Markets - Ontario Federation of Agriculture

Markets
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Greenhouse Market
Industrial and Commercial Market
Retail Heating Fuel Market
Residential Heating Market
Ontario Power Generation
Export
Wood Feedstock Supply
• Canadian Biofuel currently is using clean white
wood as a safe feedstock stream to produce
pellets. It is estimated that there is in excess of
500,000 tonnes of post consumer white wood
available on an annual basis in Ontario.
• Canadian Biofuel Inc. will to continue using this
feedstock to produce wood fuel pellets in
conjunction with the fuel crop supply chain when
it is established.
Agricultural Feedstock Supply
Energy Crop Sustainable Supply
• 100,000 ton plant requires 15,000
acres of purpose grown crops
– Switch or prairie grass
– Hybrid willow
– Miscanthus grass
– Agricultural crop residuals
Production Facility
Acquired former grain elevator site from Cargill in
Springford, Ontario adjacent to the former
tobacco growing area known as the Norfolk
Sand Plain
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20,000 square feet in 2 warehouses
Operating truck scale
7 storage silos with 10,000 ton capacity
Four elevator legs and numerous conveyors
8.3 acres
Truck access on paved road connecting to Hwy 401
and Hwy 3.
Technology
• Pellet mills from Canada and Germany
and Briquette mills from a Canadian
manufacturer in Elmira.
• Initial capacity for Phase 1 R&D line
27,000 tonnes of pellets and 12,000
tonnes of briquette production (22 jobs
over 4 shifts 24-6) expandable in Phase 2
to 54,000 tonnes (30 jobs). Phase 3
expanded to 108,000 tons of pellets(35-40
jobs)
Pellet Mills
Lawson R&D Mill
Muench Production Mill
Feedstock Truck Weighed
Feedstock Truck Delivery
Feedstock Unloading
Loading Feed Hoppers
Feed Hopper for Hammer Mill
Hammer Mill and Cyclone
Mill and Cooler Assembly
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Bulk Loading Hoppers
Bagging Plant
1000 lb. Totes in Bulk
Pellet Lab
Canadian Biofuel Pellets
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BTU ranges from 8400 to 9200 per lb.
Moisture content 5% to 6%
Ash content ranges 0.8% to 1.5%
EU ENPlus Specifications place pellet
grade from EN 1 to EN 2
• There are multiple pellet specifications
across the world
Pellet Specifications
• Finally there is a draft universal ISO
specification ready next year.
• This will rationalize a common method of
measuring pellet quality.
• Pellets manufactured from wood,
agricultural residue and energy crops
known as agro pellets will have their own
universal pellet grading specification.
Canadian Biofuel Pellets for
Export
• Bagged in 15kg. bags
• 66 bags per skid for 1 tonne
• Weather protection consists of plastic rain
cap and multiple layers of shrink wrap
• Bulk pellets are loaded into lined
containers to protect from moisture
• 500kg totes
CURRENT MARKETS
• $36 Million contract with an Italian distributor over 5
years (4000 tons per month) in lined 30 ton shipping
containers.
• Shipping 40lb. Bagged pellet truck loads to 5 Home
Hardware stores in Sauble Beach, Orangeville,
Chapleau, Hanover, Port Elgin, Cochrane.
• 9 Co-op stores in Grey-Bruce, Tim-br-Mart Listowel,
Independent in Foxboro and Bobcaygeon.
• Individual bulk sales to agricultural livestock operations
who traditionally burned corn in their boilers.
• Retail sales from Springford operation.
Container Bulk Loading Facility
Export Logistics Issues
• Plant not located on rail (CN ripped out
track 20 years ago)
• Must truck bulk pellets 15km. to Ingersoll
to bulk loading facility (adds $15 per ton)
• Volume not large enough to fill one hold in
a small ship quickly enough (Need 4000
tons load Minimum)
• Considered Container option
Export Logistics Issues
• Worked with Kuehne-Nagel international freight
forwarders on Container option.
• Started out at $95 a ton Springford to Genoa.
• Containers are pick up by truck to Toronto Rail
terminal then railed to Montreal container
terminal for loading on ship
• Over time and once we had a contract in hand
with price reduced to $79 a ton for a 5 year
contract
Export Logistics Issues
• Customer would also like bulk shipments however we
cannot produce enough pellets to justify setting it up.
• Ideal solution would be bulk shipments out of Hamilton 8
months of the year and rail to Montreal or inventorying
the other 4 months during the winter.
• Cost of transportation is impeding addition exports from
Ontario and Quebec.
• Port of Hamilton is planning the building of a bulk pellet
loading facility.
Future Export Opportunities
• The EU consumed over 13 million tonnes of fuel pellets
in the winter of 2011-2012
• By 2015 EU estimates this will increase to 20,million
tonnes and by 2020 will be over 40 million tonnes.
• Italy sold over 188,000 new pellet stoves and 20,000
new pellet boilers in 2011
• Italy only enough biomass to produce 600,000 tonnes of
pellets so it must import balance. Looking to Canada to
solve problem
• Traditional import markets from North Europe are
exporting less due to higher domestic consumption.
• Solution is to import from NA
Export Challenges
• Dealing with a soft Euro in times of
economic crisis
• Italian and international banking systems
• Home Land Security money laundering
regulations.
• Prompt payment terms/ letter of credit etc.
• Insurance/EDC an option
Export Challenges
• Communication or Language Problems
• Avoid brokers, lots out there and they just
add to the cost of doing business
• Try and make direct contact with ultimate
customer. Saves time and money.
• Use the services of the Canadian Export
Development Bank to help land contract
and provide some bridge financing and
insurance.
Export Potential
• Italy residential and industrial pellets
• UK Industrial and Utility Markets industrial
pellets
• Ireland Utilities Industrial pellets
• Poland Utilities Industrial AG Residue
Pellets
• Korea industrial pellets
Production Issues
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Currently European Markets are demanding low ash white pellets
under the false assumption that they have a higher heat value.
Some of the high tech residential stoves is Europe cannot burn any
pellet with over 2 % ash
However the trend towards industrial markets allows a more tolerant
ash content of up to 8% ash at a lower price. Current coal boilers
produce over 12% ash so biomass is not a problem.
Ag pellets by their nature can run from 2.5% ash to over 7% due to
grit and soil splatter in the field. Some recent research has been
looking at growing technics and harvesting protocol to minimize the
contaminants.
Our tests have demonstrated that these materials can be pelletized
with little difficulty in the production pellet mill.
It all comes down to costs and what the market will bare.
Potential Growth Opportunities
• Canadian Biofuel is planning a second
plant with a substantial partner for a
capacity of up to 200,000 tonnes per year
using a combination of wood and
miscanthus as feedstock.
• Potential partner has capital, infrastructure
and land, transportation links and a
captive audience of potential growers in
southern Ontario.
Briquette and Pellet Fuel
FOR MORE INFORMATION CONTACT;
Ian Moncrieff, President and CEO
Email: imoncrieff@canadianbiofuel.ca
Greg Couwenberg, Assistant Plant Manager
Email: gcouwenberg@canadianbiofuel.ca
Toll Free:
1-877-826-7155
Telephone:
(519) 544-0102
Fax:
(519) 688-5468
Website: www.canadianbiofuel.ca