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Benchmarking Costs of Starches, Syrups & EthanolForecasting production costs by raw material & location
www.lm
c.co.uk
Brochure
Objectives of the service
A key question facing any agro-processor of carbohydrates, whether producing starches, syrups or ethanol, is:
How do your operations stack up against your competitors’?
If you are looking to make a new investment:
Do the financials look attractive?
LMC’s new service, Benchmarking Costs of Starches, Syrups & Ethanol, answers these questions and will help guide your decision-making.
The core of the service is the ‘LMC Global Cost Database’, which forecasts:
Raw material costs Co-product values Processing costs
The service covers 11 products and 5 carbohydrate sources in 18 countries.
You can select product, feedstock, process, location and plant scale to tailor the cost model to your specific business needs.
© 2017 LMC International. All rights reserved. 2
We present ex-factory costs across a large selection of starch, syrup and ethanol products.
Note: Costs can also be prepared for lysine, MSG, lactic acid and citric acid. Please contact LMC if these products are of interest.
Starches
Native corn starch
Native wheat starch
Native cassava starch
Acid-thinned modified starch
Cationic modified starch
Oxidised modified starch
Syrups
Glucose (fermentation grade)
Glucose (food grade)
HFS (separate costs for 42 and 55)
Ethanol
Ethanol
Industrial alcohol
Benchmarking costs across products …
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… and raw materials, processes and countries
The service covers 5 key carbohydrate sources – corn, wheat, cassava (tapioca), molasses and sugar/cane juice – across 18 major producing countries for various processes.
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Region Process Cassava Molasses Sugar Cane JuiceWet
MillingDry
MillingWet
MillingDry
MillingWet
MillingDirect
FermentationDirect
FermentationMilling
Asia China India Indonesia Japan South Korea Thailand Vietnam
Europe France Hungary Russia Ukraine
S America Argentina Brazil
N America Canada Mexico US
Other Australia South Africa
Corn Wheat
Clients can select the product and country of their choice.
This means you can purchase specific combinations of product & country to ensure that the service is directly relevant to your business needs.
For example, you can choose 3 product-country combinations to compare costs of producing:
• glucose (food grade) in France, from corn and wheat
• glucose (food grade) in China, from corn
• glucose (food grade) in the US, from corn
Optional Extra
We can extend the service for individual subscribers to drill down to costs at a plant-specific level.
We do this by adapting the parameters of LMC’s in-house model according to the product, location, capacity, raw material and process fuel of the target plant.
The details of this plant-specific analysis are agreed with the client.
Choose a product and country
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We focus on the major international benchmark prices for the main raw materials:
Corn No.2 yellow corn, f.o.b. US Gulf
Wheat HRW (hard red winter), f.o.b. US Gulf
Cassava roots 25% starch, NE Thailand
Sugar ICE No.11 f.o.b., first position futures
Molasses 43% TSAI (total sugars as invert), Houston, Texas, USA
Raw material costs – global
Raw material costs are the single most important expense when it comes to processing grain, tuber and sugar crops.
We explain the factors that drive the prices of different crops and forecast raw material prices to 2030.
Price ratios of 4 raw material to corn
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0%
150%
300%
450%
600%
0%
50%
100%
150%
200%
1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016
Sugar
Whe
at, m
olas
ses a
nd ca
ssav
a
Wheat Molasses Cassava Sugar
For any processor, it is the local price of raw materials that matters. We examine local raw material prices in relation to world benchmark prices. • Are there particular locations or crops that deliver a competitive advantage? • We forecast local prices for each raw material, for each featured country, to 2030.
Asia’s carbohydrate balance Asian corn prices
Raw material costs – local
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-20
-10
0
10
20
30
40
50
1993 1998 2003 2008 2013
Mill
ion
tonn
es o
f sta
rch/
suga
r equ
ival
ent
Cassava Corn Rice Sugar Wheat
Deficit
Surplus
0
50
100
150
200
250
300
350
400
2000 2002 2004 2006 2008 2010 2012 2014 2016
US$
per
tonn
e
US Corn FOB US Corn in Asia Chinese corn FOB
Co‐product values and their outlook
Price ratios of CGF and soybean meal to corn Co-products from grain processing are an important source of revenue and must be taken into account when estimating the net cost of grains.
As part of the analysis we therefore:
• Examine the trends in co-product values, relating these movements to the price of the raw materials
• Identify locations that have favourable fundamentals that support co-product values
• Forecast co-product values to 2030 for each location, deriving the outlook for net grain costs Corn and wheat co-products
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30%
60%
90%
120%
150%
180%
210%
50%
100%
150%
200%
250%
300%
350%
1986 1996 2006 2016
CGF
Soyb
ean
and
soyb
ean
mea
l
Soybean meal CGF
Characteristic Main end-use Price driverWET MILLINGCornCorn gluten feed (CGF) Fibre/protein Livestock feed CornCorn gluten meal (CGM) Protein Poultry feed Soybean mealCorn oil Oil Food Oils complex/crude oilWheatBran Fibre Ruminant feed Feed wheatVital wheat gluten (VWG) Protein Bread-making, Corn/soybean meal
High value feedDRY MILLINGCorn distillers' dried grains (Corn DDG) Fibre/protein Livestock feed Grains/oilseed mealsWheat distillers' dried grains (Wheat DDG) Fibre/protein Livestock feed Grains/oilseed meals
Costs are broken down into:
• Cost item: labour, capital, utility (water, fuel, chemicals, etc.)
• Plant scale: small, medium and large
• Energy used: gas, coal or bagasse
Time coverage:
• Historical estimates from 2000 through 2016, with forecasts to 2030
Processing costs
LMC has developed a unique, comprehensive database of carbohydrate processing costs by product, raw material, process and location. We have estimated costs back to 2000. This is extremely valuable to provide a clear understanding of the trends in processing costs and their key drivers.
Full processing costs of fermentation glucose
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0
25
50
75
100
125
150
175
200
225
250
US (corn dry,gas)
Thailand(cassava, gas)
France (wheatdry, gas)
China (cornwet, coal)
US (corn wet,gas)
France (wheatwet, gas)
US$
per
tonn
e, d
ry b
asis
Capital Labour Energy Other
These costs are provided in a user-friendly database presented in Excel pivot tables.
On this and the following pages, screen shots display the kind of data our database provides and the ease of accessing the data.
Here you can see how the database allows selection of product and type of processing.
Full costs of production – LMC's database of products …
LMC prepares estimates of the full costs of production by product, raw material, co-product credits and processing – with forecasts to 2030.
These screen shots are for illustration and display random data, rather than actual results.10
… countries & raw materials …
Clients can select costs for 18 countries and 5 raw materials.
These screen shots are for illustration and display random data, rather than actual results.11
Clients can select from 5 categories of costs – not just total costs – and the years 2000 through 2030.
… and types of costs & years
These screen shots are for illustration and display random data, rather than actual results.12
Deliverables and contacts
Deliverables
Clients can purchase costs for the products and countries that they need and will receive:
• LMC Cost Database
− Detailed results in Excel for each product and country selected
− Explanation of LMC’s unique methodology for estimating processing costs
• An online presentation/meeting with senior LMC staff to discuss and interpret the findings & forecasts
Optional Extra
Plant-specific costs estimates
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For further information, please contact:
Philip Digges, UK +44 1865 [email protected]
Andrea Kavaler, USA +1 212 586-2427 [email protected]
Oxford4th Floor, Clarendon House
52 Cornmarket Street Oxford OX1 3HJ
UK
T +44 1865 791737F +44 1865 791739
New York1841 Broadway
New York, NY 10023USA
T +1 (212) 586-2427F +1 (212) 397-4756
Kuala LumpurB-03-19, Empire Soho
Empire SubangJalan SS16/1, SS1647500 Subang Jaya
Selangor Darul EhsanMalaysia
T +603 5611 [email protected]
Singapore16 Collyer Quay #21-00
Singapore 049318Singapore
T +65 6818 9231
