphan district (Government Land Class C)? If possible please provide a list of other potential available lands. 7. STAKEHOLDERS Are the coconut growers, suppliers of charcoal, coconut associations willing to be involved in this project? If yes, how many and who is ready to participate in the project? Please provide a tentative list of coconut growers, companies and associations willing to be involved as shareholders. How do coconut growers, suppliers of charcoal or associations see their involvement in this project? What could they bring to the equity shareholding? What kind of warranty are they willing to provide in the long term, particularly in relation with long term prices for coconuts/coconuts shells/charcoal? How coconut growers would like to be involved in the shareholding: a. As coconut providers only? b. As coconut shell providers only c. As charcoal providers only? d. As project shareholders? What is the national and/or local administration willingness to be involved in the project? How could they support the project? What? How? Who? How could a public hearing be organized in relation with the charcoal plant concept, design, construction and operation? Where? When? With who?

63 Annex 1 bis. Thai version of the Questionnaire

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3.

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66 Annex 2. Visit to 2 potential plots for the factory installation

First plot: 20 rai, along the main road, priced 1 million baht per rai

Second plot: 70 rai, along a secondary road; priced 300,000 baht per rai

67 Second plot (continued)

68 Annex 3. Visit to a Coconut shell charcoal factory

There are 5 manufacturers of coconut shell charcoal in Tap Sakae district. They all use the same technique for making charcoal. The process described below is illustrated with pictures from Mr. Chod Ngernthaengs factory.

Coconuts being delivered in bulk

First, husk is removed manually. You can see on the picture above the way it is done. A sharp knife fixed on vertical stick is used to remove the outer (fiber) shell, by downward movement.

69 Later, the inner (hard) shell is also removed manually, using a small axe.

The hard shell is now ready for carbonization. Carbonization carbonaceous is It a is

process of impartial burning of materials. done in barrels (picture next page) by burning the shells for approximately 8h. As both quality and volume of charcoal depend on how air is well controlled during the burning process, this technique has poor yield and gives low quality end products as well. In addition, the gases generated which could be used as combustible, are also lost in the atmosphere creating an environmental hazard. Charcoal manufacture could be done quality with and kilns quantity specially of end designed instead. Thus, both product would be improved.

70

Later, charcoal is crushed and passed through a screen where ash is separated.

Charcoal starch charcoal and

is

mixed

with into These

compacted briquettes.

briquettes are sold for barbecue and cooking devices at a price of 10 Baht per kg ($1=33B)

71 The residues from Coconut processing can be partially used.

Copras brown skin is used in coconut oil production (skin is put into the water, boiled and the coconut oil is simply skimmed off).

Coconut flesh is washed before being collected (every day) to be processed by the food industry.

Debris of copra are dried in smoke-drying kiln and sold for biodiesel production.

72

Coconut shell is used to fuel the kiln.

At the start of the whole process, husk is removed and then hackled to extract the fiber. The fiber is baled and sold abroad for furniture industry. However, producers complain about the price that felt down, from 15 Baht per kg last year to 10 Baht now.

At

this

stage,

huge

quantity of fiber dust (powder) is being produced (see picture next page). The outer shell contains approximately 33% of fiber and 66% of dust. Dozens of tons of dust are produced daily by each charcoal manufacturer in Tap Sakae district. The dust is used in a very small scale for production of fertilizers, while most of it remains unexploited.

73

It may be possible to add value to this residue by using it as a fuel at the Activated Carbon factory.

Visit to a Gasifier plant in the District of Tap Sakae, an experimental project for producing electricity (from the Department of Alternative Energy Energy. Development and Efficiency (DEDE), Ministry of

74

75

76

Visit to a bio-diesel production plant from copra in the District of Tap Sakae.

77

Appendix 4. Field Visit #3- February 5, 2008

78

79

Appendix 4:

Third Field Visit to Thap Sakae District

FIELD VISIT TO THAP SAKAE, PRACHUAB KHIRIKHAN PROVINCE FEBRUARY 5TH, 2008

MINUTES
List of Participants From CEERD Mrs. Wipapan Herman Prof. Thierry Lefvre Mr. Yves Le Marier Mr. Franois Lefvre From Thap Sakae Mr. Surapun Tung Kao Tong Mr. Pitchakorn Rojwattanawong Mr. Boonchuay Krinhom Ms. Khwanruen Phinpradup Mr. Chod Ngernthaeng

CEERD team arrived in Thap Sakae at 10.45am. As scheduled, a meeting with Mr. Chod Ngernthaeng, (Mayor of Thap Sakae Sub district Administration Organization) and Mr. Surapun Tung Kao Tong (assistant of Mr. Chod Ngernthaeng) took place at his office. The following points were discussed and agreed on:

1. Brochure of the project: the draft brochure was presented to local authorities and some comments were made on its content (possible additional comments will be given by Thap Sakae local authorities following the field trip). The brochure needs to be updated as follows: i. Project Land size (~40-50 Rai) ii. Project Number of worker (~80 persons) iii. Project AC plant production per day (~10 tons) iv. Project charcoal or raw coconut shell processed per day (~20 tons of charcoal or ~100 tons of raw coconut shell) v. Local authorities credits: will be added to the brochure vi. The brochures will be sent to Mr. Chod Ngernthaeng the 1st week of March 2008. 2. Market and technical data confirmation: the following data was updated by Mr. Chod Ngernthaeng (present market values): i. Coconut fiber price: 5 baht/Kg (previously, 15 baht before Coup Dtat) ii. Coconut shell price: 3 baht/Kg iii. Charcoal price: 7 baht/Kg iv. Coconut wholesale price (to Korat/Bangkok): 7.2 baht/piece (On one hand, coconut price tends to increase every 3 years because of a temporary slight fall in the output of the coconut trees. On the other hand smuggled coconut into Thailand

80 (from Cambodia, Philippines etc) produces the opposite effect and reduces the overall coconut price.) v. Average coconut cost: 3.5 baht to 4 baht/per piece (bought to grower) vi. Average coconut tree output: 10 coconuts/month vii. Coconut trees per Rai inThap Sakae district (~16.000Sqm): 20 to 25 trees viii. Average coconut weight: 2.5 Kg to 3 Kg/piece ix. Shell weight per coconut: 300 Gr/piece (~10% of whole coconut weight) 3. Public hearing: i. The public hearing was set to take place on Wednesday, March 26, 2008 in the Thap Sakae sub-district Administration Organization meeting room ii. Mr. Chod Ngernthaeng confirmed that an invitation letter along with the brochure would be sent to the district general local population for initial awareness. An average of 200 persons are expected to attend the public hearing.

A lunch was then organized with all morning participants. At 14.30h, a 2nd meeting was organized this time between CEERD and the potential partners and shareholders of the project. In principle, the following points were discussed and agreed on:

4. The Shareholding: i. Partnership: It was discussed and in principle decided which associations and potential partners would be ready to be involved in the project. The following persons and associations are: Mr. Chod Ngernthaeng Head of coconut grower agricultural group of Thap Sakae District Address: 58 Moo 5, Thap Sakae Sub-district, Thap Sakae District, Ms. Khwanruen Phinpradup Head of House-wife group of charcoal producer Address: 47 Moo 5, Thap Sakae Sub-district, Thap Sakae District, Prachup Khiri Khan Mr. Boonchuay Krinhom Shell Charcoal Producer Address: 58 Moo 5, Thap Sakae Sub-district, Thap Sakae District, Prachup Khiri Khan Mr. Pitchakorn Rojwattanawong Entrepreneur Grower + Buyer Address: 78/2 Moo 5, Thap Sakae Sub-district, Thap Sakae District, Prachup Khiri Khan

ii. Cash contribution: it was discussed the possibility of raising money among the associations in order to participate to the shareholding. Individuals however, dont seem to be willing to make any cash contribution. iii. Land: several possibilities of acquiring the land were discussed. Among all, leasing seems the most appropriate one. Further information on leasing length time is necessary. Mr. Chod Ngernthaeng also informed that he could put his own land as his shareholding share in the business.

81 iv. Long-term supply and price agreement: Mr. Chod Ngernthaeng informed that longterm supply and price agreements could be reached in line with Thai law. These agreements could be seen as a contribution and therefore could be valued in the future shareholding v. The shareholding of each organization and individual shareholders will be evaluated later in relation with the value of the contribution given by each party to the project 5. Information needed that could possibly be provided by Mr. Chod Ngernthaeng: i. Meteorological and seismic reports; soil analysis; Map of Thap Sakae ii. Accessibility to a high voltage electrical line (20 KV) iii. Authorizations to build a factory on Thap Sakae land (status of the land) iv. Identification of Potential local private investor interested in the project v. A full list of the associations members The field trip was adjourned at 4.30h p.m. and CEERD staff drove back to Bangkok

82

83

Appendix 5. Public Hearing Report March 26, 2008

84

85

Appendix 5. Public Hearing Report On Activated Carbon Production Facility


In Tap Sakae, Prachuab Khiri Khan Province, Thailand March 26, 2008 Organized by: Time & Place: CEERD and Tap Sakae Subdistrict Administration Organization The Public Hearing took place on Wednesday March 26, 2008 at 8.30 a.m. in the meeting room at Tap Sakae Subdistrict Administration Organization Prof. Thierry Lefevre, Project Coordinator Mrs. Wipapan Herman, Project Community Coordinator and Interpreter; Mr. Francois Lefevre, Project Marketing Expert From the Tap Sakae Municipality: Mr. Chod Ngerntaeng, Mayor of Tap Sakae Subdistrict Administration Organization Mr. Surapun Tung Kao Tong, Assistant Mayor of Tap Sakae Subdistrict, and Project Agricultural Expert Mr. Suntorn Skul-In, District Manager, PEA Mr. Surin Prasertwatthana, District Agriculture Officer, Ministry of Agriculture From the Tap Sakae Subdistrict, Khao Lan Subdistrict, and Saeng Arun Subdistrict Communities: See list of participants in Annex 1 Report of the Event: The public hearing on the possibility of an Activated Carbon Production Facility in Tap Sakae District was part of the pre-feasibility study of the Activated Carbon project supported by ADB. The date for this public hearing was set and agreed upon by CEERD and Tap Sakae Subdistrict Administration Organization at their last meeting in Tap Sakae on February 5, 2008. Prior to the scheduled date for this Public Hearing, the following arrangements were made. 1. Agenda of the Public Hearing prepared and sent to the Mayor of Tap Sakae Subdistrict Administration Organization (Annex 2); 2. Letter of invitation to the Public Hearing by the Mayor of Tap Sakae Subdistrict Administration Organization (Annex 3); 3. Registration Form and Questionnaire for the Public Hearing prepared by CEERD (Annex 4); 4. Brochure to introduce the Activated Carbon Project prepared and printed by CEERD and distributed to the community two weeks before the public hearing (See Appendix 6-a and 6-b to the Synthesis Report);

Participants: From CEERD:

86 5. Power point for the presentation of Activated Carbon Production Facility in Tap Sakae, Thailand prepared by CEERD (Annex 5); 6. Lunch and coffee break snacks for 140 participants (all participants were invited by CEERD); 7. Travel arrangements for CEERDs staff from Bangkok to Tap Sakae on March 26, 2008. CEERDs team left Bangkok at 4.00 a.m. on March 26, 2008 and arrived at Tap Sakae Subdistrict Administration Organization at 8.00 a.m. Around 8.30 a.m., residents of Tap Sakae Subdistrict, Khao Lan Subdistrict, and Saeng Arun Subdistrict started to file in and fill out the registration forms. All participants proceeded to the meeting room on the second floor. The meeting was called to order by Mr. Chod Ngerntaeng, Mayor of Tap Sakae Subdistrict Administration Organization, at 9.30 a.m., thirty minutes later than originally scheduled. Present on the stage along with Mr. Chod were Prof. Thierry Lefevre, the Coordinator and presenter of the project, Mrs. Wipapan Herman, Project Community Coordinator and interpreter, Mr. Surin Prasertwatthana, the District Agriculture Officer and Mr. Suntorn Skul-In, the District Manager of Provincial Electricity Authority. After an opening speech and an introduction of speakers on the panel made by Mr. Chod, Prof. Thierry Lefevre started his presentation on the Activated Carbon Production Facility. Mrs. Wipapan Herman did the simultaneous translation of the presentation. After Prof. Lefevres presentation, the two government officials on the panel were invited to present their respective statistics on the local coconut production and on the local power capacity, both factors are crucial to the size of the activated carbon production. Following the project presentation, the forum was opened. While the activity was in progress, coffee and snacks were served inside the meeting room. Participants from local communities had shown considerable interests. The questions and remarks made by the participants included: Question: Whether there would be a written certification to guarantee that the project was environment friendly and would not produce air pollutants; Answer: Prof. Lefevre answered that the technology to be used in the production of activated carbon does not involve any chemical use and in addition all flue gases would be captured, filtered and eventually re-used in the process, particularly to produce the process steam. Therefore, there would be no environmental impacts or damages done to the surrounding communities. The project which would involve the community in its shareholding would be the guarantor that such impacts do not occur. Question: Whether the project would increase their income and enhance their livelihood; Answer: If the project is developed as scheduled, there will be approximately 40 to 180 persons from the surrounding community (depending on the final design and size of the factory) working in the factory.

87 Question: Whether they would get better prices for their coconut production; Answer: In fact, the price of the coconut production depends on the market equilibrium (demand/offer); however, the project will guarantee stable and regular acquisition of coconuts at a guaranteed price (long term contract) which will ensure the community stable incomes. In addition, as the community will be involved in the shareholding of the project, additional incomes will come from the activated carbon trade. Recommendation: The district should consider having a written official record of local coconut production. Answer: All participants agreed that it would be a good idea and should be implemented. Remarks: A very positive remark was made by one of the prominent personalities of the community who told the other participants that the Activated Carbon Project would be beneficial to Tap Sakae and the local residents. This gentleman, a former chief of Provincial Public Health Office, has been interested and is knowledgeable on environmental issues and their effects on the health of the public. He gave his support to this project and would like to be one of the shareholders. He even made suggestions on how the coconut growers and the general public could be parts of this project. The Presentation and the Open Forum adjourned at 12.30. Participants gave their answers to the questionnaire to Tap Sakae Subdistrict Administration Organization officers (see Analysis in Annex 7). All participants and guests were invited to a buffet lunch and coconut ice cream inside the Tap Sakae Subdistrict Administration Organization compound. At 2.00 p.m. further discussions were held between CEERD and Mr. Chod to clarify certain aspects of the project which included: (i) More accurate and official figures on the coconut production in each District and related Sub-districts of Prachuab Khiri Khan Province; (ii) Mr. Chod was asked additional questions concerning: 9 Other coconut industries and their utilization of coconut residues (shells, coco-pith, etc.); 9 Quantity of unused coconuts; 9 Potential for improvement of coconut and charcoal production. This information is important to determine the feasibility of the activated carbon project and the size of the facility. Mr. Chod promised to get the official statistics of the coconut production in Prachuab Khiri Khan (including Districts and Sub-districts) from the Provincial Agriculture Office on Friday 28, 2008. (see Questionnaire and answers in Annex 6) CEERD team left Tap Sakae Subdistrict Administration Organization at 3.20 p.m. and arrived in Bangkok at 8.30 p.m.

88 Open Forum Main Conclusions The results of the Public Hearing conducted in Tap Sakae District on March 26, 2008 in relation with the potential development of an activated carbon project in Thap Sakae District was very positive, as it is shown in the analysis of the questionnaire handed over to the participants of the public hearing at the start of the event. Annex 7 shows the analysis of the results of the answers to the questionnaire given to all participants to the Open Forum. The analysis shows that the great majority of the participants is favorable to the development of the project in their community, and also thinks that the project is beneficial to their community. Most of the participants expressed their interest to be involved in the project; 9 as employees; 9 in their capacity of coconut growers; and 9 as workers in the factory. Finally, only one negative comment was done in relation with potential environmental impacts that the project might have.

89

ANNEX 1
List of Participants
No
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Ms. Sunan Mr. Thawin Mrs. Sommai Mr. Cheun Mrs. Chalong Mr. Plord Mr. Kul Mr. Raem Mr. Jongkol Mr. Somjit Thongpad Mrs. Kamsuan Mr. Prasit Mrs. Prathum Mrs. Kim Ms. Wanwisa Sommart Suporn Mr. Sompong Ms. Duangdeun Mrs. Jan Mr. Sutin Mr. Wirat Mr. Thongbai Mr. Tri Mr. Thiang Mr. Supod Ms. Wannaporn Mrs. Boontham Mr. Boonsri Ms. Siriphinya Mr. Somsak Mr. Jumpod Mr. Larb Mr. Khamron Mr. Damrong Mr. Jancherd Mrs. Nontreeya Nawakitworakan Pimsor Seneewong Phodyon Krataited Sukdaeng Punthasen Ong-Chet Inrung Thongrod Praypeth Sriworathairat Tummol Noimuang Noimuang Jankong Janpook Noipol Watyai Kamkaew Hermthua Hermthua Sudtha Sujaritrak Thiammork Kong-Asai Kaewwichian Ngernthaeng Kedraksa Tiwaporn Srisiriwilaikul Khamjing Prasertying Kongkaew Huayhongthong Srisarn Samlee Sukawadee

Name

Address

ID Card No.

No. 61 Moo. 5 No. 22/2 Moo. 5 No. 61/5 Moo. 5 No. 126/1 Moo. 7 No. 12/3 Moo. 5 No. 10/2 Moo. 5 No. 66/1 Moo. 5 No. 155/1 Moo. 1 No. 10 Moo. 5 No. 9/1 Moo 5 No. 72 Moo. 5 No. 9/3 Moo. 5 No. 71/3 Moo. 5 No. 73/2 Moo. 5 No. 71 Moo. 5 No. 817 Moo. 5 No. 5/6 Moo. 5 No. 11/4 Moo. 5 No. 11/1 Moo. 5 No. 9 Moo. 5 No. 73 Moo 5 No. 73 Moo 5 No. 116/2 Moo. 8 No. 60 Moo. 1 No. 44 Moo. 1 No. 61 Moo. 5 No. 137/2 Moo. 1 No. 58 Moo. 5 No. 4/1 Moo. 5 No. 60/5 Moo. 5 No. 78/1 Moo. 5 No. 116 Moo. 8 No. 9/8 Moo. 5 No. 63/3 Moo. 5 No. 22/6 Moo. 5 No. 10/4 Moo. 1 No. 28/5 Moo. 5 No. 161 Moo. 7

Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict
3 7703 00082 66 3 3 7705 00036 35 5 3 7703 00036 10 6 3 7703 00107 77 1 3 7703 00134 48 5 3 7703 00491 10 5 3 7703 00203 27 4 0 3860 20023 00 1 3 7703 00202 62 6 3 7703 00121 22 7 3 7703 00092 01 4 3 7703 00134 53 1 3 7703 00051 61 4 3 7703 00042 27 1 3 7703 00011 61 8 3 7703 00005 71 5 3 4507 00024 11 6 3 7704 00242 31 0 3 7703 00010 78 6 3 7703 00079 87 5 3 7703 00070 88 6 3 7703 00073 12 5 3 7703 00134 98 1 3 7703 00151 88 6 3 7703 00042 23 8 3 7703 00011 64 2

90
No
39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 Mrs. Amphai Mr. Sumrerng Mrs. Somjeen Mr. Paitoon Ms. Saengjan Mrs. Tia Mr. Chod Mr. Payom Mr. Boonruam Mrs. Wanna Mrs. Mukda Mrs. Gaysorn Mr. Aran Mr. Ra-Chan Ms. Duangporn Ms. Wilai Mrs. Boonchuoy Mr. Prasert Mr. Ong-Art Ms. Jaree Ms. Ratee Ms. Netdao Ms. Warunee Mr. Chamlong Mrs. Nokyung Mrs. Kham Mr. Phitchakorn Ms. Patcharee Mr. Surapan Ms. Chotima Ms. Wassana Ms. Pantima Ms. Nampung Ms. Sasithorn Ms. Jittra Ms. Weerawan Mr. Panlop Sa-ngiam Mr. Panlop Mrs. Kanya Mr. Wiwat Mrs. Angkana Ms. Sukanda Chusri Sa-ard-Rup Khamjing Khamjing Jongjitdungjong Malichuen Noiphol Ngernthaeng Chuasong Duangyai Tapaothong Larlaeng Thiammork Yaem-Kerd Honchaiya Thiammork Thiammork Thong-Noi Boontham Sri-Anan Prammanee Noi-Pol Ngernthaeng Yim-Tha Ngernthaeng Singkharn Jan-Ton-Thoa Rojwattanawong Tapaothong Tangkhaothong Thord-Sanit Khamklay Rangsikul Krut-Pheuak Phetwanpen Marasri Auttamana Kedraksa Thongnoi Sailaiad Ruenreang Bing-Lorm Suk-Aeim Trisuwan Yeepair

Name

Address

ID Card No.
3 7703 00203 28 2 3 7703 00302 08 6

No. 124/1 Moo. 7 No. 116/2 Moo. 8 No. 159/1 Moo. 7 No. 377 Moo. 10 No. 66 Moo. 5 No. 15 Moo. 5 No. 58/1 Moo. 5 No. 175/1 Moo. 7 No. 63/5 Moo. 5 No. 71 Moo. 1 No. 1/5 Moo. 1 No. 44 Moo. 1 No. 137 Moo. 1 No. 128 Moo. 7 No. 34/1 Moo. 1 No. 34 Moo. 1 No. 10/16 Moo. 5 No. 156/1 Moo. 1 No. 10/12 Moo. 5 No. 74/1 Moo. 5 No. 13/3 Moo. 5 No. 58/1 Moo. 5 No. 58/3 Moo. 5 No. 58 Moo. 5 No. 58/3 Moo. 5 No. 55/6 Moo. 5 No. 78/2 Moo. 5 No. 71 Moo. 1 No. 123/4 Moo. 2 No. 68/3 Moo. 6 No. 50/1 Moo. 5 No. 1 Moo. 1 No. 13/1 Moo. 5 No. 153/1 Moo. 1 No. 1 Moo. 1 No. 89 No. 5/5 Moo. 5 No. 10/16 Moo. 5 No. 105/1 Moo. 5 No. 27/1 Moo. 6 No. 28 Moo. 6 No. 110/9 Moo. 6 No. 109/4 Moo. 6 No.65/3 Moo. 4

Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Tap Sakae Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict
3 7703 00361 88 1 3 7703 00080 08 3 3 7703 00061 28 3 3 7703 00061 27 5 3 7703 00121 88 0 3 7703 00092 02 2 3 7703 00134 89 2 3 7703 00043 21 8 3 7703 00134 01 9

91
No
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 Saranya Mr. Panomkorn Mr. Chamnan Ms. Nisanart Mrs. Duan Ms. Jit Ms. Suparb Mr. Chaluay Sa-ard Mr. Siri Mrs. Sunee Ms. Wassana Mrs. Wannee Ms. Wilairat Mrs. Wilaiwan Ms. Ruangtip Mrs. Siriporn Ms. Nittaya Ms. Patcharada Ms. Kanjana Mrs. Thiang Mr. Preecha Mr. Amnart Pol. Cpl. Adisak Mrs. Janpen Mr. Sawong Mr. Manop Mrs. Sunee Sai-Fon Mrs. Pensri Ms. Saipin Mrs. Varaporn Sai-Sunee Ms. Khwanruen Mr. Apiwiwat Mr. Thonglor Mr. Phusit Mr. Poj Mrs. Pranee Mr. Surasak Mr. Sunthorn Rojwattanawong Laolukkanalert Sudpimsri Meesak Meesak Sangkham Sangkham Meesak Anukulpracha Phuak-Phong Yensai Daengjoi Phuak-Phong Satthaporn Paisamlee Pinyo Yensai Dee-Hom Thongmon Khong-Aum Ngarmlaluk Sangchung Ruoyruan Tokilp Thiammork Ngamlaluk Wongpin Wongpin In-Jang Phuamsem Hoy-Muk Montha-Ruang Hoy-Muk Phinpradup Hai-nuch Ong-Chet Ousap Puenchod Theu-Sin Payonsiri Sakul-In

Name

Address

ID Card No.
3 7703 00492 10 1 3 7703 00290 81 9 3 7703 00290 87 8

..

No. 21Moo. 4 No. 99/9 Moo. 6 No. 27 Moo. 6 No. 28 Moo. 6 No. 28 Moo. 6 No. 158 Moo. 7 No. 158 Moo. 7 No. 28 Moo. 6 No. 104 Moo. 6 No. 21/90 Moo. 5 No. 55/2 Moo. 2 No. 60 Moo. 2 No. 51/4 Moo. 2 No.161 Moo. 7 No. 83/5 Moo. 6 No. 171/3 Moo. 7 No. 55/2 Moo. 2 No. 130/1 Moo. 8 No. 103/3 Moo. 6 No. 20/1 Moo. 3 No. 85 Moo.6 No. 88/1 Moo. 6 No. 5 Moo. 6 No. 83 Moo. 5 No. 52/4 Moo. 6 No. 89/2 Moo. 6 No. 115/1 Moo. 6 No. 145/3 Moo. 6 No. 49/5 No. 97 Moo. 13 No. 132/12 Moo. 2 No. 126/1 Moo. 3 No. 100/3 Moo. 12 No. 47 Moo. 5 No. 116/2 No. 71/4 Moo. 1 No. 715 Moo. 5 No. 71/2 Moo. 1 No. 50 No. 1 Moo. 1

Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Khao Lan Subdistrict Saeng Arun Subdistrict Saeng Arun Subdistrict Saeng Arun Subdistrict Saeng Arun Subdistrict Saeng Arun Subdistrict Saeng Arun Subdistrict Saeng Arun Subdistrict Saeng Arun Subdistrict Saeng Arun Subdistrict Nahukwang Subdistrict Nahukwang Subdistrict Nahukwang Subdistrict Nahukwang Subdistrict
3 7703 00494 48 1 3 7703 00491 73 3 3 7703 00146 86 6

3 7703 00024 49 3 3 7703 00416 81 2

3 7705 00230 85 2

3 7703 00367 76 5 3 7798 00097 78 1 3 7703 00121 87 9 3 7703 00025 85 6 3 7703 00312 22 7 3 7703 00104 39 0 3 7701 00136 77 8

92
No
124 125 Mr. Surin Mr. Khanong Prasertwatthana Thongmon

Name

Address

ID Card No.

93

ANNEX 2
Field Visit Agenda
Wednesday, March 26, 2008
04:00 08:00 08:30-09.00 Departure from CEERD office, Saladaeng 1 Arrival at Tap Sakae Registration at Tap Sakae Subdistrict Administration Organization Office Project Presentation / Project Discussion Questions & Answers Coffee Break Public Hearing Questions & Answers Lunch (all participants and staff are invited) Discussion with Khun Chod about the feed back/results, etc. of this public hearing Departure from Tap Sakae Arrival at CEERD office

09.00-10.00

10.00-10.30 10.30-12.00

12.00 14.00

15.00 20.00

94

ANNEX 3
(Garuda) No. 73601/1298 Tap Sakae Subdistrict Administration Organization Tap Sakae District, Prachuab Khiri Khan 77130

17 March 2008

Subject: Attention:

Invitation to the Public Hearing District Agriculture Officer, Subdistrict Agriculture Officer, Tap Sakae PEA Manager Project Brochure

Attachment:

Contracted and funded by the Asian Development Bank (ADB) to conduct a pre-feasibility study for activated carbon production from coconut charcoal in Tap Sakae District, Prachuab Khiri Khan Province, Centre for Energy Environment Resources Development (CEERD) has been in contact and discussing on various occasions with Tap Sakae Subdistrict Administration Organization on the possibility of the project to set up a factory to produce activated carbon and water filters in Tap Sakae District. In order to justify that the said project is truly needed and welcomed by the Tap Sakae communities, members of Tap Sakae public are therefore invited to participate in the District Public Hearing meeting on March 26, 2008, from 9.00 to 12.00 at Tap Sakae Subdistrict Administration Organization. I would appreciate your kind cooperation to be present at this Public Hearing on the date specified.

Yours truly,

Mr. Chod Ngernthaeng Mayor of Tap Sakae Subdistrict Administration Organization / President of Tap Sakae Coconut Growers Group

Tap Sakae Subdistrict Administration Organization Tel: 032-671255 Fax: 032-671255

95

ANNEX 3 (Cont.)

73601/1298 17 2551

77130

, , 1. 1

(CEERD) (ADB) (CEERD) 26 2551 09.00 .

.032 671255 .032 - 671255

96

ANNEX 4
Registration Form PUBLIC HEARING
On the project for Activated Carbon and Water Filter Factory In Tap Sakae District, Prachuab Khiri Khan Province

1. Participant (please print your full name and particulars): I, (Mr/Mrs/Miss)Last name........ Home address: No..Moo..Street.Tambon... District.ProvincePostal code..... Profession.TelephoneMobile.... would like to participate in the Public Hearing and express my view concerning the impacts of the activated carbon and water filter production project which may affect the environment and the livelihood of the people living nearby or in the community of Tap Sakae District, Prachuab Khiri Khan Province. 2. Day, Time and Venue: on March 26, 2008 from 9.00 to 12.00 at Tap Sakae Subdistrict Administration Organization Tap Sakae District, Prachuab Khiri Khan Province 3. Category of Participant: Please tick 3 in (can choose more than one) Tap Sakae coconut growers group Residents of Moo 5, Tambon Tab Sakae, Tab Sakae District, Prachuab Khiri Khan Province Producer of charcoal from coconut shell, Tab Sakae District, Prachuab Khiri Khan Province Official from Government units in Tab Sakae District, Prachuab Khiri Khan Province Others (Please name...)

Signature Date

97

ANNEX 4 (Cont.)
Questionnaire
1. Do you think this project will be useful for coconut growers of Tab Sakae District?

Yes

No

2. Are you willing to set up a factory in Tab Sakae District?

Yes

No

3. How would you like to be involved in the project?

Co-investor Coconut shell provider Coconut charcoal provider Others..(Employee recruitment)


4. If you disagreed with this project, please give the reasons:

.................................................................................................................................................. ................................................................................................................................................................ ................................................................................................................................................................ ................................................................................................................................................................

98

ANNEX 4 (Cont.)

1. ( ): (//)............................................................................................ ................................................................................................................... ................................................................................................................ .......................................................................................................................... , 2. : 26 2551 9.00 12.00 .

3. : 3 ( 1 ) 5 ( ..............................................................................)

.......................................................... .........................................

99

ANNEX 4 (Cont.)

1. 2. 3. 4. ................................................................................................................................................................................................... ..................................................................................................................................................................................................................... ..................................................................................................................................................................................................................... ......................................()

100

ANNEX 5

-
ACTIVATED CARBON PRODUCTION FACILITY
THAP SAKAE - THAILAND

By CEERD Co., Ltd.

The Project Concept


To add value to local coconut cultivation by setting up an Activated Carbon and Water Filter Factory using coconut charcoal as raw material

()
The Mission

To process coconut shell or coconut charcoal for the manufacture of Activated Carbon.

To support and to give contribution in creating the self-reliance of Thailand people in mastering a recycling technology


To encourage and push the growth of Small Scale Business in the field of Integrated Industry

101

ANNEX 5 (Cont.)

What Whats Activated Carbon?


Its a highly absorbent carbon obtained by a physical or chemical reaction, resulting in a highly porous form with a very large surface area. It is used primarily for purifying water, air and gases by adsorption, solvent recovery, or deodorization and as an antidote to certain poisons.

Why coconut


Superior quality because of small macro pores structure

/
More effective for the adsorption of gas/ vapour and for the removal of colour and odour of compounds.

Process

Coconut Shell

Coconut Charcoal

Activated Carbon

Used in Water filters

102

ANNEX 5 (Cont.)

Country and area selection


Thailand is one of the largest producers of coconut

.. 2547
Thap Sakea is one of Thailands biggest coconut production areas and part of the coconut production is still unprocessed, however the production of coconut has been decreasing in Thailand since 2004


Reduced transportations costs of raw material


Not far from sea ports

Project Impacts

- (Socio-economic) (+)
(Income increase) (Job opportunities) (Increased stability and reinforce (Transfer of knowledge & (Development of alternative synergetic
skills to local community) cultures) coconut production)

(Environmental Impact) (0)


(No negative impact for the environment, as this kind of industry does not

(Others) (-)

produce residual waste.)


(Promotion of Palm Oil culture could have a negative effect on coconut production)

Technology


The technology used in the production of Activated Carbon is easily managed with trained local personnel


Flue gases from the activation phase can be recycled to generate steam for the process.


Easy maintenance

103

ANNEX 5 (Cont.)

Project Stakeholders & Partners

Stakeholders


Local and National Administration


Local Community

Coconut Growers Associations

/
Private / Individual Partners


Others

-
Partners - Company Owners

: (1)
Project Facts: The Situation (1)

Coconut production in Thailand


2,200,000 2,100,000 2,000,000 1,900,000 1,800,000 1,700,000 1,600,000 1,500,000 2003 2004 2005 2006 2007 2008 (Prev.)

Planted Area (Rai) Harvested Area (Rai) Production (Tons)

: (2)
Project Facts: The Situation (2)


Coconut production in Prachuap Khiri Khan province
580,000 560,000 540,000 520,000 500,000 480,000 460,000 440,000 420,000 400,000 2003 2004 2005 2006 2007

Planted Area (Rai) Harvested Area (Rai) Production (Tons)

104

ANNEX 5 (Cont.)

: (3)
Project Facts: The Situation (3)

Coconut production in Thap Sakae district


160,000 150,000 140,000 130,000

Planted Area (Rai)


120,000 110,000 100,000 90,000 80,000 2003 2004 2005 2006 2007

Harvested Area (Rai) Production (Tons)

: (4)
Project Facts: The Situation (4)

()
Estimated production of inner shell in Prachuap Khiri Khan province (in tons)
Daily Shell Production Potential based on annual coconut production (tons) Total Coconut Production (Tons) Daily coconut production (Tons) 10% 12%

2003 2004 2005 2006 2007

552,876 558,256 485,596 483,731 463,693

1,515 1,529 1,330 1,325 1,270

151 153 133 133 127

182 184 160 159 152

: (5)
Project Facts: The Situation (5)

()
Estimated production of inner shell in Thap Sakae district (in tons)
Daily Shell Production Potential based on annual coconut production (tons) Total Coconut Production (Tons) Daily coconut production (Tons) 10% 12%

2003 2004 2005 2006 2007

103,847 102,497 91,190 91,295 128,089

285 281 250 250 351

28 28 25 25 35

34 34 30 30 42

105

ANNEX 5 (Cont.)

106

ANNEX 5 (Cont.)

107

ANNEX 5 (Cont.)

108

ANNEX 5 (Cont.)

109

ANNEX 5 (Cont.)

110

ANNEX 6 / Questionnaire
/ Options: Do we produce charcoal and then activate it? / Answer: We would like to sell coconut shell and coconut charcoal to factory for producing activated carbon. Do we activate already available charcoal produced by charcoal suppliers? / Answer: 100% We would like to sell 100% completed piece of charcoal to activated carbon factory. Do we do both?

( ) What are the possibilities to improve the quality of charcoal in the district? (training center?) / Answer: We would like to bring the producer of charcoal from coconut shell to be trained and studied the activities at Lampoon province , ( , , , , , ) Can you provide a list of the factories in all Prachuab Khiri Khan Province using coconuts as raw material (with names of factory, name of contact persons, address, telephone, fax, e-mail etc)? / Answer: 1 See Annex 1

111

ANNEX 6 (Cont.)
What are these factories doing with the coconut shells after they have used the coconuts? / Answer: Nothing and/or fuel (, , ) What are the alternatives uses of shells (cooking, heating, charcoal, others) and in what quantity in each category? / Answer: 0.5% All uses of shells indicated above. The quantity is not over than 0.5% of raw material. Do coconut growers or suppliers of charcoal provide charcoal as a raw material to existing Activating Carbon Plants in Thailand? If yes, in what quantities, and for what plant? / Answer: () ( ) 1) . 2) . Coconut growers are not seller. Merchant middleman will purchase the raw material (charcoal) from coconut growers to provide to the factory. We do not know the exactly quantities. The middleman companies are 1) Carbonkarn, Chonburi province; 2) Srijai,Nakornratchasima province. (/) What is the production of charcoal from coconut in the province of Prachuap Khiri Khan and in all districts of Prachuab Khiri Khan? / Answer: . (Tap Sakae District) = 7,200 tons . (Bang Sapan District) = 7,200 tons . (Muang District) = 5,000 tons

112

ANNEX 6 (Cont.)
. (Bang Sapan Noi District) . (Kui Buri District) (Total) = = = 3,000 tons 2,000 tons 24,400 tons

(, , ) How much of the province coconut production is really processed (for food industry, oil, charcoal, etc)? What is done with the rest? / Answer: 500,000 30 // = 15 = 180 500,000 Rai of coconut plantation provides 30 coconuts/Rai/month = 15 million coconuts/month = 180 million coconuts/year For Tap Sakae: 150,000 Rai of coconut plantation with 20 Trees per Rai, and 5 coconuts per tree/month provides 100 coconuts/month/Rai or 15 million of coconuts per month or 180 million coconuts per year. What is the volume of the present unused coconuts? And, what happens to them? / Answer: 10% The volume of the present unused coconuts is 10% of total coconuts. Most of them are leaved in the coconut plantation or are burned. When the coconut is processed in the food industry, what do they do with the shells? / Answer: , , , Burning charcoal, Joss stick, Accessories, Home decoration 1 How many people are needed to harvest one Rai of coconut plantation? / Answer: 1-2 1-2 persons

113

ANNEX 7
The Results of the Public Hearing
On the project for Activated Carbon and Water Filter Factory In Tap Sakae District, Prachuab Khiri Khan Province The invitation to the public hearing was sent by the Mayor of Tap Sakae Subdistrict Administration Organization together with the Project Brochure prepared and printed by CEERD to 230 persons living in the Tap Sakae Sub-district, Khao Lan Sub-district, and Saeng Arun Sub-district (10 kms around the project location). A registration form, associated with a questionnaire, was given to all participants at the time of the registration. Of a total of 230 invited participants, 125 registered and participated at the venue of the public hearing meeting held at Tap Sakae Subdistrict Administration Organization on the 26th March. Of a total of 125 registered participants, only 114 participants answered the forms. Based on the 114 answers received from the evaluation forms filled by the meeting participants just after the public hearing, following results can be drawn: 1) Category of Participant:
Tap Sakae coconut growers group

7%

8%

4%

Residents of Moo 5, Tambon Tab Sakae Producer of charcoal from coconut shell Official from Government units in Tab Sakae District Others
Others: - Head of Moo 6, Khao Lan Subdistrict - Coconut purchaser - Mayor of Tab Sakae Subdistrict Administration

50% 31%

2) Do you think this project will be useful for coconut growers of Tab Sakae District?
No 1%

Yes 99%

114

ANNEX 7 (Cont.)
3) Are you willing to set up a factory in Tab Sakae District?
No 2%

Yes 98%

4) How would you like to be involved in the project?

15% 38%

Co-investor Coconut shell provider


32%

Coconut charcoal provider Others


Others: - Employees - Coconut growers - Workers

15%

5) If you disagreed with this project, please give the reasons: Following 5 comments where registered by 5 of the participants in their questionnaires: Agree - Job opportunity Agree - Better living condition Agree - But would like to know more about: working hours from 8.00 am to 5.00 pm? Working all day - all night? Are the machines noisy? If dust and smoke from burning coconut shell will affect the environment and the people living nearby the factory? Neutral - Please think carefully because the pollution may affect the environment of the community and the people Disagree - It may affect the environment

115

Appendix 6-a. Project Brochure in Thai Appendix 6-b. Project Brochure in English

116

Who are the people being associated with the project?

Stakeholders
Coconut growers association / cooperative, Coconut / Charcoal producers, Private businesses, Individual partners, Public partners, Others.

Provincial & National

Community

S.L.D. Building (7B) 13 Soi Saladaeng 1, Rama IV Rd Silom, Bangrak District Bangkok 10500 Thailand

Local Community

Potential Partners

PROJECT PRESENTATION

and / or Shareholders

What are the next steps?

Several visits to Thap Sakae between January and April 2008, to discuss

Production of Activated Carbon and Water Filter from Coconut and Palm Oil Shells in Thap Sakae, district of Prachuab Khiri Khan Province, Thailand (South of Thailand)
What is the Project idea?
With the help from the Asian Development Bank (ADB) for the promotion of Effective Water Policies and Practices, the project is studying how to install an Activated Carbon and Water Filter Factory using coconut charcoal in Thap Sakae. Thap Sakae is one of Thailands biggest coconut production areas and the project will add value to its products. The project will help to transfer technology for serving the production of low cost water filters. It will promote a public/private partnership business model to develop the local industry.

with the people willing to participate as shareholders in the factory;

Organization of a District Public Hearing to collect the communitys opinion

about the set-up of the factory;

Submission of the Initial Report to ADB in April 2008;

Search for financial support for the preparation of the full feasibility study

(May-August 2008);

Search for financial support (debt/equity investment) for the

implementation of the Activated carbon and Water filters factory

(September-November 2008);

Development and Start-up of the Activated carbon factory in Thap Sakae What is Activated Carbon?
Charcoal is the raw material for making activated carbon which is a highly

(starting December 2008-January 2009). Credits

absorbent carbon, obtained by a physical or chemical reaction making it very porous. As a result, just 500 gr. of activated carbon has an internal surface equivalent to 80 football fields! Activated Carbon is used to filter water, air and gases in order to purify them. Coconut charcoal provides the activated carbon with a huge number of micropores, making it
Email ceerd@ceerd.net Web www.ceerd.net

This document has been prepared by CEERD with the cooperation of the

Thap Sakae Tamboon Organization Administration,

No.1, Moo. 1, Petkasem Road, Thap Sakae Subdistrict, Prachuab Khiri Khan 77130

This brochure has been produced with the financial assistance of the

Asian Development Bank (ADB) but CEERD is the sole responsible

for its content and can be contacted at:

Centre for Energy Environment Resources Development (CEERD)

Tel. (66-2) 235 5817

much more efficient for the filtration of water.

Fax (66-2) 236 9574

How to make Activated Carbon? The installation of the Activated carbon factory will participate to the socio-economic development of the District by: Increasing the revenue from Coconut production Providing job and training opportunities Transferring knowledge & skills to the local community Promoting the association of local coconut growers and processors for partnering in the business Improving the quality of charcoal production in the Region Helping to reduce the volume of pollutants and residues from the Coconut industry
ACTIVATED CARBON PROJECT DEVELOPMENT PROJECT OVERVIEW

What are the benefits for Thap Sakae District?

Raw coconut shell is used to make charcoal. Later, charcoal is crushed and

activated with steam at high temperatures in a kiln.

The resulting activated carbon is packaged in powder or granules that will be

used to produce water filters.

What are the main outcomes from the process technology?

Flue gases from the carbonization and activation phases can be recycled

to generate steam for the process.

The technology used for the production of Activated Carbon can be

managed with trained local personnel.

The process is saving energy and contributes to sustainable development:

it could apply to the Clean Development Mechanism

(CDM) to help financing the project.

Factory facts and figures:

Land size needed: 18 months

40 to 50 rai

Plant construction time:

Estimated personnel needed at the plant:

180 persons

Activated carbon production per day: 10 tons

Volume of coconut charcoal processed per day:

~ 20 to 30 tons (including electricity production)

or alternatively

Volume of raw coconut shells processed per day:

~ 100 to 150 tons (including electricity production)

The project cost will depend on the process design

and the technology used.

121

Appendix 7-a. Project Concept Design Appendix 7-b. Plant General Arrangement

122

127

Appendix 8-a. Capital Investment Costs per Option Appendix 8-b. Management & Labor Costs per Option

128

ACTIVATED CABON PROCESSING PLANT CAPITAL INVESTMENT


Option#1 10 Mt+PwrGen+Carb QTY TOTAL ITEM QTY TOTAL ITEM QTY TOTAL ITEM QTY TOTAL ITEM QTY TOTAL ITEM QTY TOTAL ITEM QTY TOTAL ITEM QTY TOTAL ITEM 10 Mt -PwrGen+Carb. 10 Mt -PwrGen-Carb. 7 Mt-PwrGen+Carb. 7 Mt -PwrGen-Carb. 3 Mt -PwrGen+Carb. 3 Mt -PwrGen-Carb. 1 Mt -PwrGen+Carb. Option#2 Option#6 Option#3 Option#7 Option#9 Option#5 Option#4 Option#9 1 Mt -PwrGen-Carb. QTY TOTAL ITEM

Description

UNIT

a 66,000 66,000 432,771 413,100 262,286 367,200 262,286 327,857 262,286 79,200 63,000 75,600 40,000 48,000 56,000 67,200 40,000 48,000 50,000 60,000 40,000 48,000 40,000 353,571 63,000 337,500 40,000 214,286 56,000 300,000 40,000 214,286 50,000 267,857 40,000 214,286 40,000

LAND & CLEARENCE 214,286 48,000 262,286 40,000 40,000 214,286 48,000 262,286

1) -

Land Purchase

Sqm

2)

Clearing and Survey

Sqm

SUBTOTAL a

b 1 1 8.00 8.00 1 1.50 3,844,370 2,729,854 1 1 154,016 320,300 34,016 365,431 143,677 204,096 24,951 698,572 45,064 2,056,123 3,611,595 1 1 1 1 3.50 1 1 1 360,633 150,538 228,046 24,646 873,215 44,010 2,199,313 3,938,635 1 239,324 34,521 1 178,379 1 1 1 1 1 1 1 1 4 2,218,840 4,948,694 48,527 3.50 756,786 1 27,030 1 221,104 1 155,651 1 395,884 1 1 34,016 1 346,992 1 166,851 1 66,000 1 66,000 1 66,000 1 1 1 1 1 1 1 1 1 1 3.50 1 1 1 1 1 1 1 1 1 1 3.50 2,544,274 6,388,645 4,411,856 2,132,158 55,455 3.50 45,136 873,215 1 772,500 31,188 1 24,912 255,121 1 252,900 179,597 1 183,183 456,789 1 278,703 1 34,016 1 30,416 400,375 1 190,015 192,520 1 208,718 66,000 1 145,675 2,279,698 1,555,473 1,739,322 32,229 1.50 32,229 2 22,011 1.50 22,011 1.50 11,378 1.50 72,890 1 42,973 1 51,775 1 27,881 1 33,039 1 276,982 8.00 163,296 8 196,746 8.00 111,524 8.00 125,548 8.00 1 1.50 3,844,370 1 1 1 1 1 1 1 1 1 1 3.50 2,666,516 6,510,886 57,909 921,215 32,847 255,121 187,787 432,816 348,919 42,140 188,570 192,520 6,673 32,229 72,890 276,982 57,649 15,171 11,378 804,806 116,540 166,974 152,012 24,333 222,962 146,546 202,320 15,883 588,215 36,109 1,671,894 2,476,700 1 1 1 1 1 1 1 1 1 1 3.50 2,041,200 1 2,041,200 1 2,041,200 1 1,394,056 1 1,394,056 1 720,608 1 720,608 1,421,070 1 1,421,070 1 1 1,065,266 1 1 848,748 1 1 1 8.00 1 1.50

EQUIPMENT AND MATERIAL 301,173 288,248 47,154 12,409 4,551 653,534 96,000 102,810 121,610 24,333 133,777 102,582 60,696 14,306 277,029 22,463 955,606 1,609,140 1 1 1 1 1 1 1 1 1 1 3.50 1 1 8.00 1 1.50 288,248 23,060 6,068 4,551 321,927 96,000 95,956 113,502 24,333 124,859 95,744 56,650 13,352 258,560 21,247 900,202 1,222,129

1)

PROCESS PLANT

Carbonization unit

LOT

Activation unit

LOT

Freight and Transport

Commissioning spare part

LOT

Two (2) years spare parts

2)

UTILITES PLANT

LPG Unit

LOT

Compressed Air and Inert Gas Unit

LOT

Raw Water and Water Treatment Unit

LOT

Fire Protection

SKID

Power Generation

SKID

Power Distribution

SKID

Instrument Control System

SKID

Instrument Equipment

SKID

Commissioning Spare Parts

LOT

Maintenance Equipment & Inventory

LOT

Two (2) Years Spare Parts

SUBTOTAL EQUIPMENT AND MATERIAL b

c 1 1 1 2.50 3,945,027 3,632,808 2,456,497 104,662 2.50 96,583 2.50 66,197 3 725,436 1 592,365 1 72,217 1 1,640,284 1 1,533,135 1 1,442,850 1 1,362,786 592,365 96,583 3,305,712 1,474,646 1 1,410,725 1 875,234 1 1,253,978

CONSTRUCTION & COMMN'S 1 1 1 2.50 1,175,604 1,277,612 592,365 96,583 3,142,165 1 1 1 2.50 675,562 1,290,208 469,538 66,343 2,501,652 1 1 1 2.50 761,073 1,254,652 62,797 57,562 2,136,085 1 1 1 2.50 684,966 1,039,770 62,797 49,479 1,837,012 1 1 1 2.50 684,966 1,039,770 62,797 49,479 1,837,012

1)

CIVIL WORKS

Road & Landscaping

lump sum

Fondation & Building

lump sum

Steel Structural

lump sum

Contingency (Civil Works)

2) 1 1 2.50 747,121 1 1 1 3 1 2.50 455,852 1 1 2.50 239,364 5,387,365 5,838 118,109 1 2.50 115,418 1 7,007 2.50 93,045 1 4,453 196,168 121,810 115,925 5,943 243,678 4,819,775 1 1 2.50 252,841 3 20,410 50,285 1 106,767 51,339 1 51,339 1 1 1 1 2.50 1,335 1 13,200 1 747,121 18,222 2.50 18,222 2.50 429,726 1 429,726 1 521,513 13,038 534,550 36,419 69,573 63,338 76,041 6,134 251,505 92,901 145,361 5,957 244,218 3,486,771 299,173 1 299,173 1 -

MECHANICAL & PIPING 1 1 3 224,267 293,485 12,944 530,696 1 1 1 3 1 3 13,200 51,339 106,767 20,410 4,453 196,168 1 1 3 121,810 115,925 5,943 243,678 4,276,254 1 1 2.50 1 1 1 3 1 2.50 1 1 2.50 293,485 7,337 300,823 13,200 51,339 106,767 20,410 4,453 196,168 121,810 115,925 5,943 243,678 3,882,833 1 1 2.50 1 1 1 3 1 2.50 1 1 2.50 178,684 151,707 8,260 338,651 13,200 47,568 63,820 20,713 3,287 148,587 96,169 100,956 4,928 202,053 3,190,943 1 1 2.50 1 1 1 1 1 2.50 1 1 2.50 151,707 3,793 155,500 23,308 44,527 40,537 4,867 2,831 116,069 59,457 93,031 3,812 156,300 2,563,953 1 1 2.50 1 1 1 1 1 2.50 1 1 2.50 110,958 106,196 5,429 222,584 24,000 34,270 40,537 6,083 2,622 107,512 44,592 54,426 2,475 101,494 2,268,602 1 1 2.50 1 1 1 1 1 2.50 1 1 2.50 106,196 2,655 108,851 24,000 34,270 40,537 6,083 2,622 107,512 44,592 54,426 2,475 101,494 2,154,870

PROCESS PLANT

Carbonization Unit

LOT

Activation Unit

LOT

Contingency

3)

UTILITES PLANT

LPG Unit

lump sum

Compressed Air and Inert Gas Unit

lump sum

Raw Water and Water Treatment Unit

lump sum

Fire Protection

lump sum

Power Generation

lump sum

Contingency

4)

ELECTRICAL & INSTRUMENTATION

Power Distribution

lump sum

Instrument and Control

lump sum

Contingency

Subtotal c

d) 1 1 1 18 18 1 120 45 120 5 7 24 0 3 1 3 352,434 33,393 520,000 1,827,008 14,097,347 7,549 1,677,584 24 0.45 2.50 0.50 3 833,220 7.00 247,435 5.00 192,960 120 192,960 180,580 702,392 1,418,260 6,382 297,954 25,757 520,000 1,621,690 11,918,153 2,678,191 2,539,750 90,000 45 90,000 120 5.00 7.00 24 0.45 3.00 0.50 3 192,000 120 192,000 90 45 737,996 1 599,554 1 637,719 18 637,719 18 637,719 18 637,719 18 637,719 637,719 838,136 144,000 90,000 2,692,413 192,960 196,932 687,539 1,401,232 2,837 353,252 27,784 520,000 1,625,215 11,775,063 100 5.00 7.00 24 0.45 3.50 0.50 3 189,595 1 189,595 1 168,589 193,163 1 12 18 1 120 30 120 5.00 7.00 24 24 0.45 2.50 0.50 3 2,057,237 16,515,626 12,434,113 1,667,295 520,000 3 520,000 41,674 0.50 30,585 412,891 3.00 373,023 8,844 0.45 2,996 1,965,359 24 1,479,659 0.45 2.50 0.50 3 2,163,922 18,060,951 520,000 42,920 451,524 4,352 2,149,253 1,082,498 7.00 983,170 7.00 735,317 325,544 5.00 319,432 5.00 220,593 192,960 120 192,960 100 160,800 3,566,007 2,836,869 2,605,905 750,000 45 90,000 45 90,000 192,000 120 192,000 90 144,000 1,164,777 1 896,674 1 751,628 560,664 18 637,719 18 637,719 515,808 18 637,719 18 637,719 189,595 1 189,595 1 168,589 193,163 1 193,163 1 176,252 1 193,163 1 176,252 1 1 18 12 1 90 45

SERVICES 176,252 168,589 637,719 425,146 524,567 144,000 90,000 2,166,272 160,800 177,003 610,636 1,065,956 2,159 313,517 19,968 520,000 1,488,407 8,957,617 100 5.00 7.00 24 0.45 3.50 0.50 3 1 1 12 8 1 60 45 141,001 134,871 425,146 283,430 310,219 96,000 90,000 1,480,668 160,800 80,457 375,089 805,820 1,632 237,006 14,556 520,000 1,150,902 6,771,597 1 1 12 8 1 60 45 100 5 7 24 0.45 4 0.5 3 141,001 134,871 425,146 283,430 270,160 96,000 90,000 1,440,608 160,800 61,106 337,232 734,427 1,487 216,008 12,621 520,000 1,091,760 6,171,652

1)

Front End Engineering

- Feasalbity Studies Phase 1

lump sum

- Implementation Phase 2

lump sum

2)

Project Magement

- Detail Engineering (control / supervision)

month

- Construction (control / supervision)

month

3)

Detail Engineering (EPC contract)

lump sum

4)

Vendor Assistance

days

5)

Commissioning

days

Subtotal d

e)

OTHERS

1)

Provision for Training

days

2)

Provision for Import Duty

3)

Provision for Local VAT

4)

Finance Charge & IDC

IDC

month

IDC Insurance

Loan Expenses

5)

Insurance Policy (during Construction)

6)

Working Capital (3 months)

month

Subtotal e

TOTAL

ACTIVATED CARBON PROCESSING PLANT OPERATION AND MAINTENANCE EXPENDITURE ( IN US $)

ITEMS

UNIT OPERATION

Option #1 10 Mt+PwrGen+Carb. Option #4 3 Mt-PwrGen+Carb. Option #8 3 Mt-PwrGen-Carb.


NUMBER
NOMBRE

Option #2 10 Mt-PwrGen+Carb.
NUMBER
NOMBRE NOMBRE NOMBRE NOMBRE NOMBRE NOMBRE

Option #3 7 Mt-PwrGen-Carb.
NUMBER NUMBER NUMBER NUMBER NUMBER YEARLY AVERAGE YEARLY AVERAGE YEARLY AVERAGE YEARLY AVERAGE YEARLY AVERAGE YEARLY AVERAGE

COST IN US $ Option #5 1 Mt-PwrGen+Carb. Option #6 10 Mt-PwrGen-Carb. Option #7 7 Mt-PwrGen-Carb.

Option #9 1Mt-PwrGen-Carb.
NUMBER
NOMBRE

DESIGNATION

UNIT unite

NUMBER

UNIT unite

MONTHLY AVERAGE

NOMBRE

YEARLY AVERAGE

YEARLY AVERAGE

YEARLY AVERAGE

1 1 1 1 2 1 1 2 9 $266,736.00 9 $266,736.00 9 $266,736.00 9 $266,736.00 9 $266,736.00 9 20,568.00 2 20,568.00 2 20,568.00 2 20,568.00 2 20,568.00 2 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 24,000.00 1 24,000.00 1 24,000.00 1 24,000.00 1 24,000.00 1 24,000.00 6,168.00 20,568.00 $266,736.00 72,000.00 2 72,000.00 2 72,000.00 2 72,000.00 2 72,000.00 2 72,000.00 60,000.00 1 60,000.00 1 60,000.00 1 60,000.00 1 60,000.00 1 60,000.00 24,000.00 1 24,000.00 1 24,000.00 1 24,000.00 1 24,000.00 1 24,000.00 1 1 2 1 1 2 9 60,000.00 1 60,000.00 1 60,000.00 1 60,000.00 1 60,000.00 1 60,000.00 1

MANAGEMENT 60,000.00 24,000.00 60,000.00 72,000.00 24,000.00 6,168.00 20,568.00 $266,736.00 1 1 1 2 1 1 2 9 60,000.00 24,000.00 60,000.00 72,000.00 24,000.00 6,168.00 20,568.00 $266,736.00

PRESIDENT OF THE BOARD

12

MONTH

5,000

60,000.00

QA/QC MANAGER

12

MONTH

2,000

24,000.00

MANAGING DIRECTOR

12

MONTH

5,000

60,000.00

DIRECTORS

12

MONTH

3,000

72,000.00

MARKETING MANAGER

12

MONTH

2,000

24,000.00

MARKETING OFFICER

12

MONTH

514

6,168.00

EXECUTIVE SECRETARY

12

MONTH

857

20,568.00

MANAGEMENT sub total

$266,736.00

2 1 1 1 1 1 1 1 1 2 2 1 2 16 $110,328.00 16 $110,328.00 16 $110,328.00 16 $110,328.00 3,216.00 2 3,216.00 2 3,216.00 2 3,216.00 6,852.00 1 6,852.00 1 6,852.00 1 6,852.00 6,168.00 2 6,168.00 2 6,168.00 2 6,168.00 2 1 2 16 6,168.00 2 6,168.00 2 6,168.00 2 6,168.00 2 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 6,168.00 6,168.00 6,168.00 6,168.00 6,168.00 6,852.00 3,216.00 $110,328.00 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 1 6,168.00 18,000.00 1 18,000.00 1 18,000.00 1 18,000.00 1 18,000.00 3,084.00 1 3,084.00 1 3,084.00 1 3,084.00 1 3,084.00 36,000.00 1 36,000.00 1 36,000.00 1 36,000.00 1 36,000.00 1 1 1 1 1 1 1 1 2 2 1 2 16

ADMINISTRATION STAFF 36,000.00 3,084.00 18,000.00 6,168.00 6,168.00 6,168.00 6,168.00 6,168.00 6,168.00 6,168.00 6,852.00 3,216.00 $110,328.00 1 1 1 1 0 1 1 1 2 2 1 2 15 36,000.00 3,084.00 18,000.00 6,168.00 0.00 6,168.00 6,168.00 6,168.00 6,168.00 6,168.00 6,852.00 3,216.00 $104,160.00 1 1 1 1 0 1 1 1 2 2 1 2 15 36,000.00 3,084.00 18,000.00 6,168.00 0.00 6,168.00 6,168.00 6,168.00 6,168.00 6,168.00 6,852.00 3,216.00 $104,160.00

ADMINISTRATION MANAGER

12

MONTH

3,000

36,000.00

RECEPTIONIST/KEY BOARD

12

MONTH

257

3,084.00

HUMAN RESOURCE OFFICER

12

MONTH

1,500

18,000.00

ACCOUNTING (GENERAL)

12

MONTH

514

6,168.00

ACCOUNTING (INVOICING)

12

MONTH

514

6,168.00

ACCOUNTING (SALARY)

12

MONTH

514

6,168.00

COST CONTROL OFFICER

12

MONTH

514

6,168.00

PLANNING

12

MONTH

514

6,168.00

SECRETARY

12

MONTH

257

6,168.00

NURSE

12

MONTH

257

6,168.00

IT TECHNICIAN

12

MONTH

571

6,852.00

GENERAL WORKERS

12

MONTH

134

3,216.00

ADMINISTRATIVE STAFF sub total

16

$110,328.00

3 1 1 5 6 1 10 4 8 13 10 67 126 1 1 1 1 2 1 1 1 5 14 165 $851,136.00 $67,728.00 8,040.00 5 14 122 2,580.00 1 2,580.00 1 3,432.00 1 6,864.00 2 3,432.00 1 3,432.00 6,864.00 3,432.00 2,580.00 2,580.00 8,040.00 $67,728.00 $737,832.00 7,200.00 1 7,200.00 9,600.00 1 9,600.00 24,000.00 1 24,000.00 1 1 1 3 2 1 1 1 5 16 146 $406,344.00 83 $293,040.00 105 107,736.00 40 64,320.00 50 25,680.00 6 15,408.00 10 33,384.00 9 23,112.00 9 49,344.00 4 24,672.00 8 24,672.00 4 24,672.00 4 24,672.00 49,344.00 23,112.00 25,680.00 80,400.00 $368,736.00 24,000.00 9,600.00 7,200.00 10,296.00 6,864.00 3,432.00 2,580.00 2,580.00 8,040.00 $74,592.00 $820,392.00 25,680.00 10 25,680.00 10 25,680.00 18,000.00 1 18,000.00 1 18,000.00 1 10 4 4 5 5 32 67 1 1 1 3 2 1 1 1 5 16 108 37,008.00 5 30,840.00 6 37,008.00 2 30,840.00 2 12,336.00 5 30,840.00 2 18,000.00 1 18,000.00 1 18,000.00 1 36,000.00 1 36,000.00 1 36,000.00 1

OPERATION STAFF 36,000.00 18,000.00 12,336.00 12,336.00 18,000.00 25,680.00 24,672.00 24,672.00 12,840.00 12,840.00 51,456.00 $248,832.00 24,000.00 9,600.00 7,200.00 10,296.00 6,864.00 3,432.00 2,580.00 2,580.00 8,040.00 $74,592.00 $700,488.00 1 1 5 6 1 10 4 8 9 10 50 105 1 1 1 3 2 1 1 1 5 16 146 36,000.00 18,000.00 30,840.00 37,008.00 18,000.00 25,680.00 24,672.00 49,344.00 23,112.00 25,680.00 80,400.00 $368,736.00 24,000.00 9,600.00 7,200.00 10,296.00 6,864.00 3,432.00 2,580.00 2,580.00 8,040.00 $74,592.00 $820,392.00 1 1 2 2 1 10 4 4 5 5 32 67 1 1 1 3 2 1 1 1 5 16 108 36,000.00 18,000.00 12,336.00 12,336.00 18,000.00 25,680.00 24,672.00 24,672.00 12,840.00 12,840.00 51,456.00 $248,832.00 24,000.00 9,600.00 7,200.00 10,296.00 6,864.00 3,432.00 2,580.00 2,580.00 8,040.00 $74,592.00 $700,488.00 1 1 2 2 1 6 4 4 5 5 40 71 1 1 1 1 1 1 1 1 5 13 108 36,000.00 18,000.00 12,336.00 12,336.00 18,000.00 15,408.00 24,672.00 24,672.00 12,840.00 12,840.00 64,320.00 $251,424.00 24,000.00 9,600.00 7,200.00 3,432.00 3,432.00 3,432.00 2,580.00 2,580.00 8,040.00 $64,296.00 $686,616.00 1 1 2 2 1 6 4 4 5 5 32 63 1 1 1 1 1 1 1 1 5 13 100 36,000.00 18,000.00 12,336.00 12,336.00 18,000.00 15,408.00 24,672.00 24,672.00 12,840.00 12,840.00 51,456.00 $238,560.00 24,000.00 9,600.00 7,200.00 3,432.00 3,432.00 3,432.00 2,580.00 2,580.00 8,040.00 $64,296.00 $673,752.00

PLANT MANAGER

12

MONTH

3,000

36,000.00

CHEMIST ENGINEER

12

MONTH

1,500

18,000.00

LABORATORY TECHNICIAN

12

MONTH

514

30,840.00

QA/QC CONTROLLER

12

MONTH

514

37,008.00

SAFETY/ SECURITY ENGINEER

12

MONTH

1,500

18,000.00

SECURITY OFFICER

12

MONTH

214

10

25,680.00

SHIFT SUPERVISOR

12

MONTH

514

24,672.00

CCR OPERATOR

12

MONTH

514

49,344.00

LOCAL OPERATOR

12

MONTH

214

17

43,656.00

ENGINE DRIVER

12

MONTH

214

10

25,680.00

GENERAL WORKERS

12

MONTH

134

75

120,600.00

OPERATION STAFF sub total

138

$429,480.00

MAINTENANCE STAFF

CHEF ENGINEER

12

MONTH

2,000

24,000.00

MECHANICAL FOREMAN

12

MONTH

800

9,600.00

E/I FOREMAN

12

MONTH

600

7,200.00

MECHANICAL TECHNICIAN

12

MONTH

286

10,296.00

ELECTRICAL TECHNICIAN

12

MONTH

286

6,864.00

INSTRUMENT TECHNICIAN

12

MONTH

286

3,432.00

WELDER

12

MONTH

215

2,580.00

PIPE FITTER

12

MONTH

215

2,580.00

GENERAL WORKERS

12

MONTH

134

8,040.00

MAINTENANCE STAFF sub total

16

$74,592.00

GRAND TOTAL

179

$881,136.00

133

Appendix 9. Economic & Financial Simulation Model Framework

134

135 Appendix 9. Economic and Financial Simulation Model Framework


Description $ UNIT OR % QTY OR BASIS Mt/day 7.00 3,120 3,120 3,120 170 1.2 1.750 3.500 1.750 0.000 1

- Revenues : Total Operating Days/Year a) Activated Carbon - Powder b) c) d) Activated Carbon - Granular

Total day/year US$/Mt @ Mt/d US$/Mt @ Mt/d

Activated Carbon - Extruded US$/Mt @ Mt/d Coconut Shell Charcoal US$/Mt @ Mt/d Total Revenue US $ Production Costs

II II-a

- Operation Expenditures: - Variable Costs a) Coconut Shell Charcoal US$/Mt b) Sub-total a Utilities Chemicals & Lube-Oils as % of total production cost Other Utilities : - Electricity Consumption US$/Kwh Kw - LPG as Make-up Fuel (Steam) - Water m/ day @ US$ / m Sub-total b c) Packing and Spare Parts Product Packing & Delivery as % of total production cost Parts & Maintenance Service as % of total production cost Sub-total c d) Services Waste Water Treatment m /day/per person @ US $m Solid Waster Treatment kg /day/per person @ US $ / kg Site Maintenance m @ US $ year / m Sub-total d e) Miscelaneous Total % of (b+c+d) Sub-total e Subtotal Variable Costs US $ US/Mt Mt/day

14 $170 1.0 phase 1 1.50% $0.1231 450 $509 0.623 0 phase 1 10% 4.50%

14 $170 phase2 1.50% $0.1231 450 $509 0.623 $0.371 phase 2 10% 4.50%

0.324 2.00 40,000

$0.137 $0.100 $0.150

2.50% 1.0

2.50%

136

II b

- Fixed Costs a) Labor Expenses xx Management + xx Employees - xx Workers Other Labor Expenses Including Insurance, bonus, transportation, welfare, medical, etc of (a) Sub-total a b) Technical Fees Foreign as % of total production cost Sub-total b Sub-total a+b c) Admistrative Expenses Insurance Cover Marketing / Sales as % of total production cost Cars' Rental & Runing Costs US $ /day OVHD & Expenses as % of total production cost Sub-total c d) Other Administrative Expenses as % of c Sub-total d Sub-total c+d Subtotal Fixed Cost US $ Total O. & M. Expenditures US $ Total O. & M. Costs without Feedstock US $ 1.0 Gross Margin (US$) 2.50% 2.50% 1.50% 1.50% $250 $250 2.30% 2.30% Total Assets % on Assets phase 1 5,151,493 0.50% phase 2 5,202,832 0.50% 20% 1.0 phase 1 0.50% phase 2 0.50% 20%

III

- EBITDA - Earning Before Interest, Tax, Deprec. and Amortiz. Depreciation (On Assets) Buildings Machineries and Equipments Total Depreciation (On Assets)

Gross Profit Margin (%) straight line % 5% 1,277,612 10% Total 3,873,881 $5,151,493

IV

- EBIT Income Tax (30%) Tax Holiday (number of years) + 5 years with 50% Tax Reduction - NOPAT - Net Operating Profit After Tax (US$) Profit Margin (US$) Depreciation (On Assets) straight line%

30%

5% and 10% 3 months $520,000 $11,918,153 10.00% $16,910,093 $0 10.00% $0

VI VII VIII IX

- FLOW OF FUNDS Change in Working Capital - OPERATING CASH FLOW Investment Expenditures - FREE CASH FLOW Discounted Free Cash Flow - PRESENT VALUE OF FREE CASH FLOW Terminal Value (After 25 years) Discounted Terminal value

137

NET PRESENT VALUE OF THE PROJECT (US$) Project IRR (%) PBP - Pay Back Period (Years) CUMULATED FREE CASH FLOW (US$)
Principal Loan Payback - payable in 10 years Interest on Debt '@ % Depreciation (on Assets) straight line% Write-off - payable in 5 years Income Tax Dividends 70% 8.50% Total $3,344,286 8

$16,910,093 25.54% 3
$8,342,707 $3,575,446 $3,344,286 30%

Cash Flow after Debt Service (US$) = Benefits Investor/Lender/Bank FIRR 70% Equity FIRR - Return on Equity 30% Project FIRR ADSCR - Annual Debt-Service Cover Ratio LLCR - Loan Life Debt Service Ratio 10%

9.95% 43.64% 17.84% 1.30 83.84

138

139

Appendix 10. Main Economic Simulation Results for all Options

140

Extrapolated

Extrapolated

Extrapolated

DATA SOURCE (Simulation 7Mt and 1 Mt)


10 10 10 7 7 3 3 1 1

OPTIONS

#1 10 Mt Units -PwrGen-Carb. -PwrGen+Carb.


11,918,153 3,611,595 0 0 0 1,394,056 161,417 2,056,123 1,277,612 262,286 40,000 5,151,493 754,286 837,760 359,040 11,775,063 4,659,243 0 848,748 7 720,608 890,574 2,199,313 1,290,208 327,857 50,000 6,277,308 8,957,617 2,476,700 0 0 0 720,608 84,197 1,671,894 1,254,652 262,286 40,000 3,993,638

#2 10 Mt -PwrGen+Carb. -PwrGen-Carb. -PwrGen-Carb.


16,515,626 6,388,645 0 1,421,070 21 2,041,200 382,101 2,544,274 1,533,135 413,100 63,000 8,334,879 2,514,286 1,196,800 1,760,000 12,434,113 4,411,856 0 0 0 2,041,200 238,498 2,132,158 1,442,850 262,286 40,000 6,116,992 14,097,347 4,948,694 0 1,065,266 15 1,394,056 270,532 2,218,840 1,362,786 367,200 56,000 6,678,681

#6 10 Mt PwrGen+Carb. -PwrGen+Carb.
6,771,597 1,609,140 0 301,173 3 288,248 64,114 955,606 1,039,770 262,286 40,000 2,911,196 251,429

#3 7 Mt

#7 7 Mt

#4 3 Mt

#8 3 Mt

#5 1 Mt

#9 1 Mt -PwrGen-Carb.
6,171,652 1,222,129 0 0 0 288,248 33,679 900,202 1,039,770 262,286 40,000 2,524,184

+PwrGen+Carb
18,060,951 6,859,805 348,919 1,421,070 21 2,041,200 382,101 2,666,516 1,640,284 432,771 66,000 8,932,860 2,514,286

INVESTMENT Investment Cost Technology Cost Power Plant (-25%) Carbonization (-5%) Number of Carbon Ovens Activation (-5%) ASSETS Other Technol. Costs (-5%) Utilities (-25%) Building Cost (-10%) Land Cost Superficy Factory Total Assets

US$ US$ US$ US$ (units) US$ US$ US$ US$ US$ (Sqm) US$

US$ US$ US$ US$ US$


1,257,143 US$ 5,188,519 1,057,363 33,378 1,090,741 179 396,254 1,486,995 6,675,514 668 554 369 5,543,158 3,685,376 1,399,951 1,170,970 350,872 267,145 165 122 146 297,907 1,304,383 4,401,242 629 1,021,363 27,716 1,049,079 885,398 18,427 903,825 984,470 22,006 1,006,477 4,143,207 2,514,406 3,096,858 159,460 1,257,631 520,071 159,460 949,391 468,064 111,622 528,524 1,945,969 840,586 15,194 855,779 108 237,011 1,092,791 3,038,760 434 520,071 159,460 638,075 468,064 111,622 757,173

119,680 416,057 53,153 520,419 1,743,915 984,470 14,900 999,371 146 236,803 1,236,173 2,980,088 993 416,057 53,153 401,964 1,230,214 840,586 11,419 852,005 108 201,675 1,053,680 2,283,894 761 364,050 17,718 354,342 987,538 823,939 10,034 833,973 108 185,337 1,019,310 2,006,848 2,007

364,050 17,718 322,759 824,206 808,502 9,089 817,591 100 175,989 993,581 1,817,787 1,818

Feedstocks Coconut Shell (71US$/Mt) Coconut Charcoal (170US$/Mt) Make Up Fuels ARIABLE COST Coconut Shell (PwrGen) Electricity (Grid) LPG Other Prod./Variable Costs Total Variable Costs Local Personal Cost Foreign Personal Cost Total Personnel US$ US$ US$ US$ US$ US$ US$

FIXED COSTS

Number of Staff

(Persons)

Other Fixed Costs Total Fixed Costs Total Production Costs

PROD. COSTS

Production Cost

US$ / Mt

Price Products Total Incomes


US$ US$ US$ US$

US$ / Mt

FINANCIALS EBITDA (3rd year)

% US$/Mt

2,600 9,152,000 2,476,486 2,476,486 28,615 9.69% 2,361,061 2.69% 10.89% 9.95% 0.01 28.38 10 2,773 13.00% 2,379 13.00%

2,600 9,152,000 3,608,842 3,608,842 1,370,415 17.32% 12,969,100 9.45% 26.07% 9.95% 0.60 47.97 5

2,600 9,152,000 5,466,624 5,466,624 3,781,381 35.21% 31,838,609 26.14% 73.36% 9.95% 2.19 100.85 2 1,660 13.00%

2,600 6,406,400 2,005,158 2,005,158 94,490 10.03% 2,241,340 3.02% 11.45% 9.95% 0.03 29.36 8 2,775 13.00%

2,600 6,406,400 3,367,640 3,367,640 1,752,327 22.57% 15,345,244 14.23% 38.75% 9.95% 1.04 63.12 4 2,075 13.00%

4,767 5,033,952 2,053,864 2,053,864 457,944 13.00% 4,794,389 5.66% 16.82% 9.95% 0.24 36.84 6 4,767 13.00%

3,668 3,873,408 1,589,514 1,589,514 375,454 13.00% 3,695,522 5.74% 16.75% 9.95% 0.23 37.36 6 3,668 13.00%

9,201 3,238,752 1,231,904 1,231,904 314,123 13.00% 2,825,539 5.81% 16.66% 9.95% 0.21 37.80 6 9,201 13.00%

8,384 2,951,168 1,133,381 1,133,381 296,913 13.00% 2,589,982 5.84% 16.63% 9.95% 0.20 38.02 6 8,384 13.00%

Free cash Flow (3rd year) Free cash Flow after Debt Service (3rd year) IRR (BOI 8) NPV (25 years) FIRR EIRR DIRR INDICATORS ADSCR - Avge Annual Debt-Service Cover Ratio LLCR - Avge Loan Life Debt Service Ratio PBP - Pay Back period Price Products IRR (BOI 8)

US$ / Mt %

143

Appendix 11-a. Overall Project Planning Appendix 11-b. Project Preparation - Phase 1 Appendix 11-c. Project Preparation - Phase 2

144

PROJECT DEVELOPMENT ACTIVATED CARBON PROCESSING PLANT OVERALL PROJECT PLANNING

NO DURATION -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

1 6

FRONT END ENGINEERING DESIGN

PREPARATION - PHASE 1

MONTH

FULL FEASIBILITY STUDIES

GENERAL TECHNICAL DOCUMENT

IMPLEMENTATION - PHASE 2

MONTH

ADMINISTRATIVE FILE

TECHNICAL FILE

PROJECT IMPLEMENTATION & CONSTRUCTION

CONTROL AND SUPERVISION OF ECP PROVIDER 18

PROJECT MANAGEMENT

MONTH

ADMINISTRATIVE DOCUMENT 3

MONTH

LAND ACQUISITION

LANDSCAPING CONTRACT AND CONSTRUCTION

PEC CONTRACT NEGOCIATION AND HARDWARE

ENGINEERING SUPERVISION

CONSTRUCTION SUPERVISION

CUSTODY TRANSFER & COMMISSIONING

START UP

EPC CONTRACT

ENGINEERING

DETAIL ENGINEERING

PROCUREMENT

LONG LEAD ITEM DELIVERY

AS BUILT AND FINAL DOCUMENT

CONSTRUCTION

CIVIL WORKS

MECHANICAL

PIPING

ELECTRICAL AND INSTRUMENT

PRECOMMISSIONING

PROJECT DEVELOPMENT ACTIVATED CARBON PROCESSING PLANT BASIC EGINEERING MAN-HOUR & COST ESTIMATION PREPARATION PHASE 1

FRONT END ENGINEERING DESIGN (FEED) BASIC ENGINEERING


MH PER UNIT DOCUMENT P.M Eng. Design/ Jr.Eng. P.M Eng. CAD Drafter CAD Drafter Computer Operator Design/ Jr.Eng. Computer Operator TOTAL MH REQUIRED

FIRST ISSUE DATE REVISED DATE REV

: 15-02-2008 : 15-04-2008 A

NO

DWG/DOC NO

DRAWING/DOCUMENT TITLES

SIZE

DWG / DOC

Items Costs

Sub Total Cost

FRONT END ENGINEERING PHASE 1 99,722.47 198.6 192.4 1116 24 240 651 0 0 125.2 493.9 974.8 2066.3 37,250.40 56,190.55

193,163.42

GENERAL

FIX EXPENSES

F000

GENERAL

FEASIBILITY STUDIES

F011

GENERAL

TECHNICAL STUDIES

3041.1 380.1 21.7 193,163.4 63.5 19,316.3 9,658.2 13,521.4 193,163.42

REV. A

SUB TOTAL MAN-HOUR DAYS MAN/MONTH MAN-HOUR RATE (US $ / MH) SUB TOTAL COST - (US $) MAN-HOUR AVERAGE RATE (US $ / MH) % % % % 10 5 7 0

391 48.9 2.8 70.0 27,370.0

1767 220.9 12.6 35.00 61,845

24 3.0 0.2 10.00 240

240 30.0 1.7 5.00 1,200

619.1 77.4 4.4 4.50 2,786

OVER HEAD CONTINGENCY VAT PROFIT GRAND TOTAL (US $)

19,316.34 9,658.17 13,521.44 235,659.4

PROJECT DEVELOPMENT ACTIVATED CARBON PROCESSING PLANT BASIC EGINEERING MAN-HOUR & COST ESTIMATION IMPLEMENTATION PHASE 2

FRONT END ENGINEERING DESIGN (FEED) BASIC ENGINEERING


MH PER UNIT DOCUMENT P.M Eng. Design/ Jr.Eng. P.M Eng. CAD Drafter TOTAL CAD Drafter Computer Operator Design/ Jr.Eng. Computer Operator MH REQUIRED Items Costs

FIRST ISSUE DATE REVISED DATE REV

: 15-02-2008 : 15-04-2008 A

NO

DWG/DOC NO

DRAWING/DOCUMENT TITLES

SIZE

DWG / DOC

Sub Total Cost

FRONT END ENGINEERING PHASE2 49,500.00 65 53.5 63.5 51.6 50.9 66.5 0 40.8 75.9 297 293 105 351 0 0 0 0 343 0 320 92 208 0 128 0 232 168 288 0 312 223 0 428 483 0 80 105.2 34.2 59.6 73 165.4 178 70 110.4 104.4 733.2 738.7 723.1 744.6 559.3 723.5 175 680.2 641.3 22,328.40 13,843.90 16,353.20 17,100.50 16,312.30 18,381.00 3,990.00 14,907.80 16,877.80

189,594.90

F010

GENERAL

FIX EXPENSES

F000

GENERAL

SUB TOTAL MAN-HOUR

F011

PROCESS

SUB TOTAL MAN-HOUR

F020

CIVIL WORKS

SUB TOTAL MAN-HOUR

F030

PIPING

SUB TOTAL MAN-HOUR

F040

MECHANICAL

SUB TOTAL MAN-HOUR

F050

SAFETY

SUB TOTAL MAN-HOUR

F060

CORROSION

SUB TOTAL MAN-HOUR

F070

INSTRUMENT

SUB TOTAL MAN-HOUR

F080

ELECTRICAL

SUB TOTAL MAN-HOUR

5718.9 714.9 40.8 189,594.9 33.2 18,959.5 9,479.7 13,271.6 189,594.90

REV. A

SUB TOTAL MAN-HOUR DAYS MAN/MONTH MAN-HOUR RATE (US $ / MH) SUB TOTAL COST - (US $) MAN-HOUR AVERAGE RATE (US $ / MH) % % % % 10 5 7 0

467.7 58.5 3.3 70.0 32,739.0

2703 337.9 19.3 35.00 94,605

92 11.5 0.7 10.00 920

1556 194.5 11.1 5.00 7,780

900.2 112.5 6.4 4.50 4,051

OVER HEAD CONTINGENCY VAT PROFIT GRAND TOTAL (US $)

18,959.49 9,479.75 13,271.64 231,305.8

151

Appendix 12. Project Cost Estimates and Financing Plan

152

153

Appendix 12.

Project Cost Estimates and Financing Plan


Total Estimated Costs (In US$) 2,000 2,000 2,000 1,800 200 44,000 2,000 8,000 15,000 6,000 12,000 1,000 1,000 1,000 1,000 1,000 0 0 50,000

Inputs / Expenditure Category

1. Civil Works: Technical and non technical surveys, market research: o Coconut shell, charcoal and dust analysis 2. Training, workshops, seminars, public campaigns, meetings with local stakeholders, public hearings: o Fields trips to Thap Sakae (6 field trips x 300 US$) o Organization of a public hearing 3. Specialists Services needed for this project: o Project Coordinator/Planner ( o Community Coordinator and Interpreter o Local Agricultural expert (in-kind expertise provided by the Community) o Technology Expert o Marketing Expert o Economic and Financial Expert o Environmentalist 4. Project Management: Management and operation cost: o Secretarial and administrative costs 5. Other Inputs: Procurement of reports and data: o Preparation of reports and dissemination brochure 6. Contingencies (0-10% of total estimated grant fund): o Use of Contingencies requires prior approval from ADB. Total PDA grant financed

154

155

Appendix 13. Project Schedule of Activities

156

157

Appendix 13.

Project Schedule of Activities

Activities 12 November 2007

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Project Start

1. Stakeholders 14 November 2007 6 December 2007 ` 26-Mar-08 15 February 2008 05 February 2008

1.1. Meeting with cooperatives, local producers and local administration 1.2. Technical meetings for data collection 1.3. Meeting with coconut processing industries and potential direct project partners 1.4. Public hearing with overall local community

1.5. Meeting with Thap sakae direct project partners

1.6. Final Meeting with Thap Sakae community and direct partners

2. Institutional and Legal Framework. 14 November 2007 6 December 2007 5 February 2008 26 March 2008 24-25 April 2007

2.1. Meetings with relevant authorities at national, provincial and local levels

3. Potentials Resources (human, raw material, etc)

3.1. Identification of potential Activated Carbon buyers

3.2. Identify Quality Requirements

3.3. Assessment of market for water and air filters (ready made/costumer specified).

4.Technology and Processes

4.1. Evaluation of the different technologies and processes

4.2.Finalization of Conceptual Design

4.3. Preparation investment and operational budget

5. Preliminary Environmental Impact Assessment

5.1 Emission potential evaluation

5.2. Assessment of CDM potential

6. Outline of Financing Plan

6.1. Economic analysis with sensitivity analysis

6.2. Identification of financing sources and project Implementation Plan

7. Project Reports 21 December 2007 05 February 2008 30 November 2007 21 December 2007 15 February 2008 03 March 2008 26 May 2008 26 March 2008 12 May 2008

7.1. Inception Report

7.2. Mid-term Report

7.3. Final Report

7.4 Field Trips Reports

Project End

159

Appendix 14. Design and Monitoring Framework

160

161

Appendix 14.
Performance Targets / Indicators Data Sources / Reporting Mechanisms Assumptions and Risks Assumptions

Design and Monitoring Framework

Design Summary

Impact
Once the facility has been established the result can be assessed via local living standard Number of motorcycles in the community, number of pick-ups, turnover from shops selling construction materials

The facility is established

Value adding to local coconut cultivation and processing by setting up an activated carbon factory in Tap Sakae (Thailand) / Increased turnover and Income generation in the local communities.

Risks
Project is not feasible, and the facility is not established

Outcome
Reports scheduled

Assumptions
The activated carbon and filter facility are established

Risks
Project is not feasible

In cooperation with local stakeholders, to prepare a plan for local sustainable use of residues from cultivation and processing of coconuts. To prepare an Initial evaluation of the potential for the development of AC water and air filters. Investigations related to the different outputs are carried out

Implementation of a pre-feasibility study for production of activated carbon and assessment of a unit for manufacturing air and water filters

Outputs Assumptions
Access to all information is possible

Risks
Some essential information cant be retrieved

Identification of: Stakeholders Coconut availability Technology Legal and institutional framework Conceptual design Investment budget Pre-feasibility and cash flow Financing sources Market analysis Conditions for filter production Quality requirements Replicability Potential Assessment of Environmental Impacts CDM opportunities

Existence of lists/ tables with relevant information of identified outputs from: International Statistics; Technology Providers; National & International Markets; National Statistics; Provincial Statistics; Local or National Surveys; Direct Interviews with local officers, coconut growers and coconut processors

162

Activities with Milestones (see Scope of work) Inputs ADB funding USD 50,000.00

1. Stakeholders

1.1. Meeting with cooperatives and local producers 1.2. Meeting with coconut processing industries 1.3. Meeting with community stakeholder in a Public Hearing

2. Institutional and legal framework

2.1. Meetings with relevant authorities at national, provincial and local levels

3. Potentials Resources (human, raw material, etc)

3.1. Identification of potential Activated Carbon buyers 3.2. Identify Quality Requirements 3.3. Assessment of market for water and air filters (ready made/costumer specified).

4. Technology and Processes

CEERD -1- Project Coordination -2- Experts in various project fields: 9 Project Coordinator / Planner 9 Community Expert 9 Technology Expert 9 Marketing Expert 9 Economic and Financial Expert -3- Administration -4- Offices and Equipments

4.1. Evaluation of the different technologies and processes 4.2. Finalization of Conceptual Design 4.3. Preparation investment and operational budget

5. Preliminary Environmental Impact Assessment

5.1. Emission potential evaluation 5.2. Assessment of CDM potential

Local Community 9 Assistant Community Coordinator - Local Agricultural Expert 9 Statistics and other information

6. Outline of Financial Plan

6.1. Economic analysis with sensitivity analysis 6.2. Identification of financing sources and project Implementation Plan

7. Final Report

163

Appendix 15. Inception Report December 15, 2007

164

Technical Assistance Report: PDA Inception Report

Project Number: TA 6325 REG: Promoting Water Policies and Practices (Phase 5) PDA Start Date: 15 November 2007

Pilot and Demonstration Activity (PDA): Producing Water Filter from Coconut and Oil Palm Shells

15 December 2007

The views expressed herein are those of the consultant and do not necessarily represent those of ADBs members, Board of Directors, Management, or staff, and may be preliminary in nature.

Project Team Members

Team leader Team Members (alphabetical order)

LEFEVRE, Prof. Thierry, Economic and Financial Expert & Project Coordinator / Planner HERMAN, WIPAPAN, Community Coordinator and Interpreter LE MARIER, Yves Henri, Technology expert LEFEVRE, Francois, Marketing Expert SURAPUN Tung Kao Tong, Assistant Community Coordinator (in-kind basis replacement of Khun Kraisit MUSIKAJATT Assistant Community expert)

Community Counterparts

NGERNTHAENG, Chod, Mayor from Tap Sakae District and President of Tap Sakae Coconut Association (in-kind basis) SURAPUN Tung Kao Tong, Assistant Chief Officer from Tap Sakae District Administration Office (in-kind basis)

Table of Contents 1. INTRODUCTION .................................................................................................................. 1 2. SCOPE OF WORK ............................................................................................................... 1 3. IMPLEMENTATION A. Progress of work ......................................................................................................... 2 B. Cost and Financing ..................................................................................................... 5 C. Implementation Schedule ........................................................................................... 6 D. Implementation Management Arrangements ........................................................... 6 4. CONCLUSION ...................................................................................................................... 6 Appendix 1. Location Map ............................................................................................... 7 Appendix 2. Agricultural Area Information ..................................................................... 8 Appendix 3. Cost Estimates and Financing Plan ........................................................... 9 Appendix 4. Project Schedule of Activities .................................................................. 10 Appendix 5. Experts CVs............................................................................................... 11 Appendix 6. Design and Monitoring Framework.......................................................... 34 Appendix 7. Field Trip Reports and their annexes ...................................................... 36

The views expressed herein are those of the consultant and do not necessarily represent those of ADBs members, Board of Directors, Management, or staff, and may be preliminary in nature.

1.

INTRODUCTION

The Pilot and Demonstration Activity (PDA) seeks to determine the feasibility of producing lowcost water filters from coconut and oil palm shells, and to refine appropriate public-private partnership business model. The Letter of Agreement (LOA) between ADB and CEERD the Executing Agency (EA), was signed on November 12th, 2007 and the activities planned for 6 months started with a Field visit on November 14th, 2007 for meeting the local coconut producers and the authorities from Tap Sakae District (Prachuab Khiri Khan Province). The objective was to gather information and data on the local conditions for the Activated Carbon (AC) project to be set up in one of the Thailands biggest coconut production areas. 2. SCOPE OF WORK

The PDA targets a region that is one of the major producer of coconuts in Thailand and one of the poorest. The Local Authorities of Tap Sakae have recognized the need to hasten socioeconomic development of the Province, through an integrated cluster development of local industries, such as an AC processing factory and Production of low cost water filters for the domestic and international markets. The pre-feasibility study will combine field activities and desk work, such as: Stakeholders: o Meeting with local producers and cooperatives o Meeting with local community and local administration o Meeting with coconut processing industries Institutional and Legal framework: o Meetings with relevant authorities at the local and provincial level Potential resources (human, raw material, etc.): o Identification of potential AC buyers o Assessment of Quality requirements o Assessment of Market for water and air filters (ready made / customer specified) Technology and Process: o Evaluation of the different technologies and processes o Finalization of conceptual design o Preparation of investment and operational budget Preliminary Environmental Impact Assessment o Emission potential evaluation o Assessment of CDM potential Outline of Financing plan: o Economic analysis with sensitivity analysis o Identification of Financing sources and Project implementation plan

2 3. A. Progress of work IMPLEMENTATION

Introduction The EA initiated some preliminary research and basic market analysis about Coconut and AC production. They were significantly increased with two Field visits implemented to meet the local community: on November 14th, 2007 and on December 6th, 2007. A map of the localization of Tap Sakae is given as Appendix 1. The field trips were organized: to get a clearer understanding of the local coconut industry: visiting the fields, the factories and collecting data from local or provincial authorities; to identify the stakeholders, by meeting the local growers and their association, the processors of coconut and charcoal, the local or provincial authorities (municipality and agriculture administration); to explain the ins and outs of the project and to set up with the stakeholders the next steps of the project activities. Initial Background findings The potential It was the occasion to see how important the coconut industry is for the region. A substantial part of the land is used for coconut plantations: around 80% of the cultivated area in Tap Sakae district (i.e. 171.670 rai ~ approximately 275 km2) is covered with coconut trees and most of that land is locally owned by small growers who are regrouped into cooperatives. The figures provided by the local department of the Ministry of Agriculture state that a total number of 7,391 households, representing around 75% of the population in the district, live from agriculture (see table attached as Appendix 2). Secondly, it was the occasion to understand about the great development potential of coconut. Actually coconut can be wholly exploited: from outer (fiber) shell, fiber powder (dust), inner hard shell, copra (flesh), coconut water and copras brown skin which is used for obtaining highquality coconut oil. Even the tree trunk can be used at the end of its lifetime for furniture manufacturing and construction. Most coconuts have the outer shell and the fiber removed, before further processing. The fiber is processed separately in a hammering mill and the output is a high quality fiber, baled and exported mostly for furniture cushion. Shorter fiber and dust can be used to making compost or aggregated as a construction material. At present, neither all coconuts are processed, nor are all parts of coconuts utilized. The actual process is done locally, by land owners with quite primitive techniques. Moreover, the installed capacity for coconut processing doesnt allow, at present, to treat all available coconuts. It must be said that the number of nuts is huge! Figures provided for the region show an average number of 20 to 25 trees per rai with an average tree production of 5 to 10 nuts every 30 days. This gives a production of 275,343,300 nuts per year, or 754,365 nuts per day. The processing The local coconut process consists in: coconuts cracked to open, water collected and sold, flesh removed and sold to be either used for coconut cream or coconut oil after drying,

3 pressed cake from the coconut oil production used as animal fodder, coconut shells being processed for local charcoal production, later crushed to make charcoal briquettes, fiber being compacted and baled, while the dust is disposed in most cases, posing a problem of bug contamination, waste management and fire risk. The coconuts that are not processed locally are sold at low price and transported to the central part of Thailand for further processing. With a production of nuts relatively stable all over the year, a substantial part of the local population income arises from coconut processing, but the products are sold at low prices and the activity is considered as non-profitable for the less favored plots of land (needing the use of fertilizers...). Stakeholders The main characteristic of the coconut industry is that it is a small-scale business, with low efficiency. Besides, coconut processing is a very labor intensive industry, especially in the first phase of collecting the coconuts and dehusking the shell. Both of these phases are done manually. One of the biggest outputs of coconut production is the food industry with copra and its derivatives (coconut oil, desiccated copra, coconut milk, copra cake). And what is considered as a waste in this industry - i.e. hard shell - is used as raw material for charcoal manufacture and AC plant. From the first two field trips, the EA identified the local growers and the bigger processors of coconuts, grouped under a local Coconut Association as a potential partner for setting up the AC plant. On November 14th, 2007 their vote showed that a large majority was enthusiastic to supporting the plant installation. From the official side, both municipality and agriculture representatives are already involved in the project by providing information and data about the sector and see in the project a chance to improve the socio-economic situation of the province, by creating jobs, improving incomes of families etc., as well as the possibility of developing more efficient way of processing coconuts and its residues. More visits to Tap Sakae have been scheduled, starting with a third one on 18-19 January 2008 for discussing with potential partners and their participation in the Implementation plan. On the request of the Community, the EA will prepare a brochure in Thai describing the project and its outcomes that will be distributed at the beginning of the new year 2008 to prepare next stakeholders meeting, notably Provincial public hearings for assessing the impact of the plant installation in the Province (February or March 2008). Institutional and Legal framework The Ministry of Industry and its Department of Industrial Work as well as the Office of the Board of Investment (BOI) will be the relevant institution regarding the project of AC manufacturing and Production of low cost water filters. Apart from the Ministry of Industry, a certain number of other line ministries should also be involved in the development of this project. They include: Ministry of Finance, Ministry of Commerce, Ministry of Interior, and Ministry of Energy (if ever cogeneration technology is installed). This last point outlines the fact that the conceptual design is still under preparation (see the Technology and Process Section hereafter).

Potential resources Porous carbons are obtained as a residue after the volatile components of the carbonaceous material are removed by a thermal process in the absence of air. The raw material used for charcoal production plays a major part in determining the ability of the AC to adsorb certain molecular species. Activated carbon produced from coconut shells exhibit a predominance of micropores (radius less than 1 nm) making it more effective for the adsorption of gas/vapour. However, the quality of the charcoal produced locally is not optimum: using open drums, the process cannot be closely controlled and the charcoal quality is not regular. The technique has a poor yield, lowering benefits as well. It comes with a significant pollution from the gases and smoke emanating during the carbonization process. If the AC plant uses locally produced charcoal as raw material for the activation process, its quality will need to be standardized through trainings on better practices and quality control. For the activation process, coconut charcoal moisture needs to be in the range of 15 to 17 %. Charcoal may need to be dried for removing its excessive moisture content that could cause water reaction with off-gasses during the early stages of carbonization and slow down or stop the micropore opening. All the more as local producers use water to stop the carbonization process. From the first field visits, samples of coconuts, charcoal, fiber and powder were collected in order to assess the composition and the structure of the raw materials potentially used for AC production. The analyses are under way. At the occasion of the second field trip, two possible locations for the plant were visited in Tap Sakae, providing actual information about the possible cost of land purchase. Major coconut growers in Tap Sakae District are willing to take part in this project. This assures raw material supply and a stable price. The price of coconut shell charcoal is around $180 per ton and the plant will need around 2 Metric tons (Mt) per day for an average production capacity of 1 Mt of AC products per day. Another option is to start the manufacturing process from coconut shells for producing charcoal: the daily need will be around 10 Mt of raw coconut shells, for the same average production capacity of 1 Mt of AC products per day. From the manpower side, the activation carbon plant will require up to 50 operators, depending of the technology choice and the length of the process. Also, the water filter production unit will provide additional jobs. Last, a study about the AC market in Thailand shows that the country is increasingly a net exporter with a volume of around 10,000 tons per year in 2006 (Japan and the USA being the first customers). Technology and Process, There are two main activation techniques used to produce AC: Chemical Activation where the raw material is impregnated with a strong dehydrating agent (usually zinc chloride, phosphoric acid or potassium hydroxide), and then heated to temperatures between 450 - 900C. Physical Activation where the raw material is activated with steam under inert atmosphere at high temperatures between 900 1100C, depending on the raw material used. AC produced by steam activation generally exhibit a fine pore structure, ideal for the adsorption of small molecular weight products and for applications involving low contaminant concentrations. Steam activation is generally used for coal-based, coconut shell and grain based activated carbons. The AC plant will likely use steam activation, fitting perfectly with the

5 needed output and avoiding any problem linked with environmental hazards from the use of poisonous chemicals. The industrial process for activating carbon can be done in two ways: The first option is to integrate carbonization and activation phases. In that case, raw coconut shell is used as raw material and the carbonization of the shell precede the second step the activation phase. It is important to note that these two phases have to be done separately because charcoal material must be cooled after being carbonized, before it can be activated. The second option, commonly used by AC manufacturers worldwide, starts directly from the activation stage, using coconut shell charcoal as raw material. Charcoal preparation consists in crushing it as a fine powder with a rotary crushing equipment to feed the kiln. The activating equipment consists of two main elements: a boiler for steam production and an activation furnace. The types of machinery available include vertical furnaces (often multipleheart type) and rotary kilns. The activation reaction is endothermic and temperature is maintained by partial burning of the CO and H2 formed. The flue gas treatment of the gases produced during the process provides additional heat that can be used either for the process itself or electricity production. Depending on the technology adopted, an assessment of the environmental impact of the AC plant could pave the way for a partly funded CDM project by integrating climate change and sustainable development considerations. It must be reminded that a great range of AC is available on the markets worldwide, each one with different physical and activity properties: first, because of the raw material used for the production; second, of its form (granular, powdered or pelletized) and third, of specific activation characteristics making it suitable for a special use. The fact remains that for having a commercial use, AC must show regular characteristics. That is why the AC industry in collaboration with standard organizations elaborated standard tests for evaluating physical and adsorptive characteristics of AC. The plant design will include a laboratory to analyze and control the quality of the input/output, especially needed if the activation process is tailored at times according to special customer requirements. As a conclusion to the technology section, the assessment of the market for water and air filters using AC is being developed until February 2008 and only then the main characteristics of the technological process will be available, as the project should mainly concentrate in the production of the most needed final products on the national and international markets. Preparation of Investment and Operational budget / Outline of Financing Plan Research on information and data about the plant design, the possible project cost and the operational budget is underway and very much related to the precedent section. Still needs to be decided how extensive the industrial process will be (starting from coconut shell and/or charcoal, including cogeneration technology). Next meeting with potential shareholders will tackle this important issue. In addition, the market study will also give some important clues on the direction to take. B. Cost and Financing

See Appendix 3 - Cost Estimates and Financing Plan

6 C. Implementation Schedule

See Appendix 4 - Project Schedule of Activities D. Implementation Management Arrangements

The Project Management has consisted in several main activities: Formation of a group of experts to carry on the project implementation and to ensure that these experts will be able to implement the project as follows: o Team leader: LEFEVRE, Prof. Thierry, Economic and Financial Expert & Project Coordinator / Planner o Team member{s}: LE MARIER, Yves Henri, Technology Expert HERMAN, Wipapan, Community Coordinator and Interpreter LEFEVRE, Francois, Marketing Expert MUSIKAJATT, Kraisit, Assistant Community Coordinator The CVs of these experts can be found in Appendix 5. It must be noted that the Local Agricultural Expertise is brought as an in-kind contribution from the Projects Community counterparts: NGERNTHAENG, Chod, Mayor from Tap Sakae District, SURAPUN Tung Kao Tong, Assistant Chief Officer, Tap Sakae District Administration Office. Organization of Field Trips and Community meetings See Appendix 4 - Project Schedule of Activities and Appendix 7 - Field Trip Reports. Implementation of the main project activities within the 6 months time-frame, including desk activities for the preparation of the various project outputs (see Appendix 4 - Project Schedule of Activities). Establishing a Design and Monitoring Framework for delivering a set of Measurable Performance Indicators (MPI) related to Outputs/Outcomes and Activities undertaken (see Appendix 6). Reporting for the project activities according to the following schedule: o Project Inception Report, being submitted one month after signing of the LOA; o Project Mid-term Report, to be submitted two months after the start of the PDA; o Project Completion Report, to be submitted within 30 days after completion of the PDA. 4. CONCLUSION

After one month of operation the project is well on track. All experts are on board and the Community and potential local Partners are efficiently helping the project team and the EA. At this stage, it is expected that the project will go smoothly without major obstacles.

175

Appendix 16. Interim Report March 3, 2008

176

Technical Assistance Report: PDA Mid-term Progress


Report

Project Number: TA 6325 REG: Promoting Water Policies and Practices (Phase 5) PDA Start Date: 12 November 2007

Pilot and Demonstration Activity (PDA): Producing Water Filter from Coconut and Oil Palm Shells

03 March 2008

The views expressed herein are those of the consultant and do not necessarily represent those of ADBs members, Board of Directors, Management, or staff, and may be preliminary in nature.

Project Team Members

Team leader Team Members (alphabetical order)

LEFEVRE, Prof. Thierry, Economic and Financial Expert & Project Coordinator / Planner HERMAN, WIPAPAN, Community Coordinator and Interpreter LE MARIER, Yves Henri, Technology expert LEFEVRE, Francois, Marketing Expert SURAPUN Tung Kao Tong, Assistant Community Coordinator (in-kind basis replacement of Khun Kraisit MUSIKAJATT Assistant Community expert)

Community Counterparts

NGERNTHAENG, Chod, Mayor from Tap Sakae District and President of Tap Sakae Coconut Association (in-kind basis) SURAPUN Tung Kao Tong, Assistant Chief Officer from Tap Sakae District Administration Office (in-kind basis)

TABLE OF CONTENTS

1. INTRODUCTION .................................................................................................................. 1 2. SCOPE OF WORK ............................................................................................................... 1 3. IMPLEMENTATION .............................................................................................................. 2 A. Progress of Work .......................................................................................................... 2 B. Cost and Financing ....................................................................................................... 9 C. Implementation Schedule.............................................................................................. 9 D. Implementation Management Arrangements ................................................................ 9 4. CONCLUSIONS ................................................................................................................... 11

LIST OF APPENDICES Appendix 1. Location Map ............................................................................................... 15 Appendix 2. Project Cost Estimates and Financing Plan.............................................. 17 Appendix 3. Project Schedule of Activities .................................................................... 19 Appendix 4. Design and Monitoring Framework............................................................ 21 Appendix 5. Project Brochure.......................................................................................... 25 Appendix 6. BOI Privileges .............................................................................................. 27 Appendix 7. Agricultural Statistics and Information ..................................................... 29 Appendix 8a. Coconut Analysis ...................................................................................... 31 Appendix 8b. Comparative Analysis of Coconut and Oil Palm Shells......................... 35 Appendix 9. AC National & International Markets.......................................................... 37 Appendix 10. AC quality Requirements & Products...................................................... 39 Appendix 11. Technology Concept Design .................................................................... 45 Appendix 12. Third Field Trip Report .............................................................................. 47

The views expressed herein are those of the consultant and do not necessarily represent those of ADBs members, Board of Directors, Management, or staff, and may be preliminary in nature.

The views expressed herein are those of the consultant and do not necessarily represent those of ADBs members, Board of Directors, Management, or staff, and may be preliminary in nature.

1.

INTRODUCTION

The Pilot and Demonstration Activity (PDA) seeks to determine the feasibility of producing lowcost water filters mainly from coconut (and alternatively from oil palm shells), and to define an appropriate public-private partnership business model. The Letter of Agreement (LOA) between ADB and CEERD the Executing Agency (EA) was signed on November 12th, 2007 and the activities planned for a 6 month period started with a field visit on November 14th, 2007 with the objective of meeting the local coconut producers and the authorities from Tap Sakae District (Prachuab Khiri Khan Province). This field visit was then followed by several other visits with the objective of gathering more information and data on the local conditions for the Activated Carbon (AC) project to be set up in one of Thailands biggest coconut production areas, as well as to identify and to start discussions with potential shareholders to be involved in the project when the construction and operation of the AC plant will hopefully start. 2. SCOPE OF WORK

The PDA targets a region that is one of the major producers of coconuts in Thailand and also one of the poorest. The Local Authorities of Tap Sakae have recognized the need to hasten socio-economic development of the Province, through an integrated cluster development of local industries, such as an AC processing factory and production of low cost water filters for the domestic and international markets. The pre-feasibility study will combine field activities and desk work and will look at following aspects: Stakeholders: o Meeting with local producers and cooperatives o Meeting with local community and local administration o Meeting with coconut processing industries Institutional and Legal Framework: o Meetings with relevant authorities at the local and provincial level Potential resources (Feedstock and AC Markets): o Identification of feed stock potentials and quality requirements o Identification of potential AC markets o Assessment of quality requirements o Assessment of market for water and air filters Technology and Process: o Evaluation of the different technologies and processes o Finalization of conceptual design o Preparation of investment and operational budget Preliminary Environmental Impact Assessment o Emission potential evaluation o Pre-assessment of CDM potential Outline of Financing plan: o Economic analysis with sensitivity analysis o Identification of Financing sources and Project implementation plan

2 3. A. Progress of Work Introduction Following the signature of the LoA between ADB and CEERD on November 12, 2007, the EA initiated activities scheduled in the PDA work plan, on 14 November 2007, with an Inception (1st) Field visit to Thap Sakae District to meet with the local authorities and the community, followed by other visits on December 6th, 2007 and later on February 5, 2008 to meet with other stakeholders and potential shareholders. A map of the localization of Tap Sakae is given in Appendix 1. Stakeholders: Since the inception of the project, the EA wanted to create a strong link between the project team and all the stakeholders involved, and/or to be involved in the future, with the development of an Activated Carbon (AC) facility in the Thap Sakae District, Prachuab Kirikan Province of Thailand. The EA then organized a series of three field trips to Thap Sakae to meet with all possible stakeholders. The objectives of these field trips were: to get a clearer understanding of the local coconut industry: visiting the fields, the factories and collecting data from local or provincial authorities; to identify the stakeholders, by meeting the local growers and their associations, the processors of coconut and charcoal, the local (district and sub-district municipalities) and provincial authorities (mainly the agriculture administration); to explain the ins and outs of the project and to set up with the stakeholders the next steps of the project activities. To prepare a large public hearing to present the project to the district community at large, and to gather their sentiment and eventually their approbation for the project development. IMPLEMENTATION

From the first three field trips, the EA was able to identify the local coconut growers and processors of coconuts, grouped under several local Coconut Associations which will be the potential partners for setting up the projected AC plant. On November 14th, 2007, a mini-public hearing was held with the sub-district coconut growers and processors, and their participation and interventions showed that a large majority was enthusiastic to supporting the development of the AC plant. The community also requested that a brochure in Thai language describing the project and its outcomes and impacts be prepared by the project team and be distributed to the community at large before the organisation of the public hearing now scheduled to be implemented on March 26, 2008. From the official side, both municipality and agriculture representatives have been involved for some times in this project concept and they have already provided information and data about the coconut sector and they see in this project a good chance to improve the socio-economic situation of the province, by creating jobs, improving incomes of families, etc..., as well as the potential for developing in more efficient way the local coconuts processing industries (coconuts and charcoal production particularly). It is in the intention of the project initiators and promoters to create a small training center associated with the AC plant to help local farmers and coconuts growers and processors to improve their incomes through the creation of additional complementary cultures, improving the productivity and quality of the coconut production and also improving their coconut shell

3 charcoal production through better techniques and better management, as their actual procedures and techniques are technically unsophisticated and simplistic, leading often to losses of material and of quality when producing charcoal. The AC plant will have an analysis laboratory to analyse the quality of the feedstock received and of products all along the production chain. This will be of much help for the evaluation of the production of coconut and of charcoal of the district community and to help them in improving the quality of their products. More visits to Tap Sakae District have been scheduled before the end of the project, but one will be of particular importance, and it is the large public hearing to be organized on the 26 March, 2008, at the Thap Sakae district community meeting place, with a large participation of the local population (more than 200 persons are expected). This meeting will have as main focus to present the project and to evaluate the way the community perceives this project and finally to know if they approve and support its development in their district. On the request of the Community, the EA has prepared a brochure in Thai describing the project concept design and the project outcomes and impacts, which will be distributed to the Thap Sakae district community, two (2) weeks before the implementation of the public hearing scheduled to be held on March 26, 2008. The invitation to the public hearing will be sent directly by the district chief to all members of the community (1,000 copies of the leaflet will be distributed at this occasion). (See Project Brochure in Appendix 5 and the Third (3rd) Field Trip Report in Appendix 12) Institutional and Legal framework: The Ministry of Industry and its Department of Industrial Work, as well as the Office of the Board of Investment (BOI) will be the relevant institutions regarding the implementation of the AC manufacturing and possible production of water filters project. Apart from the Ministry of Industry, a certain number of other line ministries should also be involved in the development of this project. They include: Ministry of Finance, Ministry of Commerce, Ministry of Interior, and Ministry of Energy. During the 1st half of the project, the EA experts have gathered thorough information from all relevant institutional and legal entities in relation with the project and have prepared clear and detailed information concerning the administrative steps and legal aspects linked with the development of an activated carbon industry in Thailand. The BOI has also been contacted and has given a promising answer concerning the potential granting of BOI privileges to the AC project. Of course, the final and formal decision can only be obtained when the project is set-up and a formal request is sent to the BOI. (See BOI privileges in Appendix 6) Potential Resources (Feedstock & AC Market): Potential resources in the case of production of activated carbon from coconut shells refer mainly to: (i) identification of feedstock (coconut shell) potential and of the quality required to produce activated carbon; (ii) identification of potential national and international activated carbon off-takers; and finally (iii) the quality requirement of the activated carbon products traded on the various markets.

4 Identification of Feedstock Potentials and Quality Requirements:

9 Feedstock Potential A substantial part of the land in Thap Sakae district is used for coconut plantations: around 80% of the cultivated area is covered with coconut trees (i.e. 136,788 rai ~ approximately 220 km2). Figures provided for the district show an average number of 20 to 25 trees per rai with an average tree production of 5 to 10 nuts every 30 days. As a result the number of nuts is huge: 275,343,300 nuts per year, or 754,365 nuts per day. At present, neither all coconuts are processed, nor are all parts of coconuts utilized. The actual process is done locally, by land owners with quite primitive techniques. Moreover, the installed capacity for coconut processing doesnt allow, at present, to treat all available coconuts. The local coconut processing consists in: - Coconuts cracked to open, - Water collected and sold, - Flesh removed and sold to be either used for coconut cream or coconut oil after drying, - Pressed cake from the coconut oil production used as animal fodder, - Coconut shells being processed for local charcoal production, later crushed to make charcoal briquettes, - Fiber being compacted and baled, while the dust is disposed in most cases, posing a problem of bug contamination, waste management and fire risk. The coconuts that are not processed locally are sold at low price and transported to the central part of Thailand for further processing. All this process has been carefully described in details and illustrated with photographs in the 1st field trip to Thap Sakae Minutes (14 November 2007) given with the project Inception Report. The table below translates the production of coconuts into the volume of inner shell being available for feeding the charcoal manufacturing process. In addition to Prachuab Khiri Khan Province, the volume is also estimated for the neighboring southern Province: Chumporn.
ESTIMATED POTENTIAL OF RAW MATERIAL IN CHUMPORN & PRACHUAP KHIRI KHAN PROVINCES
PLANTATION AREA Unit Coconut trees area* Whole nuts (Tons /Year) ** Raw Inner Shell Potential (Tons /Day) ***

Mueang Prachuap Khiri Khan Kui Buri Thap Sakae Bang Saphan Bang Saphan Noi Pran Buri Hua Hin Sam Roi Yot Prachuap Khiri Khan Total Area Chumporn Total Area

Rai Rai Rai Rai Rai Rai Rai Rai Rai Rai

48,991 12,219 136,788 152,621 77,816 4,616 1,387 7,046 441,484 372,629

132,276 32,991 369,328 412,077 210,103 12,463 3,745 19,024 1,192,007 540,000

min 43 11 121 135 69 4 1 6 392 164

max 45 11 126 141 72 4 1 7 408 197

* figures from the Office of Agricultural Economics, 2007 update ** estimated, according to the average of trees/rai, nuts/tree and nuts weight ** estimated, according to a min/max assumption for inner shell / whole nut

Sources: Office of Agricultural Economics, Questionnaire and own calculations

The project is considering an AC production of around 10 tons per day, meaning a volume of 100 to 150 tons of raw coconut shells processed per day (including shells for the production of

5 electricity for the process). This is on line with the output figures from the Province, before taking into account the present uses of the shell, mostly local charcoal manufacturing. Chumporn Province, like most of the southern Provinces of Thailand, and Malaysia or Indonesia as well, presents consequent areas planted with Palm trees. It must be noted that shell from oil palm trees are also suitable for production of charcoal and eventually AC. However, the project has not yet found at this stage any analyses proving that oil palm shells activated carbon has the same capabilities as the activated carbon from coconut shells. However, the structure, consistency and chemical composition of oil palm shells are very close to that of coconut shells, which allow thinking that oil palm shell could be a good feedstock for production of high quality activated carbon. However, more analyses would need to be performed to demonstrate above hypothesis, and which cannot be implemented in the framework of this PDA for limitation of funds. (See some Agricultural Coconut Statistics & Information in Appendix 7) 9 Feedstock Quality From the field visits implemented, samples of coconuts shells, charcoal and coco pith were collected in order to assess their chemical, physical and thermal characteristics and composition as they will be the raw materials to be used for AC production. The analyses performed on above coconuts residues show that the quality of the coconuts residues (shells & coco pith) available in the Thap Sakae District are of good quality and offers sufficient guarantees for their use as feedstock in the production of activated carbon. As regards the charcoal already produced in Thap Sakae district, analyses shows that there is a good margin for its quality improvement (probably through technological process and management improvements). (See the main results of coconut analysis in Appendix 8a, as well as a comparative analysis of coconut shell and oil palm shell in Appendix 8b). Market Status and Identification of Potential AC Markets (National and International)

It is forecasted that the world demand for virgin AC will expand an average of 5% annually through 2010 to 1.2 million metric tons. The most mature markets (North America, Western Europe and Japan) will continue to account for over half of demand in 2010, despite slower than average growth. Greater growth opportunities will generally occur in developing geographic markets, primarily the emerging industrial economies of Asia. China will increase its share of the global AC market to around 13 percent in 2010. Smaller markets, including Latin America, Eastern Europe and the Africa / Middle East region, will also record above average gains. Production of AC varies significantly from region to region, with the Asia/Pacific region and North America accounting for the majority of overall production. This concentration of production is related to both the level of demand in these regions and the ready availability of low cost raw materials required to produce the AC. The former ensures a market for AC, while the latter allows for production at a competitive cost. The largest producers of AC in the world are China, the US and Japan -- with the Philippines, India, Sri Lanka and Thailand also important. Overall, the Asia/Pacific region contains the highest production capacity for AC, at 770,000 metric tons in 2005. Unlike other regions, where a relatively small number of companies account for the majority of capacity, in this region there are an estimated 80 to 100 different manufacturers of AC. Plants also generally tend to be much smaller than in other regions, with

6 most having rated capacities of less than 10,000 metric tons per year?. The greatest concentration of these small producers occurs in China (40 to 50 producers) and in India (12 to 15 producers). (See some statistics on the AC National & International Markets are shown in Appendix 9) The following two Tables show the wide range of industries that could be targeted as future off-takers. It is important to note however that the main utilization of Activated Carbon is in the liquid phase and more precisely for water treatment purposes.
Liquid phase Type of industry Potable, process, ground and waste water treatment Goldmines Electroplating Alcohol Caffeine removal Petrochemical industry Sugar/glucose Description of process Application area

Adsorption of organic impurities Chlorine and ozone destruction, removal of (excess) fertilizer Recapture of gold from cyanide Treatment of mine dumps solution Metal coating by electrolyses Acid purification, odour control Taste and colour improvement Production of wines and distillates Extraction of caffeine Production of tea and coffee Condensate treatment, oil Feed water for (high pressure) removal boilers Colour and taste improvement Beet and cane sugar, glucose

Note: Above list constitutes a general survey of applications and does not pretend to be exhaustive Sources: DACCO B.V. Gas phase Type of industry Dry cleaning, fibers, degreasing of metals, coatings, printers, film/videotapes, peppermills CO2-production Breweries Gasmasks Cigarettes Air-conditioning Waste disposal Catalyst Natural gas Domestic use Transportation of chemicals Sources: DACCO B.V. Description of process Removal of organic solvents from gas streams CO2 purification Adsorption of organic fumes, war gases Taste and flavour control Odour control, removal of corrosive gases Odour control Use as catalyst or catalyst carrier Purification, H2S and/or Hg removal Removal of aromatic components Adsorption/desorption Application area perchloorethylene, methylene chloride, ethylacetate, toluene, benzene, etc. Removal of alcohols, amines and Mercaptans Industry, army filter tips Airports, office buildings, museums, etc Removal of Mercaptans, chlorated hydrocarbons phosgene production, reaction processes MEROX treatment Kitchen hoods, refrigerators, panel filters Removal of toxic gases

Identification of the national, regional and international players is currently under preparation.

7 AC Quality Requirements and Products

The fact remains that for having a commercial use, AC must show regular characteristics. That is why the AC industry in collaboration with standard organizations have elaborated standard tests for evaluating physical and adsorptive characteristics of AC. The plant design will include a laboratory to analyze and control the quality of the input/output, especially needed if the activation process is tailored at times according to special customer requirements. It must be reminded that a great range of AC is available on the markets worldwide, each one with different physical and activity properties: first, because of the raw material used for the production; second, of its form (granular, powdered or pelletized) and third, of specific activation characteristics making it suitable for a special use. Moreover, AC prices may greatly vary according to the quality or characteristics, the manufacturing process, the grade but also the end use of the product. Granular or extruded AC tend however to be more expensive than powdered AC. (See AC Quality Requirements & Products in Appendix 10) Technology and Process: There are two basic activation techniques used to produce AC: Chemical Activation where the raw material is impregnated with a strong dehydrating agent (usually zinc chloride, phosphoric acid or potassium hydroxide), and then heated to temperatures between 450 - 900C. Physical Activation where the raw material is activated with steam under inert atmosphere at high temperatures between 900 1100C, depending on the raw material used. The industrial process for activating carbon can be done in two ways: The first option is to integrate carbonization and activation phases. In that case, raw coconut shell is used as raw material and the carbonization of the shell precede the second step the activation phase. It is important to note that these two phases have to be done separately because charcoal material must be cooled after being carbonized, before it can be activated. The second option, commonly used by AC manufacturers worldwide, starts directly from the activation stage, using coconut shell charcoal as raw material. Charcoal preparation consists in crushing it as a fine powder with a rotary crushing equipment to feed the kiln. AC produced by steam activation generally exhibit a fine pore structure, ideal for the adsorption of small molecular weight products and for applications involving low contaminant concentrations. Steam activation is generally used for coal-based, coconut shell and grain based activated carbons. The AC plant will use steam activation, fitting perfectly with the needed output and avoiding any problem linked with environmental hazards from the use of poisonous chemicals. After discussions with the Thap Sakae Stakeholders concerning the quantity of available coconut shells in the district and of the present quality of the coconut charcoal produced by the Thap Sakae district charcoal processors, the EA has arrived to the conclusion that the AC plant should produce it own charcoal from coconut shells to ensure the best production of AC, at levels of quality as required by the national and international market players. The conceptual design of the plant has then been prepared and finalized, and the selection of the technologies to be used for the various plant processes is now under scrutiny. In particular, it is envisaged at this stage that the electricity could be generated using coconut shells or

8 charcoal through the use of an industrial gasifier. The production of steam needed in the activation process will most probably come from the recuperation of heat from the flue gases produced in the coconut charcoal production. The environment impacts of the plant will be reduced at the maximum through the recuperation and filtering of all emissions. The EA is now evaluating the investment cost this plant, as well as its operational budget costs. Appendix 11 presents the AC Technology Design Concept which comprises of several main units, such as: Stockages of coconut shells and coconut charcoal; Production of coconut shell charcoal (batch process); Activation of the coconut shell charcoal (continuous process); Preparation and conditioning of the activated carbon (packaging, filters, etc); Stockage and dispatch of the final products; Utilities (electricity & steam production, water treatment, fire protection, etc). The detailed technical design of the plant would need to be prepared during the full feasibility phase of the project, if the present pre-feasibility study demonstrates that the project is economically and financially feasible, environmentally sound, well accepted by the community and present good prospects for replicability in other provinces of Thailand and/or in other Asian countries. Preliminary Environmental Impact Assessment: As at this stage of the preparation of the Interim report, the technology and processes are still under final identification, and it is not possible to start the environmental evaluation of the project and to estimate if there is the potential for a CDM development. Outline of the Financing plan: As soon as the capital cost and operative costs of the AC project will have been estimated, an economic and financial analysis of the project will be performed, to valuate the main characteristics of the project, such as Project Internal Rate of Return (IRR) and Project Net Present Value (NPV) of the project. Sensitivity analysis will also be implemented on the most sensitive parameters and variable of the project, and including: price of feedstock, price of AC in the national and international markets, fix and variable costs, etc to determine their impacts on the project IRR and NPV. Similarly, an initial simulation will also be performed on the financial characteristics of the loan taking into consideration the loan interest, duration of the loan, grace period, etc Several financial indicators, such as the Financial IRR (FIRR) , Equity IRR (EIRR), Debt IRR (DIRR), as well as other financial indicator such as: LLCR and ADSCR will also be used to evaluate the feasibility of the project. A financial scheme for the financing of the AC plant in Thap Sakae will also be proposed, as well as some indications on the potential financial institutions which could be involved in the project financing. Finally, a road map will also be proposed for the continuation and development of this project, as well as on the potential replicability of this project in all the ASEAN region, including: Cambodia, Indonesia, Philippines, Vietnam and Thailand.

9 B. Cost and Financing

See Appendix 2- Cost Estimates and Financing Plan C. Implementation Schedule

See Appendix 3 - Project Schedule of Activities D. Implementation Management Arrangements

Since the start of the project, the Project Management Team has implemented several main activities, such as: Setup of the Team of Experts: The following experts are at present part of the Team: Team leader: LEFEVRE, Prof. Thierry, Economic and Financial Expert & Project Coordinator / Planner o Team member{s}: LE MARIER, Yves Henri, Technology Expert HERMAN, Wipapan, Community Coordinator and Interpreter LEFEVRE, Francois, Marketing Expert Compared to the Team of Expert initially set-up and approved by ADB at the time of the Inception Report, and due to the departure of two experts, some modifications, which do no modify at all the overall quality of the Team, have been introduced in the composition of the Team of Experts. These changes concern mainly the position of the Environmental Expert and of the Assistant Community Expert. New experts have and will be selected to carry on with the following tasks: o Environmentalist (to be selected after the technical design is finalized) The Assistant to the Community Expert will be brought as an in-kind contribution from the local administration (to help mainly with the implementation of the public hearing preparation and implementation) and will be as follows: SURAPUN Tung Kao Tong, Assistant Chief Officer, Tap Sakae District Administration Office. In addition, the Local Agricultural Expertise is also brought as an in-kind contribution from the Projects Community counterparts: NGERNTHAENG, Chod, Mayor from Tap Sakae District Organization of Field Trips and Community Meetings: Up to the time of the preparation of this Interim report, three (3) Field trips have been implemented to Thap Sakae to meet with the multiple project counterparts parties of the project, as well as with the local community at following dates: o o o 14 November 2007 6 December 2007 5 February 2008

During the latest field trip, it was agreed with Thap Sakae authorities that a public hearing

10 will be organized at the district level on 26 March 2008 to allow the project team to present the project to the community at large, and to allow the community to show it opinion concerning the development of this project. Appendix 3 shows the Project Schedule of Activities and Appendix 12 the third (3) Field Trip Report. Implementation of the Main Project Activities: The project is going smoothly, as scheduled, and the various implemented and on-going activities are shown in attached Appendix 3 - Project Schedule of Activities). In particular, since the start of the project, following activities have already been implemented and finalized: o Stakeholders: 9 Meeting with local producers and cooperatives 9 Meeting with local community and local administration 9 Meeting with coconut processing industries Institutional and Legal Frameworks: 9 Meetings with relevant authorities at the local and provincial level and preparation of a report on institutional legal framework in Thailand. Potential Resources (Feedstock and .AC Markets): 9 Identification of feed stock potentials and quality 9 Identification of the potential AC market 9 Assessment of quality requirements Technology and Process: 9 Evaluation of the different technologies and processes 9 Finalization of conceptual design

The other activities which are now under implementation are shown herewith after: o o o o Stakeholders: 9 Preparation of a public hearing on 26 March 2008 Potential Resources (Feedstock and .AC Markets): 9 Assessment of market for water and air filters Technology and Process: 9 Preparation of investment and operational budget Preliminary Environmental Impact Assessment: 9 Emission potential evaluation 9 Pre-assessment of CDM potential Outline of Financing Plan: 9 Economic analysis with sensitivity analysis 9 Identification of financing sources and project implementation plan

Establishing a Design and Monitoring Framework (DMF):

The proposed Measurable Performance Indicators (MPI) and deliverables which have been selected in the framework of this PDA and their actual level of accomplishment is shown hereafter: Conceptual design Finalized; Technical and financial pre-feasibility analysis - On-going;

11 Market analysis and potential for activated carbon in Thailand and other ASEAN countries Finalized; Identification of potential buyers of activated carbon in Thailand and overseas On going; Identification of potential raw material suppliers in the Southern part of Thailand On-going; Identification of coconut Industries in the areas around Tap Sakae that processes coconuts Finalized; Identification of potential for production of water filters in Thailand On-going; Identification of product quality requirements - Finalized; Upscaling potential of the project in other ASEAN countries On-going.

(See the DMF Table in Appendix 4). Reporting of Project Activities according to the following schedule: o o o Project Inception Report, has been submitted on: December 15, 2007 (Inception Report approval was received on January 17,2008) Project Mid-term Report, being submitted on March 03, 2008; Project Completion Report, to be submitted by May 05, 2008 or earlier, if possible. 4. CONCLUSIONS

Three month after the start of the project, activities are well on track. Experts have been advancing in their respective fields of expertise and have been preparing the expected reports. The Community and potential local Partners are also efficiently helping the project team and the EA in the implementation of the various activities, gathering of the necessary administrative and quantitative information and statistics need by the project, and in the preparation of the public hearing to be held in Thap Sakae District on 26 March 2008. At this stage, it is expected that the project will go smoothly without major obstacles.

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