Our focus continues to be the same as last month – we are working daily on getting the Renewable Energy Approval and feedstock contract completed as they are essential to our success and we are eager to get started on building the plant. We have also been investing time and energy into learning more about the fertilizer market so that we can maximize revenues from all possible sources.
When we started this project, we had an agreement that our partner was to supply 14,000 tonnes of waste to us each year. During the fundraising phase, 4,000 tonnes of waste was contracted from corporate stores. We continue to work with our grocery partners on the contract for the remaining 10,000 tonnes. The primary issue contributing to the delay is price – not the availability of waste supply. At the current time, the commercial organic waste market is constantly evolving – making it difficult for us or our partners to comfortably forecast the value of disposing organic waste. We have now come to the conclusion that we would only be able to sign a long-term supply agreement (our goal) with Loblaws (or any other grocer/waste management company) if there was no fixed price.
We are working on a proposal that would include a formula for a flexible fee, that would fluctuate with the market each year, therefore remaining competitive. We are positive this will yield the desired outcome but are speaking to multiple waste producers and haulers to ensure we have a clear understanding of the market and some alternative options if we are forced to go that route.
Co-op Development & AGM
We hosted the 2015 ZooShare Annual General Meeting on June 11/15 at 401 Richmond St West. The meeting was well attended with 50 members there, all of whom cast votes in the Board elections. It was a good AGM with productive discussions regarding the challenges we still face. All members came at it from a place of trying to gain a deeper understanding of the issues. We elected 3 new directors to the ZooShare Board – Chris Benedetti, Peter Roles and Angela Wallace. Tom Ferencevic is returning for another 2 year term.
After conducting a member/investor survey, which closed in early June, we have been working on a report that ultimately will summarize the key learnings about our membership and the motivations of our target market, should we decide to market and sell additional bonds in the future. (Click here to read a high-level summary of our findings in this month’s Member Spotlight.)
We were also sad to say goodbye to Blair Coutu, who’s contract with ZooShare ended this month. Blair was a valuable member of our team and played a big role in closing our bond sales as he stepped up to be our Investor Relations Coordinator last September. We look forward to seeing him accomplish more great things as his career develops.
Since we began taking names and pledges for a waiting list, we have 102 individuals and total pledges of between $408,000 and $609,000. If you would like to get on our official waiting list, please fill out the form here (make sure to check the “Yes, I am already registered as a ZooShare member” box). We don’t know for sure if or when we will sell more bonds but the chances are good – stay tuned for more information on this.
Renewable Energy Approval (REA)
Our consultants and technical sub-consultants have been working to address the Ministry of the Environment and Climate Change (MOECC)’s concerns about stormwater management. The primary thing they are looking for are additional details on what features we are planning to use to manage stormwater and which guidelines the design adheres to. We had a very productive meeting with MOECC staff about their specific information needs and concerns last week. This meeting clarified what we need to submit in order to receive our REA. Our consultants will submit these items on our behalf in the next week, and we look forward to getting approval in the coming weeks. This process has taken longer than we expected, but we are confident it is nearing an end.
Digestate (fertilizer) sale/disposal
We have also been hard at work at building a business case for selling fertilizer (liquid and solid) to help us better understand if and how we can generate sufficient revenues from this activity to support the project.
We finalized the Memorandum of Understanding with Prongineer to process liquid digestate. The projected revenues from selling the fertilizer products the Prongineer equipment will produce are ~$40,000 per year for the first 6 years, increasing to ~$200,000 per year from that point forward. This equipment will essentially separate the water from the valuable nutrients in the liquid digestate and allow ZooShare to sell these without needing to transport water around (which is costly).
The recent work is all about maximizing the value we can extract from the solid digestate. Initially we had intended to sell it wholesale for ~$20 per tonne. From what we’ve learned so far, we can make much more than this by selling directly to consumers through multiple channels. We are looking into purchasing bagging equipment and how we could get “Poo from the Zoo” brand fertilizer in front of consumers (The names “Zoo Poo”, “Zoo Doo” and “Zoo Manoo” are already taken. Got a good name? Let us know!) . If we’re able to sell a bag of solid digestate for a price comparable to cow manure (~$4/bag), potential revenues from this activity could be as much as $500,000. Our initial research has told us we can sell it for a higher price than this, but we are fully investigating the costs associated with this plan and figuring out a way of pre-selling some of the first year’s output to help prove our case to lenders and ourselves. It is also possible that we further process the solid digestate into a higher value fertilizer product, which can be sold for a much higher price, but would require additional equipment. At the current time however, this is secondary to proving out the minimum potential revenues from selling bags of Zoo poo.