NEW ZEALAND TRIAL SECURES MAXSIL PRODUCTION FOR KIWI FARMERS THIS SPRING
A recent trial in New Zealand on process potatoes which was run by our licensee (Glass Technologies Ltd) caught the attention of even the most skeptical long term potato farmers over there. The crop is due for harvest in late February but a sample of the crop was lifted and compared and demonstrated yet again that MaxSil at low dose rates dramatically increases marketable yield and profit. In this instance the MaxSil treated areas of the crop are expected to yield up to 30% higher than the untreated control areas.
Glass Technologies Ltd NZ examined the research and solid intellectual property behind our MaxSil product, were quickly convinced of the efficiency and value proposal that MaxSil offers and then approached us to negotiate a licence to manufacture the product. They are eager to exploit the New Zealand Patent that Silicon Fertilisers holds, and are working at full speed to complete the build of a manufacturing plant to supply the local market prior to Spring 2015
APN managing director David Archer at his plant in Toowoomba.
QUEENSLAND PLANT COMPANY TURNS WASTE INTO WEALTH
Queensland innovator Advanced Plant Nutrition is to undertake a $13.5 million capital raising to build a full-scale commercial facility near Brisbane with an annual production capacity of 20,000 tonnes. APN has invested about $2 million over five years to commercialise a process that converts waste glass to fertiliser. It has already produced 300 to 400 tonnes of the silicon-based fertiliser MaxSil from its Toowoomba pilot plant for use in field trials.
Australian farmers spent $2.33 billion on fertiliser in 2011, according to ABARES and data analysis business Neil Clark and Associates, but it is not an easy market to break into. It is a low margin, high-volume industry dominated by a handful of big players like Incitec Pivot Fertilisers and Wesfarmers subsidiary CSBP, says Neil Clark managing director, James Finlay.
“It’s a volatile market,” he says. “You’re driving along the same road with the same bumps as farmers. Farmers have to make money to buy fertiliser. It’s also a mature market, about gaining market share rather than the size of the pie growing.”
IPF, the dominant producer and supplier in eastern Australia, has more than 300 distributors, and with revenue of $3.5 billion in 2012, has the firepower to invest heavily in research and development. Its biggest plant at Phosphate Hill has an annual capacity of 900,000 tonnes.
APN’s primary exit strategy is for a trade sale within four to eight years to a large agribusiness player. Competing long term with dominant incumbents in the saturated Australian market is not part of the business plan.
Hurdles remain before the process becomes commercially viable. APN plans to sell a 40 per cent equity stake for $13.5 million to get its Australian operations under way before it begins expansion into offshore markets.
Once the plant has been commissioned, APN will begin a $1.5 million to $2 million sales and marketing program to reach its target of $25 million in annual revenue within five years.
It is forecasting cumulative earnings before tax of $81 million over the next eight years.
APN managing director David Archer says suppliers of glass fines will pay APN to take their raw material, as they cannot recycle around 30 per cent of collected waste glass. “We would either get paid a small amount to take [waste] away or they may prefer to beneficiate that glass for us so it becomes a useful feedstock,” Archer says.
Geography is central to this plan. Colmax Glass boss Peter Harkins says deals on fines are easier in the city. Colmax processes about 100,000 tonnes of glass fines annually in the manufacture of its TecSand product, which is used in fibreglass insulation batts, glass bottles and water filtration.
“We get paid a gate fee for most of what we take but not everywhere,” Harkins says. “We certainly don’t pay for them.”
APN has secured patents in South Africa and New Zealand, and has approval in Australia and the US pending.
AFR Published 15 MAR 2013