What is a market feasibility study or report and why would you do one in bioeconomy related matters? A market feasibility study is an integral part of the due diligence process in any bio related project. When a lender or investor considers putting money at risk, or when a company is considering an acquisition or new product line, they must consider all risks that may jeopardize the investment. When a project owner or developer is sourcing financing, especially for any type for a new project or new technology, they should be prepared with such a report when presenting to available lenders or investors. Understanding the exact bio market and the risks around that market, as well as what might be done to mitigate these risks, is central to the success of any investment request, and ultimately to the stability of the company.
The basic information and questions that should be answered from any market feasibility study include:
- How large is the market for the product and is it growing or declining?
- What is the regulatory framework that affects the market and do the rules and regulations influence the size and or pricing for the product?
- Is the product a commodity, subject to pricing by the bids or asks on an exchange, or is it a specialty product with negotiated pricing, and how easily can it be replaced?
- What is the competitive landscape for the product, i.e. how many companies are in the market and how do they perform?
- What separates this company from its competitors?
- What are the market risks, what is the likelihood that these risks might be realized, and what steps can you take to mitigate them?
This obviously just touches the surface of a full market feasibility report. The point to remember is that it is imperative that a solid study be done when considering investing your own, your investors or your shareholders money. Many investors have in-house resources to perform parts of this assessment, but few have both the technical, economic and scientific resources to do all parts.
Large renewable energy and biochemical consulting firms certainly have experts in the more common areas like of bio and renewable fuels, biomaterials, biomass and biomass power, biomaterials, biochemicals and biotechnologies. But, they also have an expertise in a wide variety of specialty services like expert witness testimony, techno-economic analysis, due diligence, feasibility studies, budgeting, project management, technology assessment, insurance, due diligence, risk management, benchmarking, intellectual property, HAZOP, financial modeling, competitor analysis, and assistance with RIN and Low Carbon Fuel Standards (LCFS) matters. These firms should also be able to assist with other things like Aspen plus, logistics, bioreactor design, municipal solid waste remediation, syngas and bio-based product development, carbon credits, climate change analysis, environmental permitting, equipment sales, experimental validations, grant writing, IP strategy, life cycle analysis (LCA), plant operations, plant sales and auctions, and risk analysis (FMEA).
Lee Enterprises Consulting is the world’s premier bioeconomy consulting group, with over 150 highly qualified experts serving in all these areas, including bio market feasibility studies. Take a look at our experts and the services we provide. Most of our experts are also available to advise and serve as expert witnesses in bioeconomy litigation matters. For the larger projects, we specialize in putting together full service, interdisciplinary teams with one point of contact. Call us at 1+ (501) 833-8511 or email us for more information. See also: Can Techno Economic Analysis Help You?