Farmer diversification through anaerobic digestion

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2 Farmer diversification through anaerobic digestion Presented by: Mike Morris CEO and Andrew Williams Tarling, Sales Manager, RABBITT Recycling (UK) Ltd 13th May 2010

3 INTRODUCTION RABBITT = Recycle All Batteries Bulbs Inkjets Toners and Telephones Rabbitt Recycling (UK) Limited is not a waste management company... instead we regard waste as a redundant asset we recycle in excess of twenty dry waste streams as well as batteries and fluorescent tubes We help businesses typically reach recycling rates of 85% or more, achieve considerable reductions in waste disposal costs and an income from brokered materials.

4 ANAEROBIC DIGESTION BUSINESS MODEL - RATIONALE Businesses generating small volumes of dry recyclates i.e.: cardboard, soft and hard plastics, glass and metals do not fit RABBITT s core business. Small businesses will typically pay between 12 and 20 per 240 t litre bin lift, regardless of weight / contents, whether segregated or mixed. Food waste, even if segregated on site, will often be mixed with general waste / recyclable materials upon collection. General dissatisfaction with service levels of national companies. Food waste and plastic will be banned from land fill, necessitating alternative routes of disposal.

5 BIOPLEX Part of Burdens Limited, a leading supplier of civil engineering and building materials to the infrastructure, environmental and industrial markets. Developed a unique dry anaerobic digestion treatment for organic wastes = Portagester 30 sites using Bioplex patented technology in operation in Germany Five Portagester systems, handling from tons pa to 10,000 30,000 tons pa. Larger Portagester currently commissioned in conjunction with WAG. RABBITT has exclusive agreement to act as sales and marketing arm for the four smaller units (handling from 1 50 tons per week)

6 BIOPLEX PROCESS Replicates the action of a cow s stomach. Food waste and organic matter fed through a maceration unit into the mouth and is sealed with an insulated cover. Active bacteria are added and the contents are heated for pasteurisation. After 2 to 4 days of digestion, screened liquor is pumped to the 2nd stage AD, producing methane rich biogas. Methane capture can be controlled to maximise optimum gas output. Biogas may be used in a boiler or an engine to generate electricity and heat, and can be used to help keep the Portagester at the correct temperature. Electricity generated can be used to provide power elsewhere on the site or, in the case of larger systems, exported. The solid fraction is relatively odour free and can be safely spread onto farmland or composted, which breaks it down more effectively. The composted material which is nitrogen rich, slow release is an excellent natural fertilizer and growing medium.

7 THE PORTAGESTERS PG1 AD System Tonnes Per Week PG2 AD System - 2 to 7 tonnes per week PG3 AD System - 15 to 25 tonnes per week PG4 AD System Tonnes Per Week

8 MILK ROUND COLLECTIONS Situate a MRF with AD unit and other recycling equipment on a farm Research food producing businesses within 5 10 mile radius of the farm Contact all relevant businesses within radius: pubs, restaurants, cafes, holiday parks, schools, sports facilities, food producers etc

9 ONE STOP COLLECTION / FIXED FEE Offer a fixed priced collection for: food waste collected in biodegradable potato starch bags loose cardboard tins / other metals soft and hard plastics glass

10 THE PROCESS RABBITT administrates collection schedule Reprocessors collect reconciled dry wastes, each generating a revenue stream Dedicated vehicle collects all waste streams on milk-round Waste streams reconciled at farm. Bales of cardboard and plastic formed Food waste and other organic waste fed into AD Unit 1 ton of organic waste = 0.25 ton of high grade fertiliser

11 FARM DIVERSIFACTION RABBITT has been working with RDA to use business model as a means for farm diversification. RDA is a specialist company offering a range of quality farming consultancy services with expertise in providing business advice for farmers and landowners who are minded to diversify away from traditional farming interests. RDA have advised that RABBITT business model is positively viewed as a means for farmers to diversify, eligible for grant funding of between 60% - 80% of the capital equipment value. RABBITT and RDA are working together to develop a number of farms known to RDA. We envisage the ownership of each business unit as being shared between RABBITT and all relevant parties.

12 FINANCIAL INVESTMENT Equipment: Anaerobic Digestor Portagester PG2a 44, Maceration Unit 12, Vertical Mill-sized baler 13, Twin Chamber Baler 13, Plastic Granulator 12, Glass Imploder 6, Total = 101, Resource: Location: farm with up to 5,000m2 available space, hard standing & three phase electricity

13 RUNNING COSTS Initial three month period will incur maximum running costs of 10,000. As soon as a site is secured, RABBITT would rapidly implement the sales and marketing plan to identify all food waste producing prospects within the specified geographical radius. Around 48 customers per week will be needed to break even, based on extremely conservative volumes of dry recyclates and food waste. RABBITT is confident that the break even point will be surpassed well within the initial three months, meaning the initial 10,000 running costs are likely to be considerably overstated. The following financial model details how RABBITT has determined the break even point.

14 Number of customers 48 Redundant Assets: Weekly Values Running Costs Plastic p/t card p/t Glass Metal p/t Operator Wage pw. Material Values Vehicle Hire pw Plastic kg card kg Glass Metal kg Tmkt Wage pw Material Weights Total Running Costs pw Plastic card Glass Metal Revenue Tonnes Tonnes Tonnes Tonnes Weekly Revenue Total Weight Monthly Revenue 3, Plastic card Glass Metal Annual Revenue 37, Total Revenue Other consumables: weekly values Weekly Running Costs per lift total Monthly Running Costs 3, Set Collection Charge Annual Running Costs 36, per lift total Bio Bags Supply Weekly Profit total Monthly Profit Collection/Bag/Recyclate Rev Annual Profit

15 SUMMARY We have created a business model which offers small businesses an economically advantageous alternative to the service provided by the larger national operators. By conducting a minimal sortation on their own premises, businesses will be able to have all recyclable materials collected on one vehicle at a fraction of their existing costs. Bioplex bring tried and tested innovative unparalleled anaerobic digestion technology. RABBITT bring extensive knowledge of the materials brokering market, sales and telemarketing support and operational expertise. RDA bring grant application expertise and are able to consider the view of the farmer.

16 any questions?