Finding Joint Venture Partners/Buyers

Case Study Project Description

American Recycling had several business projects in development. They owned an industrial land site where they produced wood chips from secondary source lumber recovered from riverways and landing debris after logging. The need for wood chips at affordable prices was growing.

Project Problem

Several generators were moving into the market with urban wood waste chips. American needed to quickly secure their source of supply and acquire long term sales contracts to ensure the future growth of the business.

Solution

We showed them how to do a competitive analysis and build a new market niche for the company using our knowledge of the pulp and paper industry. We developed a marketing strategy on how to develop a network source of supply and get the pulp and paper mills to move quickly to sign purchase agreements for their chips.

American Recycling had an opportunity to capture a unique market niche as a flexible generator supplying a new source of original wood chips in a very high quality form. This niche is very different than those recyclers using urban wood waste. Their chips are more shredded and stringy where the original species origin is unknown. On the other side of the playing field are traditional sawmills who can supply a high quality chip but sell it in the same form from the same dwindling sources of supply.

American Recycling’s opportunity to carve out a niche was dependent on their ability to remain flexible by creating a number of different products. We developed a new strategy to promote the sale of these chips to pulp and paper mills by taking control of designing a new sales and contractual process. In order to bring this market niche into existence they needed to develop some distinct ways of doing business and differentiate themselves in all ways to the pulp and paper mill used to doing business one way with pre-set contracts.

The market opportunity for American Recycling was dependent on having a regular consistent and courteous pickup system for “unprocessed” wood that identified source organizations could rely on to come pickup their wood waste. The goal was to get both opportunities under contract.

The wood waste generator was American Recycling’s lifeline to cashflow. We performed research to understand how to secure their source of supply. These suppliers had several options for disposing of their wood. American Recycling had to learn how to cater to them so they would keep supplying their waste wood. American Recycling’s staff needed training in managing and maintaining this customer service system in order to ensure continuity and success. Each generator (supplier) had different requirements for the pickup of their wood waste. Some, such as contractors, wanted direct drop-off or a container placed right at their site. Others wanted to put it out on a certain day and be sure it was picked up regularly. Larger suppliers needed more efficient systems in order to guarantee that American Recycling could have regular access to the wood.

The company also needed good relationships with independent haulers who would be willing to cater to this customer service plan. We created a reward system for getting new sources of supply and recognition for duty beyond on the call of service. In return they received guaranteed contract work, and other perks that will maintained their loyalty. We also did a cost/benefit analysis to determine whether they should eventually have their own fleet.

Result

We re-branded the service with a name not associated with recycling, since the primary products are not recycled sources. The name had to be more memorable than “wood waste pickup” which was vital to differentiate it from Teamster controlled waste disposal services. The name also had to set them apart from urban wood waste recyclers and traditional sawmills in order to create this new market niche. All contract drivers carried the new name and logo on their trucks and uniforms. They gave out logoed hats and jackets to new suppliers.

We set up an information program that aimed to educate as well as provide a service to wood waste suppliers and developed a database of potential sources. A letter went out to all potential suppliers describing how the service worked asking for their participation with putting out materials for pickup. 40% responded. We then used a monthly reminder postcard and calendar of pick up dates. Every month, the company distributed a case study on where the wood was going.

Concurrently we also designed and implemented a chip contract marketing program to acquire demonstration sites and pilot tests. We set up industry roundtables informally at pulp and paper mills to discuss the pending problems in finding quality chips for paper making. We invited the press operators, paper makers, buyers, environmental managers and the marketing people to discuss working with this new source.

The goal was to close the session with a schedule confirmed and agreed to by all parties as to how the testing will begin and move through to identifying the definitions of a successful test and the first purchase. This strategy did yield two supply contracts after about six months of effort.

Introducing Environmentally Smart Substitutes into Established Industrial Product Markets

Case Study Project Description

Imtek was studying what new market opportunities might be available for a crushed glass blasting application. The owner had a production plant to receive, sort and crush the glass. He could produce one ton per hour and estimated that this prototype plant could produce 2000-3000 tons per year. He had spent time researching the markets where silica sand, ice, nickel slag and CO2 was used for blasting.

Project Problem

Imtek needed to find a profitable market after all the research they had done to prove that recycled crushed glass could be an environmentally-benign substitute for sand-blasting and chemical stripping. However, the markets that these materials operate in are commodity oriented and well-populated where the average price was $60 to $80 per ton. At this price, Imtek needed a production plant that was able to produce 15,000 tons of crushed glass per year. The capital investment required to fund the plant development, market penetration and labor would be quite substantial in the face of a flat market where nickel slag was an abundant, cheap alternative source. While Imtek was considering this kind of operation, we pointed out that the challenge of managing production costs in a commodity market is a fine art and even the pulp and paper mills absorb losses when raw material costs go up. Imtek could not afford that strategy. The debt load that the company would have to carry to develop this level of production would be crippling in the event the cost of getting and processing glass went up.

Solution

We suggested to him that he grow slowly with the one plant and look for markets that had yet to use blasting as a form of stripping agent because the technology or source material wasn’t fine enough to prevent surface damage. We determined that the market niche opportunity was to develop custom blends for different applications and to work with industries to help them make the transition from chemical stripping to crushed glass blasting while refining his screening process for their requirements. In this way, he could charge for his knowledge and services and capture supply contracts for the long term. We also suggested that he supply the services to recover the spent glass after use and re-generate it if possible.

We did some informal research with the aircraft maintenance industry and discovered what could be a very sizable market if Imtek was willing to work with companies in this industry to develop the right mix and provide training and support in it’s application.

Aircraft, under FAA guidelines must not fly unpainted and must be repainted every other year. Aircraft maintenance and modifying companies used a product called Porco. It is a chemical gel that is applied to the skin of the aircraft in a highly controlled environment. The aircraft hanger must be completely sealed. The people applying the gel must wear pressurized suits that are attached to compressed clean air supplies. The drainage system in the hangar must be sealed and the EPA has observers outside the hangar testing for any kind of toxic spill or release of toxic air. In the event that any mistake is made with the solvent, the company can be fined $10,000 or more per incident. This entire process is extremely expensive.

On average, one plane per day goes through this tedious paint removal process. It was so bad that some modifiers were looking at other kinds of technology such as crushed walnut shells run through a sand blasting machine, glass beads, plastic pellets and a very expensive computerized heat and pressure machine from Japan that absorbed surface paint. The walnut shells had been effective except that they could not be reused and were hard to obtain. Plastic pellets didn’t work and glass beads were expensive.

Crushed glass in a blasting machine would be highly effective from a cost and time perspective. However, the crushed glass must be able to safely clean aluminum with copper additives, titanium and magnesium. It must not affect the aluminum seals that mask off the parts of the plane that they don’t want cleaned.

We determined that the organizations that have the most to gain from testing crushed glass as an alternative were the airlines that perform their own maintenance that need to reduce their maintenance costs. The second target group was the modifiers that run the risk of EPA fines and a huge capital expense maintaining air tight hangars and pressurized suits.

We recommended they set up a testing environment with regulators observing and then video tape it. They prepared three metal surfaces covered with the same paint used in industrial and aircraft applications. Using the video camera’s built in timer to clock the process of sand blasting, crush glass blasting and chemical application they were able to prove their concept. They documented the environmental damage during and after each process.

Results

The tests were successful. We recommended they set up a new blasting system for the company under a contract for services and supply of the glass. This meant that Imtek would charge a set-up fee which would include custom blending, advice on working conditions, space set up, blasting machinery purchases, safety equipment required and training in how to handle and use the crushed glass. A purchase agreement for buying crushed glass at guaranteed rate for at least two years was to be part of this package. Imtek would do an analysis of the amount of blasting they do per week and help them determine the correct amount to order.

We suggested that the amount to charge should be based upon on hourly fee for the time it will take to do the entire setup and provide the training. The price of the crushed glass should include the processing costs for their custom blend, a margin on Imtek’s cost to acquire the glass which would provide enough room for cost increases over two years, the cost of delivery to the customer’s site, any special packaging associated with their order and the cost of recovering the spent crushed glass. At the time, no one else was providing this level of service with this material, Imtek was able to set the standard and the price without being compared to sand blasting which didn’t represent the level of knowledge and value-added service these industrial customers needed.

The name Imtek isn’t easy to remember or easy to associate with the product and service offering. We suggested rebranding to include the words consulting or services in it to ensure people viewed the company in a different light than just a glass recycler, glass crusher or other commodity oriented framework.

It was extremely important in defining and defending this new market niche to add value and service at every point of the client engagement. This meant that a quality customer service strategy from initial phone calls through to the pickup service for spent glass reflects and supports the customers’ needs. Credibility, consistency, integrity, honesty, cleanliness, flexibility and responsiveness would create customers and ensure their loyalty. Once the video tape was available, we suggested putting it on their website.

Imtek was able to find several demonstration sites and was awaiting EPA approval for use on airplanes. Today, using crushed recycled glass is standard for sand blasting and as a strong substitute for chemical peeling. Imtek pioneered this transition.

Ocean Energy in Canada: Pathways to Commercialization

Case Study Project Problem

The Ocean Research Energy Group had recently formed as a group of technology developers eager to contribute to Canada’s alternative energy effort. They had been having trouble making the case for growing this industry and receiving support from the Canadian Federal Government. Industry Canada wanted to open a dialog and provide some resources for the group in terms of education about commercialization, knowledge about funding sources and increased understanding of what the government needs to see from the group.

Solution

The Pathways to Commercialization Workshop which brought together stakeholders from industry, utilities and Industry Canada has been exploring whether there is sufficient merit to build an industry and aid the commercialization of Ocean Energy in Canada. They engaged Lorraine Rieger through the Centre for Sustainable Communities to determine where the funding might come from for commercialization, provide a status report on ocean energy research and commercialization around the world and facilitate an invitation-only forum to educate all stakeholders about the opportunities, road blocks and needed resources. The goal was to open up a collaborative dialog and determine next steps.

Building on the momentum developing in British Columbia’s Ocean Energy sector, this first ever meeting of Canada-wide stakeholders took an in-depth look at how private and public sector financing and funding programs can foster the development of these exciting technologies. Key discussions and analysis will took place examining the strategic constraints while attempting to gain various perspectives for charting the course ahead for this emerging sector.

Result

The assignment entailed researching worldwide funding sources for ocean, wave and tidal renewable energy technologies. This data was analyzed to determine the kinds of projects that were getting funded. Then the team developed a path to commercialization road map and combined the research to build a picture of the kinds of resources available at each stage of the map.

By recruiting 20 speakers from government, industry and academia around the world, we conducted a workshop to deliver this knowledge and facilitate a discussion of how developers could help themselves by working together to develop the ocean and renewable energy industry in Canada. The workshop was complemented with a searchable database to help technology developers understand which investors were funding ocean renewable energy around the world.

Industry Canada has now moved to the next step and has commissioned a study to determine the economic constraints, current value chain and opportunities available in Canada to support the development of an ocean, tidal and wave energy industry.

Introducing New Consumer Products in a Highly Competitive Market

Case Study Project Description

This company used recycled newsprint to create a number of different pet care products. They had gotten good results in the specialty pet area with their small animal (gerbils, rabbits etc.) bedding and had a large distribution network in this marketplace. There were no major competitors in this market that could provide an odor-free solution at the time.

They wanted to get their second cat litter product made from wood/pulp waste that looks and feels like clay into distribution. It could be flushed down the toilet instead of having to be thrown out with the garbage. The product lacked a positioning statement next to the clumping litters and clay litters, a brand name, and the right kind of packaging.

The third product was a ‘wonder’ towel that absorbed grease, oil, paint and water on one layer and wouldn’t leak it to the next towel. It could be used over and over again without decay or tearing. They needed to define this product’s ideal positioning, target market and distribution system and then package or market this item without a lot of expense.

Project Problem

Absorption Corp. needed to do more research into the buying habits of discounters like Wal-Mart and the Pet Care industry to provide them with some recommendations and a focus to determine if this was a worthwhile investment for their shareholders. Lorraine Rieger recommended a step by step plan that took them through the product research phase through to a product launch strategy if the primary investigative research proved that the product was viable.

Solution

At issue is whether there was room in the market for another slightly different product and what aspects of the product would have to be the most appealing for vendors to create the space, i.e. high margins and/or the latest and greatest development in cat litter. Lorraine accessed grocery store research on the topic and suggested that the company sponsor a local cat show by offering to be the supplier of the cat litter. They surveyed the attendees at the end of the show to see how their felines responded to their new litter. We set up independent testing to ensure it was truly a flushable litter.

From this research, we selected the best targets based on financial analysis and a developed a new pricing system. The products were all positioned as premium solutions that met user needs and serviced the “green” market as a better substitute for traditional litters. The towel fit many markets and separate branding identities for each were developed for automotive, consumer and industrial use. Each product gained 90 day trials in grocery and other consumer stores as well as with industrial distributors. We recommended packaging improvements for ease of handling and included the absorbent towel in the kitty litter as a pan liner.

Result

The first kitty litter product did not receive good reviews at the cat shows, technical tests and from user feedback surveys. The company re-engineered the identified problems and re-issued the products. Today the company has seven different pet litter products and five different markets for its absorbent towel product all of which achieved national distribution. They have become a significant buyer of the country’s wood waste.

Can an Alternative Energy Business be Built on a Nasty Waste Stream?

Case Study Project Description

A large private utility wanted to expand into the wastewater business and was looking for opportunities at every point in the waste stream.

Project Problem

Biosolids, or the sludge that is left after wastewater treatment processing is currently be land applied in many urban and rural areas. However there is more supply than demand despite the incredible growing properties of Biosolids. Dogged by rumors of contaminated land, environmental liability lawsuits in property transfers and feuding neighbors, this utility wanted to explore the potential of creating a business that could transform biosolids from a costly waste stream that has to be trucked many miles (creating greenhouse gases) in order to be carefully ‘disposed’ of. Was Biosolids a raw material available for free that could be harnessed for more profitable and safe uses?

Solution

We have done several biosolids as business solutions for a public and private enterprise. Our position is that sourcing and controlling a large volume of supply is an essential element to making the waste to energy solution profitable. Waste to Energy is the best solution for large volumes. Otherwise it is a commodity business at the mercy of the horticultural, golf course and agricultural markets where it is only marginally accepted after 15 years and more of evidence supporting the high crop yields Biosolids enables.

There are a few technologies available today that can convert Biosolids to energy. Our work has been to identify those technologies and develop a broad based strategy to transform this into a business solution.

Result

This project to transform Biosolids into a waste to energy solution is on going. The technology is not quite advanced enough at this time. However the opportunity is viable with the right volume of materials and the right capital structure.

Greening a New Product in an Old Line Business

Case Study Project Description

Port Townsend is a smaller paper mill that was in the process of converting to completely recycled feedstock (in order to remain competitive), to make Kraft Paper and other value added products in. Their goal was to find higher value applications for the paper they made to get out of the commodity business and to become much more environmentally responsible. They were looking for ways to find new product opportunities that would position them as the first mill to use 100% recycled content material for paper.

Project Problem

The biggest challenge was to find product applications that had secure market niches, little competition and large volume potential since paper mills make product by the ton. We suggested going to technology sources like Battelle National Labs and developing some industry discussions with potential strategic partners who could participate with Port Townsend in developing new products.

Solution

Battelle Labs has a mandate from the US Department of Energy to focus on what the pulp and paper industry should become in the future. They take two approaches to help companies like Port Townsend Paper:

Discover what products are possible given the state of certain technology and processes that they have identified in their research

Present market-driven ideas for products that they have determined will solve a problem or be in demand in the future.

In return, they want to be able to share the market information that we and Port Townsend Paper brought to the process with other clients and other Battelle research areas. Their goal was to create new products that solve current problems affecting many environmental, economic and social issues.

Battelle arranged a meeting with nine different scientists at the lab. We generated nine different product opportunities, all of which would require research funding from Port Townsend for work to be done. Many of the options were for agricultural markets. Port Townsend decided to do some research on potential market opportunities for such products before they funded any technical research

We put Port Townsend Paper in touch with another client, Global Warming Research & Development Corp. (GWR&D) to see if Kraft Paper could be used as a soil builder and moisture retention system for planting trees in the desert. Another meeting with Battelle was scheduled which included GWR&D to discuss the theory and get more information on desertification problems. The results of the meeting proved that the paper would be a good application for this use.

Results

We explored the competitive market for molded pulp packaging. We found the non-toxic adhesive products they can license for developing a new paper masking product for selling through Home Depot. Port Townsend signed an agreement with GWR&D to supply paper for their test trials of their watering technology for use in solving desertification problems. We helped them do trials on gift wrapping and molded pulp packaging. Eventually they were able to produce packaging, high end shopping bags and recycled-kraft paper and today are an environmentally sophisticated paper producer reclaiming millions of tons of paper from the waste stream.

Clean Tech Case Studies

Back in 1990 when we first started working with companies that environmental solutions that make business sense (our term), these products were called environmental technologies. Almost a generation later, Clean Tech is attracting millions in venture capital www.cleantech.com and governments are mandating their use. We have worked with more than 40 different clean tech solutions and companies over the last 18 years.

Clean Tech companies need smart efficient and fast growth strategies. Our philosophy is to get them joint venture partnerships with large companies that will gain market share by adopting a clean tech product and strategy. Here is a partial selection of the kinds of companies we helped grow. Have a clean tech company that needs more market leverage and is already revenue positive? Call us at 604-306-7707 to discuss where in the world we can help you grow to.

Clean Tech Case Studies

• Can an Alternative Energy Business be Built on a Nasty Waste Stream?
• Introducing New Consumer Products in a Highly Competitive Market
• Ocean Energy in Canada: Pathways to Commercialization
• Introducing Environmentally Smart Substitutes into Established Industrial Product Markets
• Greening a New Product in an Old Line Business
• Finding Joint Venture Partners/Buyers