Solum A/S. March 2012

Transcription

1 Solum A/S March

2 Company history Solum Gruppen A/S Aikan A/S Solum is established. Operation of green waste composting site in Sengeløse (Denmark) 1986 Nymølle (Roskilde) green waste composting site is established 1993 Mutual development project regarding dry anaerobic digestion between Aikan and the partners Aalborg Universitets Center Syddansk Universitet and Landbohøjskolen St. Hede green (Roskilde) waste composting site is established Capital injection from Maj Invest The first biogas & composting plant from Aikan, BioVækst. Made in a PPP 1 between Vestforbrænding, Kara Novoren and Aikan Vækst. First 5 modules in 2003 and 5 additional in 2005 A composting plant in Norway is established, HeraVekst. Aikan contributes with design, delivery of process tanks and steering Closure of Nymølle site and St. Hede site Own material recycling center in Roskilde is established 2010 All companies in the group become ISO certified 2011 Sale of Source Separated Municipal Solid Waste centre site in Jakarta. Filing of Aikan patent in the US Note (1): Largest Danish organics recycling and engineered soil company, processing 250,000 tons of organics a year into beneficial reuses ( PPP ) = Public Private Partnership International clean tech technology leader in high solids anaerobic digestion through a unique process 2

3 Executive Summary: Short Company profile Description Solum Gruppen A/S Solum Gruppen A/S was established in 1986 Solum Gruppen is an owner and operator of material recycling sites in Denmark for professional customers (not households) Solum Gruppen s primary business activity is to compost green garden waste into: Top soil layers for the sports sector Organic fertilizers to the agricultural sector In addition Solum Gruppen offers: Grass maintenance services Entrepreneurial services in which Solum rents high end machines to business customers Description - Aikan A/S The initial steps to the creation of Aikan A/S was made in 1999 through the mutual development project regarding dry anaerobic digestion between Aikan and the partners Aalborg Universitets Center Syddansk Universitet and Landbohøjskolen More than 8 years of experience in operating facilities in Europe Aikan s primary business activity is to provide technology know how regarding the development, construction and operation of Biogas production plants The purpose of a Biogas production plant is to transfer High solids waste into biogas, heat electricity, compost, recyclables and Residue Derived Fuel ( RDF ) 3

4 Strategic Business Unit Overview Solum A/S Product area Output Market position Production location Handling, sorting and composting of green waste Handling, sorting and crushing commercial waste Exploration and sorting of sand Compost and soil products to the sports sector Compost to the agricultural sector Biomass to the energy sector (120,000 tons a year) 25% market share Market leader in premium compost in Denmark Roskilde Kongensbro (Struer) Hostrup Solum Gruppen A/S Aikan A/S Handling and processing anaerobic digestion ( AD ) of organic waste Recyclables Biogas to energy users Compost to the agricultural sector The only dry anaerobic digestion supplier in Denmark First global supplier of two batch dry AD technology Holbæk (50% owned) 4

5 The strategic basis Solum A/S Solum Gruppen A/S Aikan A/S Core competence Knowledge regarding biological processes in the treatment of solid waste Mission Handle resources astray to add value Vision Help secure a living earth and soil Mutual board and executive management group. Shared support services (admin. & finance) Different stages in the life cycle: Solum Gruppen A/S is a mature non-cyclical business with a Danish market focus. Aikan A/S is a clean-tech company with an international market focus 5

6 Certifications and approvals Entire Solum organization was ISO certified in 2011 Public Works of Indonesia The Public Works of Indonesia has chosen Aikan as their preferred technology. This implies that all municipalities are recommended to consider Aikan when revising waste management plans Aikan was the only foreign renewable energy technology provider which was invited to present to the Department of Defense at the defense venture capitalist initiative in 2011 Central Technology Committee Aikan has received an Approval of Technology by the Central Technical Committee of Malaysia. This has only been awarded to two dry AD suppliers and is necessary to do Sales in Malaysia 6

7 The market for waste in Denmark - Historical development The relevant part of the total waste market in Denmark has been growing by 2 mill. tonne during the last 15 years, corresponding to 2% annual volume growth Development in the (relevant part) of the waste production in Denmark, tonne 1, Building and construction waste is the most important source and growth contributor 7 Note: (1) Data from Miljøstyrelsen. Total waste production was tonne in 2009

8 The market for waste in Denmark - Projections Going forward the historical 2% yearly growth in the volume of the waste market is expected to continue An increase in the value added treatment services of waste implies a higher growth in the waste treatment market in fiscal terms We have to look at waste as a resource and get as much as possible out of it. Currently Denmark only has a recycling rate of 48%. Other counties like Sweden, Austria, Germany, Holland and Belgium has a much higher rate Minister of Environment, Ida Auken Expected development in the (total) waste market in Denmark, tonne 1, Expected development in the (renewable) waste market in Denmark, tonne 1, 8 Source (1): Data from Miljøstyrelsen.

9 Key drivers in the waste market Legislation (the Bio Mass Notice) Trend towards refined sorting, renewable energy Future creation of a renewable plastic market is a potential upside Key drivers The waste market is to a large degree driven by changes in the legislation regarding taxes and incentives on waste and substituting products An example of this is the change in the Bio Mass Notice in 2010 implied the removal of the waste tax (314 DKK per tonne) on Biomass used for energy purposes in Denmark. Prior to this biomass had to be driven to e.g. Sweden at a cost. The new legislation has implied better economies of scale for large players like Solum because biomass demands less processing and shorter time than composting and less compost implies a lower risk of having to dispose of overstock at a cost. Also compost screenings can now be sold as a low quality biomass for incinerators that are short of feed stock. EU s target for the share of renewable energy in the total energy production is 30% in 2020 The political trend towards renewable energy is supported by a growing environmental awareness among consumers. Companies are adapting their production methods and marketing accordingly A potential significant boost to the current waste market would be the creation of a renewable plastic market e.g. due to: An improvement of refinery methods Higher taxes on the sourcing of new plastic Lowering of the quality requirements of renewable plastic Situation before the Bio Mass notice in 2010 Compost Engineered soils Disposed Situation after the Bio Mass notice in 2010 Compost High quality biomass Engineered soils Disposed 9

10 Solum Gruppen s production set-up Solum Gruppen s three production sites Plant overview (Roskilde site) Kongensbro: Small production in a query Production of compost based soil Roskilde Hostrup: Specialty sand take Production of compost based soil Solum Roskilde: Green waste composting Biomass Commercial waste recycling Solum Roskilde (2011 figures): Input: 80,000 tonne green waste Output: 22,000 tonne biomass 10

11 Process overview of Solum Gruppen - Illustrative mapping Revenue Cost Revenue Generators Input Activities Output Customers Municipalities Independent haulers Green waste (organic) Sorting, composting and mixing Shredding Compost & soil products Biomass Sports sector Municipalities Constructors Heating plants Industrial companies Construction companies Independent haulers Commercial waste (inorganic) Handling, sorting and crushing Biomass Crushed materials Incinerators Export Entrepreneurs (Natural resource) Sand take Exploration and sorting Sand Play grounds Golf courses Beach volleyball grounds 11

12 Process overview of Solum Gruppen - Illustrations from the sites Revenue Cost Revenue Input Activities Output Customers Green waste Sorting Mixing compost Compost Entrepreneurs Commercial waste Composting Mixing sand Soil products Sports sector Sand Crushing Biomass District central heating 12

13 Global Dry AD Market - Split by feed stock The biogas market is growing rapidly The market for Energy crops has already taken off. It is driven by high feed in tariffs and is thus regional The market for MSW (Municipal Solid Waste) and ISW (Industrial Solid Waste) has not taken off yet. The limitations are regulations and financing Development in the value of the global dry AD market 1, USD bn Most Aikan competitors have targeted energy crops, as it is the mature market Aikan was the first to target the more early stage waste market in order to build first mover advantage compared to the competitors Although the waste market is significantly smaller than the crops market it is equivalent to Aikan facilities in Source: (1) Helmuth Kaiser Consultancy

14 Global Dry AD Market - Key Drivers Landfill unwanted Renewable energy feed in tariffs are going up Recovery of recyclables and nutrients are receiving more focus Reduction of transportation Landfilling is banned in many countries: EU, BRIK, and South East Asian countries. Where Landfilling is still the preferred solution gate-fees and landfill taxes are increasing as space is limited. Many countries (like USA, UK, Thailand, Germany, Indonesia) increase incentives for renewable energy; by high feed-in tariffs, Renewable Portfolio Standards etc. The value of recyclables is being recognized. Scavengers have done this for many years. Recyclables are important revenue streams to a MBT (Mechanical Biological Treatment) project. Big landfills and incineration plants imply time consuming transportation and waiting time for vehicles. This is a cost factor which is in high focus from municipalities. 14

15 The basic activities in the Aikan Dry AD concept 1. Aikan can treat any type or organic waste 2. The waste is mixed with structural material 3. The mix is loaded into the modules 4. The percolate from the reactor tank washes through the waste and extracts feed stock to create methane in the reactor tank 5. After hydrolysis in the module, air is sucked through the module and the remaining biomass is composted. After composting the module is emptied 6. The compost can be refined of used as an organic fertilizer Further description, see next page 15

16 The biological processes in the Aikan Dry AD concept The Aikan Technology is a unique integrated dry AD and in-vessel composting ( IVC ) process which allows for the solid waste to remain untouched inside the process module during methanization and composting Raw organic waste goes in, 5 weeks later compost comes out in between, methane is extracted from the biomass Both the biogas and composting process take place in the same controlled chamber providing significant odor and environmental control Waste in the module is washed with percolate from the reactor tank Nutrient rich percolate produces biogas in the reactor tank After the methane production air is sucked through the biomass for composting and sanitization. Air cleaned in the biofilter 16

17 The mass and energy balance in the Aikan Dry AD concept Energy consumption The Aikan System consumes relatively little energy to produce renewable energy and compost around 50% of the main competitors. Input waste structure 1000 kg Biowaste 200 kg Woody Structure 10 kwh electricity 10 kwh heat Aikan features for pr ton of Biowaste in a Scandinavian climate 400 kg Compost 50 kg of waste 200 kwh electricity 200 kwh heat 20 kwh diesel Compost yield Energy yield 17

18 The input-output processes in Aikan Revenue Cost Revenue Generators Input Process Output Customers Food packaging/ processing plants Grocery stores Hospitals Hotels, clubs and resorts Final sorting Metal Plastic Glass RDF Industrial recyclers Industrial energy consumers Restaurants Universities Landfill (cost) Landfill operators Organic waste Shredding & presor -ting Mixing & loading Anaerobic digestion Biogas Electricity Heat The grid (Energy providers) Industrial off takers (energy providers) Agricultural sector Composting Compost Screening 18

19 The Aikan Dry AD concept - Value proposition o Proven o Price competitive o Unique Design o Robust o Scalable o Flexible Aikan s Value proposition to the customers o Methane Rich, Clean Biogas o Efficient Footprint o Odor Control o Zero Waste Process 8+ years in operation Negotiations have shown that Aikan is price competitive Proprietary 3-step integrated HSAD and in-vessel compost technology Designed to manage wide range of feed stocks and contamination levels Modular design efficient future expansion Can be modified to maximize financial performance based on local conditions 70% methane; no need to clean or condition Significant processing capacity on 5 acres Nearly a decade of proven odor control Recycling of inorganic contamination Fully closed loop system no waste water Aikan has established a reputation for being one of the few who can make it (AD) work continuously stable, and the Aikan technology seems to have a few features which are unique and valuable in some settings Quartz, Management consultants 19

20 Aikan sites and tender offers - Aikan s reference facility (Bio Vækst) For over 8 years, the Aikan Technology has been fully implemented and deployed at the Bio Vækst facility Location Business Model Focus Historical development Ownership Annual Organic Processing Volume Gislinge, Denmark (close to Holbæk approx. 40 miles from CPH) Public Private Partnership Maximize throughput (volume) and tip fee opportunity Aikan has operational responsibility (and ownership) 2003: Construction and commissioning 2005: Build-out. Adding 5 additional modules 2005: Started gas recovery 2010: Installed own engine 2010: Converted 2 of original 5 modules to full scale test modules Solum A/S: 50% Vestforbrænding: 33% KARA/Noveren: 17% 28.4k tonne Feedstock sourced from 8 to 10 municipalities Key financial numbers IRR close to 30% 20