Professional Documents
Culture Documents
3400
AS/NZS ISO 9001
& ASSOCIATES
FINAL REPORT
PRE-FEASIBILITY STUDY FOR THE
ESTABLISHMENT OF A
RECYCLING PLANT
PETEMIC TECHNOLOGY PTY LTD
1
"PETEMIC TECHNOLOGY PTY LTD "
PREFACE
This Pre-feasibility Study Final Report sets out, inter alia, an assessment of
the proposed establishment of a recycling plant ("the Project") to be carried
out in the vicinity of Caboolture Shire, south-east Queensland, under the
auspices of Petemic Technology Pty Ltd ("the Company"2) - an
organisation incorporated in the State of Queensland.
Corporate member: Australian Institute of Agricultural Science Registered Valuer Member: Australian Association of
Agricultural Consultants
- AGRIBUSINESS & MANAGEMENT CONSULTANTS & VALUERS -
PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT
PRE-FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A RECYCLING PLANT Page 2
Section TABLE OF CONTENTS
TABLE OF CONTENTS
PREFACE............................................................................................................................1
TERMS OF REFERENCE................................................................................. 18
Introduction to Consultancy Requirements ............................................................ 18
Study Objectives .................................................................................................... 18
CONSULTANTS RESPONSE TO THE T.O.R. & GENERAL PROJECT
OVERVIEW ............................................................................................. 20
Introduction............................................................................................................. 20
FURTHER BACKGROUND & FEASIBILITY STUDY CONSIDERATIONS ...... 21
PROPOSED ACTIVITIES ................................................................................. 22
Required Evaluation (Brief) .................................................................................... 22
PURPOSE OF CONSULTANCY....................................................................... 23
OBJECTIVES ................................................................................................... 23
PROJECT SUMMARY........................................................................................................25
STRENGTHS .................................................................................................... 26
WEAKNESSES................................................................................................. 26
OPPORTUNITIES............................................................................................. 27
THREATS ......................................................................................................... 27
STRENGTHS .................................................................................................... 29
WEAKNESSES................................................................................................. 30
OPPORTUNITIES............................................................................................. 31
THREATS ......................................................................................................... 32
MARKET PROSPECTS FOR THE PETEMIC SOLID WASTE RECOVERY PROCESS ...............38
CAPACITY ........................................................................................................ 98
WASTE RECEIVING AREA.............................................................................. 98
INTRODUCTION............................................................................................. 101
OVERVIEW..................................................................................................... 101
GUIDELINES BACKGROUND ....................................................................... 103
Air and Emission Quality ...................................................................................... 103
Water Quality ....................................................................................................... 104
Guidelines for Noise ............................................................................................. 104
REFERENCES (Environmental Issues)........................................................ 105
Schedules to Environmental Guidelines & Issues ..................................... 107
INTRODUCTION............................................................................................. 119
Status of Development Work ............................................................................... 119
TIMING ........................................................................................................... 120
SUPPORTING DATA FOR ESTABLISHING COMMERCIAL VIABILITY
(FINANCIAL PROJECTIONS AND ASSUMPTIONS) ............................ 121
FINANCIAL PLANNING & ANALYSIS ........................................................... 122
Objectives............................................................................................................. 122
Commercial Viability - Overview of Results.......................................................... 122
Sales Estimates - Major Assumptions ................................................................. 123
Notes on Primary Operating Costs ...................................................................... 124
Capital Investment Requirements ........................................................................ 125
Equity & Debt Ratio .............................................................................................. 126
Profit & Loss / Cash Flow Statements.................................................................. 126
Balance Sheet Analysis........................................................................................ 126
Break Even Analysis ............................................................................................ 126
SENSITIVITY ANALYSIS................................................................................ 126
TRADE TARIFFS, CUSTOMS & EXCISE....................................................... 134
Tariffs Applying to Building Aggregate ................................................................. 134
Customs & Excise ................................................................................................ 135
PATENTS, COPYRIGHT AND INDUSTRIAL DESIGNS................................. 135
TRADE MARK REGISTRATION..................................................................... 136
ASSISTANCE MEASURES FOR MANUAFCTURING, EXPORTING &
RESEARCH & DEVELOPMENT APPLICABLE TO THE PROJECT..... 137
The Industry Research & Development Board..................................................... 137
Department of Trade Industry & Regional Development (DITRD - formerly
DITAC) ....................................................................................................... 138
Federal Department of Industry, Science & Technology...................................... 139
TAXATION IMPLICATIONS FOR RESEARCH & DEVELOPMENT ............... 140
SALE OF THE NEUTRALYSIS WASTE PROCESSING PLANT .................... 142
APPENDICES..................................................................................................................147
ATTACHMENTS...............................................................................................................169
MARKET ANALYSIS
The study confirms that massive quantities of waste would be available to the
Project. However, it should be noted that whilst the study concentrates on
Eastern Australian Metropolitan areas, some data for the USA is also included.
At this stage, the Consultants have little information on costs for the Petemic
process4, but the basic product (aggregate pellets) should have a ready market
at prices competitive with quarried materials. The price of such competitive
materials will be very site specific.
The most attractive location for a Petemic type plant will be just inside the fringe
of large metropolitan areas where:
Landfill sites will be scarce and dumping will be under pressure from urban
residents.
Waste disposal costs (including landfill lining and waste handling including
compaction and transport) will be high.
There will be a local demand for the product particularly added value
variants such as bricks and tiles.
Discussions held with Company management assume that the following premises
are to be used in regard to broad detail on expected plant size, capital cost and
per tonne operating cost:
3. Costs per tonne for refuse disposal: $40 to $45 per tonne
4 However, management advise that indicative costs would be in the order of $40.00 per tonne
5 During the early stages of the pre-feasibility study, this amount was revised to $20m to $50m
Moreover the Petemic process has the potential to utilise a greater proportion of
the waste handled in municipal disposal than simply hard-fill waste amenable to
crushing and screening.
This analysis suggests that the break even point for the basic Petemic process
might be about $50 per tonne of refuse input. This might be allocated as to $40
per tonne in landfill utilisation cost avoided, and $10 per tonne in base product
value (on site).
The available data suggests that sufficient waste is available in the main
metropolitan and urban areas to provide a consistent supply of input raw
material, and that a regular demand for the basic output would be available at a
price that would be competitive with quarried materials.
The indicative Petemic plant capacity to treat all the present Shire refuse would
be about 280 tonnes per day (assuming a 5 day week), expanding to about 600
tonnes per day by the year 2006. We are advised that the optimum sized plant
for the Petemic technology is about 500 tonne per day with an indicated capital
cost6 of $20 to $25 million7.
Importantly, it can therefore be concluded that the physical input and output
parameters for an optimum sized Petemic plant in the Shire of Caboolture would
not be mismatched with the supply of refuse, and the expected Shire demand for
aggregate. For example, the output from the Petemic facility would provide less
than 10% of the expected demand for sand and aggregate in the Shire.
Recommendation
In view of the above findings, the Consultant recommended that the Project now
proceed to the next phase of the Project, i.e. Production, examination of
environmental issues, and site assessment.
The key production issues as required under the Study objectives (assessment and
quantification of availability of raw materials necessary to produce the
aggregate) has been covered in the previous section of this Report.
6 As noted previously, during the early stages of the pre-feasibility study, this amount was revised to
$20m to $50m
7 It should be noted that similar characteristics to the Shire of Caboolture are also present in adjoining
Shires, particularly Pine Rivers and Redcliffe, and it is possible that a strategically located facility
could also attract refuse from those Shires.
In relation to labour skills, Key Management will consist of three personnel (plus
professional support services) in the General Manager, Administration Manager,
and Production Manager.
All three positions are critical to the effectiveness of the Project, with quite distinct
responsibilities.
The General Manager is responsible to the Petemic Board of Directors, and will
not only implement policy and be responsible for the ultimate performance of
the Company, but will also play a large part in the marketing of the Company
and its products.
The Production Manager is totally responsible for the production and processing
operations, in addition to being the designated Quality Control Officer. This
position also carries the ultimate responsibility for the production of the Petemic
end-product to the specifications and standards established as Company policy.
The Production Managers other critical area of responsibility is the day to day
management of most Company staff. It can be expected that this person will
have a key role in the hiring and firing of production and processing personnel.
Because of the possibility of key management being absent from the premises for
extended periods, management will need to carefully consider the development
of succession planning. Various programs, such as ATFIC (Assistance to Firms
Implementing Change) may be suitable for assisting the Company in achieving
such objectives, along with the possibilities of striking an Enterprise Bargaining
agreement with all staff.
In the short to medium term, the Consultant recommends that the existing Board
should look for at least two other, independent, non-executive Board members
with expertise in the areas of:
Financial Management
Engineering Technology (preferably with specific skills in the area of waste
management)
1) Industrial Chemist (required for the formal testing of product quality and
composition. Some stress-testing of product may also be required to meet
the potential requirements of local Councils and other clients of Petemic
The following services will need to be retailed for the provision of various sub-
contracted services:
Maintenance Crew
The maintenance crew (comprising skill areas of fitter, turner, and boilermaker)
will be charged with the responsibility of maintaining the Petemic plant. A
reduced requirement is indicated in the early stages of plant operation.
Security Guard
The Security Guard will be charged with the responsibility of ensuring the entry of
only those persons authorised to do so, or otherwise legally required, outside of
Plant operation. A secondary role will be the securing of the Companys assets. A
reduced requirement would be indicated should the Company proceed to two
shifts, with a nil requirement where three shifts are in operation.
The Electrical and Engineering Contractor will be charged with the responsibility
of maintaining the electronics and controls relating to the Petemic Plant. The
Maintenance Crew will be directed by the Production Manager, but with the
input from the Engineering Consultant engaged by Petemic.
General Manager
Administration Manager
Production Manager
Administration
Secretary
Administration Assistant
Suggested Position Results (Job) Descriptions for all personnel are appended to
this Report, together with an audit of skills.
Finally, management must recognise the need for proceeding with the
implementation of a formal Quality Assurance program9. This will be sufficient to
meet the expectations and demand of clients (both domestic, and potentially
international clients), and the industry in general. Local Councils are becoming
more insistent that service providers (and Petemic is potentially one of these) be
Quality Assured. Progression to TQM is an option further on, however will capitalise
and strengthen a formal commitment to QA principles.
Site Assessment
An indicative location for such a pilot plant is the Shire of Caboolture. There are
several prospective sites in the Caboolture Shire that may be suitable candidates
for the setting up of a pilot plant. The preferred site selected is the Narangba
Industrial Estate, based on the following factors:
9 The Company should proceed to full implementation a formal program of Quality Assurance, in line
with a Quality System fulfilling the requirements of Australian Standards AS3901 or AS3902 as may be
applicable - the AS3900 Series Standards required by the Clever Country Policy of the Federal
Government and the State Government Purchasing Policy 1991.
Excellent road access for heavy vehicles. Easy access to the Bruce
Highway.
Viewing from major arterial roads or highways is highly restricted. This will
assist in minimising, or eliminating, any visual intrusiveness.
Environmental Issues
The compliance requirements are presently in a state of flux, as new and uniform
guidelines are developed for all Australian States following the passage of the
National Environmental Protection Council Act 1994 (Commonwealth), and the
complementary legislation; the National Environmental Council (Queensland)
Act 1994. In some instances new standards are in force and replace former
10 Regulations set out parameters for installation and control and release of controlled substances
11 Conditions for licensing are set out, including monitoring of operations. An Environmental
Management Program will be required.
12 National Guidelines for air quality and control of emissions follow standards adopted by ANZECC &
NH & MRC (1985)
13 Australian Water Quality Guidelines for fresh and marine waters (ANZECC). Sampling follows water
quality sampling manual. (2nd Ed. 1995)
14 In general the acceptable limit will be 8-10 dB above the background noise level.
For the Petemic process, an EIS (Environmental Impact Statement) will almost
certainly be required containing very specific data. An environment
management plan will also be required.
Licensing will be dependent on satisfying both the Council and the State
Government. In practice the administration and enforcement of the Act is
devolved to Local Government, but the Consultants believe that the Caboolture
Council is reluctant to specify any clear guidelines in advance of a detailed plan.
COMMERCIAL VIABILITY
The Financial Projections contained in this Report demonstrate that the Project is
marginally viable, with a Year-In-Year-Out Net Profit After Tax of approximately
$0.5m.
The primary base assumptions used in calculating this amount are that of 503
tonnes of Municipal Solid Waste (MSW) Garbage is received daily at a price
$40.00 per tonne, with an output of 500 cubic metres of aggregate (350 tonnes)15
sold at $14.00 per tonne.
The above primary assumptions are critical in the calculation of net profit, i.e. the
Project is very sensitive to changes in MSW Garbage or Aggregate receipts / sale
prices. For example, the level of Net Profit After tax approximately doubles where
the price received for MSW Garbage is $45.00 per tonne.
The capital required to fund the Project is $20m, with the base model assuming
that 80% ($16m) is derived from investors, and the balance ($4m) obtained
through debt funding. This will support capital works in the order of $18m, and a
further $2m working capital.
The Break-Even point16 is reached where the amount received for MSW
Garbage is $34.60 per tonne (assuming 100% equity / investor) funding.
The Project will take approximately four years (from the commencement of the
commercialisation stage) to achieve annual profitability, although this could be
STAGE 1 - CONCEPTUAL
At this initial stage the basic process parameters and testing requirements should
be defined. Any restraints imposed by potential problems such as patent
infringement should be built in to the project.
The pilot stage is used to validate the process, assess continuous operation,
provide the basis for scale-up to the semi-commercial or commercial design,
produce sufficient product for large scale testing and trials, develop quality
control procedures for the inputs, outputs and process, and enable
development of confidence amongst plant designers and equipment suppliers
so that a process guarantee can be obtained for the plant performance. (During
this stage a generic engineering design is often carried out to assist in market
development and to define capital costs more closely).
STAGE 4 - SEMI-COMMERCIAL/COMMERCIAL
This stage is usually a scale up from the Pilot Scale Stage and follows the
completion of a major feasibility study which would include a detailed
engineering study. Usually fine tuning and development of the process would be
expected to continue at this stage, leading to a modified and improved design
for the second plant.
The estimated duration of the above stages is within the following ranges:
Stage 1 6 - 9 months
Stage 2 12-18 months
Stage 3 24-30 months
Stage 4 24-36 months
Recommendation
In view of the above findings, the Consultant recommended that the Project now
proceed to the next and final phase of the Project, i.e. Liscencing & Final
Reviews.
The need to protect the Petemic Technology through a carefully negotiated and
properly drafted license agreement is emphasised.
Methods for formulating a commercially viable royalty rate and a brief analysis of
Petemics potential areas of exposure is provided in the Collier, Shannon, Rill &
Scott Report17, together with an analysis of the potential advantages and
disadvantages of licensing the Petemic Technology18
17 Refer Attachment 16
18 This is particularly as compared with the pros and cons of Petemic establishing a recycling facility,
either on its own, or as part of a joint venture.
Recommendation
INSTRUCTIONS/TERMS OF REFERENCE
TERMS OF REFERENCE
The terms of reference for this Consultancy results from discussions held with
Company name principals, and liaison with DBIRD's Sunshine Coast Regional
Office staff (Ms Del Woodcock), and as contained in the Consultant's proposal
dated 23 January 1994 and agreement dated 9 September 1994.
Petemic Technology Pty Ltd is considering undertaking a Feasibility Study into the
Commercial viability of establishing a recycling plant to produce aggregate and
the potential for licensing the technology / product nationally and
internationally.
Study Objectives
Stage (i) Identify domestic and international market possibilities for the
aggregate produced from the recycling process.
Stage (iv) Assess the potential for licensing the technology and product
domestically and internationally.
Market Assessment
Raw Materials
Labour Skills
Assess specific labour skills necessary (if any) for the Production of the
aggregate.
Commercial Viability
Provide an estimate of running costs for a three year period based upon
the markets identified in Stage (I).
Licensing
The above formal Terms of Reference (TOR) for the Consultancy have been
further discussed with the Project's proponents. The activity list and processes
described below build upon the original TOR, and are a result of joint discussions
held with Company Management (Mr Michael Walsh), DBIRD (Ms Del
Woodcock), other interested parties present at meeting 23 September 1994, and
further liaison with the technical consultants and ensuing discussions between all
parties.
Introduction
the need to establish and quantify sources of material for establishing the
enterprise;
the need to assess the market demand for final aggregate product as a
prelude to financial planning;
the need to examine the best ways to protect the technology by way of
licensing or other means;
the need, not only to identify capital funding and other financial
requirements, but to establish management and all other resources
required for the Project to succeed to Pilot Plant stage.
This Consultancy Assignment has been designed to address these, and other
issues.
In this way the consultancy assignment can be designed to examine firstly the
market and its constraints, and secondly (and most importantly), financial viability
taking account of environmental, labour, plant, equipment, and other related
issues. Having examined the first set of issues, the project is proposed to reach a
major "GO/NO GO" stage, at which point if viability is demonstrated, the
assignment could proceed to assisting the company with addressing the second
set of issues, i.e. establishing viability to the point where investor support can be
anticipated. That is to say, the Company will be in a position of achieving a
commercial outcome.
Strategic Direction
Petemic Technology intend to set in place a strategic direction which will involve
them in the recycling industry.
General Comments
In addition to factors mentioned above, there are a number of reasons why the
establishment of a technologically advanced recycling plant in Australia is prima
facie, a commercial proposition. These could include:
In addition to proving the financial soundness of the Project, and the need to
protect its technology, the challenge for Petemic Technology is probably one
primarily of its ability to promote sales of recycled aggregate product. Whilst
there is little evidence (other than anecdotal) supporting the Company's ability or
effectiveness in this regard, the Consultants have numerous contacts in the
political, bureaucratic and financial sectors which, at the direction of Company
management, may be the subject of further action as the Project progresses.
PROPOSED ACTIVITIES
Required Evaluation (Brief)
Market Analysis - Market demand for the aggregate produced (current and
future), both domestic and international - Country x Country.
Recommendations
PURPOSE OF CONSULTANCY
The proposed consultancy is designed to cover the major elements of markets,
management, structure, supply, technology protection, and funding. This is
fundamental in the evaluation process in order to establish the viability of a
recycling plant which is capable of producing aggregate which attracts an
adequate market demand.
OBJECTIVES
In line with the Terms of Reference, the primary objectives of the Consultancy are
to:
In overall terms, to ensure the key issues associated with the development
of a waste recycling plant are addressed. As mentioned previously, it is
believed that our approach is simple and robust.
Provide a detailed marketing plan which defines the current and future
prospects for the domestic and international markets, and establishes the
availability of raw materials necessary to produce the aggregate.
Prepare cash flow / profit and loss projections for the full planning period
(three year cash flow analysis) specifying likely returns and expenditures,
complete with sensitivity and break even analysis. The projections will
provide a basis for developing organisational performance measures, and
provide detail as to capital expenditure and working capital requirements.
Assuming to this point that the proposed venture offers good prospects for
viability and success ...
PROJECT SUMMARY
The following information was provided by the Consultants for the purpose of
providing a brief Project description for public circulation as may be required
throughout the duration of the assignment.
The disposal of domestic waste has become an increasing world-wide problem. It will be
essential to develop new systems for processing and reusing much of the waste that would
otherwise be disposed of by expensive and environmentally hazardous landfill.
Petemic has lodged a patent application for a recycling process that treats domestic garbage,
and solid building and demolition waste; to produce a commercially usable building material.
The development phase of this technology is being supported by a grant from the Queensland
Department of Business, Industry, and Regional Development (DBIRD).
The Petemic process involves reduction of selected waste to a mass of finely divided particles
of predetermined character; and compacting and processing the material to produce a relatively
dense particulate product suitable for use as a building material, road base or moulding material
for the production of bricks and tiles.
The plastic intermediate material can be extruded into pipes, bricks or tiles that can be dried or
baked into a range of attractive building products.
Smaller pellets can also be produced that can be incorporated into other rigid structural
materials such as concrete.
The process is being developed to service areas of expanding population where the composition
of the urban waste contains both household refuse and building scrap.
The processing plant will be sited close to existing landfill installations and will significantly
increase the useful life of each site.
The process has been designed to meet all current environmental standards.
Mr Michael Walsh
PETEMIC TECHNOLOGY PTY. LTD.
A.C.N. 064 320 314
S.W.O.T. ANALYSIS #1
Workshop held by the client in conjunction with Ms Helen Gibson has resulted in
the identification of the Company's perceived "Strengths, Weaknesses,
Opportunities and Threats" (SWOT) as follows:
STRENGTHS
Expanding road construction programs
Reduce the need to provide recycling and landfill sites, with the resultant
reduction in costs to Local Authorities and the consumers.
No wastage of water due to in built recycling and reuse within the plant.
WEAKNESSES
Failure of the Neutralysis program.
Prolonged period of wet weather and the impact of same on the supply of
raw materials.
OPPORTUNITIES
Reduction of environmental problems with the reduced need for waste
disposal sites, landfill, sites etc.
Potential for export of technology and the final products both interstate
and overseas.
The use of this technology will extend the life of natural resources with
which its products may be substituted.
THREATS
Objection by waste management companies presently operating landfill
programs for local authorities.
Government (all three levels) support not forthcoming for the project.
2. Business Objectives
S.W.O.T. ANALYSIS #2
A further workshop held was led by the Consultant on 25 March, 1995, resulted in
the identification re-definition and amendment of the Company's perceived
"Strengths, Weaknesses, Opportunities and Threats" (SWOT) as follows:
STRENGTHS
1. Reduce the need to provide recycling and land fill sites
Employment Opportunities
WEAKNESSES
3. Confidentiality of Project
Lack of some inputs for some sites e.g. building rubble in non-urban areas
OPPORTUNITIES
Export of above.
Possibility for availability of vast raw material supply resulting from natural or
other disaster(s).
THREATS
STRATEGIC OBJECTIVES
A result of the Company having conducted a SWOT analysis process, the
following Strategic Objectives have been developed:
1. To promote the Petemic process as a means of reducing the need for land
fill sites in compliance with State/Federal Government objectives and
environmental planning legislation.
Site identification
Use of collected non-toxic, non-radioactive refuse
Participation in Project and use of local resources
Existing waste management contract obligations
intellectual property
technology licenses
end-product(s) - aggregate etc.
construction contracts
etc.
10. To promote the Petemic process as a means of extending the life of existing
and potential extractive resources, including sand, hardrock, and
aggregate.
MISSION STATEMENT
The following Mission Statement has been adopted20:
Appendix D provides full details of the Strategic Management Action Plan, which
is summarised below. It provides, inter-alia, the following information:
3. Action Scheduled Start (when the Action should, or is due to, commence).
20 The Mission Statement has been designed for incorporation on marketing material, and other
publicly distributed information
* SITE IDENTIFICATION
* USE OF COLLECTED NON-TOXIC, NON-RADIOACTIVE WASTE
* PARTICIPATION IN PROJECT AND USE OF LOCAL RESOURCES
* EXISTING WASTE MANAGEMENT OBLIGATIONS
5. Discuss the impacts of the Petemic Process with Council, especially with
regard to waste reduction, utilisation of Council resources, possible
aggregate sources, etc.
10. Commence testing of various waste inputs to prove the Petemic process
11. Commence testing of variable volumes of various waste inputs to prove the
Petemic process
14. Determine scientific test requirements for Petemic products and processes
17. Obtain Sign-off for all external discussions (with third parties) with Petemic
management and lead Consultant prior to progressing
19. Ensure the distinctiveness of the Petemic Process is included in all major
documentation, especially that provided for public release
* INTELLECTUAL PROPERTY;
* TECHNOLOGY LICENSES;
* END PRODUCT(S) - AGGREGATE, ETC.;
* CONSTRUCTION CONTRACTS; * ETC.
21. Feasibility Study (and Financial viability of the Petemic Process) completed
23. Ensure the Feasibility Study for the Petemic Process includes information on
potential end products, other than aggregate, e.g. intellectual property,
contracts for constructing other plants, etc.
24. Ensure the Project Summary Document outlines the potential for extending
the life of extractive resources
Moreover, the Consultants have been requested not to approach or discuss the
marketing of the product with the major potential competitors who are also the
major users of aggregate materials. Discussions have been held with the
Caboolture Shire Council, who would be a major potential customer.
In the absence of any information at all on the product, its specification or price,
a survey of potential customers would not prove to be a useful exercise, and may
even be counterproductive to the project.
The only proof that will ever exist in relation to the Petemic process will be survival
in the marketplace.
As to the surveys and product demand, a very extensive literature search has
been conducted of local and overseas material to provide background material
to assist Petemic in their planning.
The Consultants point out that additional work (other than that undertaken) will
be of no benefit in the absence of better information on the process, and until a
product with defined specifications is available for presentation to the market.
In Australia and the USA, about one tonne of waste is produced per person every
year. In Europe, per capita waste production is somewhat lower, often only
about half the Australian level, but population density is higher, and disposal
problems more severe.
Although recycling technology has been developed for the more valuable
components of domestic and industrial waste, the cost of recovery and
processing for the lower value components has invariably exceeded the
commercial value of these materials.
EPA now projects that the per capita generation rate will decrease by the year
2000 to 4.3 pounds per person per day. These projections are based in part on
source reduction efforts, especially actions to divert yard trimmings from the solid
waste management system through backyard composting and leaving grass
clippings on lawns. States that include more than half of the U.S. population
already have regulations leading to these actions. Other source reduction
activities, e.g., reduced packaging, are also contributing to this decrease.
Between 1990 and 1993, recovery of materials for recycling and composting
increased from 38 million tons to 45 million tons, an increase of 18 percent.
Recovery of paper and paperboard accounted for over half of this increased
tonnage. Yard trimmings for composting contributed the next largest increase in
tonnage recovered.
Recent evaluations in Australia confirm that the quantities are of similar or greater
magnitude. In Sydney alone, up to 3.4 million tonnes of solid waste has been
produced each year23, and until recently, the quantity has been increasing at a
rate faster than population growth.
21 Environmental Protection Agency. USA (1994), "Characterisation of Municipal Solid Waste in the
United States. Executive Summary" EPA Publication No EPA530-S-94-042
22 Environmental Protection Agency. USA (1994), "Characterisation of Municipal Solid Waste in the
United States. Executive Summary" EPA Publication No EPA530-S-94-042
23 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
A goal for Australia has now been established under the National Strategy for
Ecologically Sustainable Development, to significantly reduce landfill disposal of
waste.
The New South Wales Government plans to reduce by half the amount of solid
waste directed to landfill by the year 2000. NSW believes that this goal can be
achieved by a mix of waste avoidance, recycling, and resource recovery
initiatives. The Government also anticipates that the average increase in the
cost of waste management will be about 5% per year between now and the
year 200024.
The ACT legislature has also adopted a target of reducing landfill by 50% by the
year 200027.
The following summary graph, and following table shows the solid waste diversion
objectives for some specific locations.
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
24 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
25 Victorian Government (1994), "The Resource and Recovery Council; Grant Programs 1993-94.
"Reported at the Local Government Conference - Waste.
26 Skinner, J.H. (1975), "Demonstration of Systems for the Recovery of Materials and from Solid Wastes"
Resource Recovery and Utilisation, ASTM STP 592, American Society for Testing and Materials. 53-63
27 Graham, R.A., Sharpley, G.E., & Thorpe, J.L. (1994), "Environmental Audits and Management Planning
for Canberra's Landfills" in Achievements and Challenges; Proceedings of the 2nd National Hazardous
& Solid Waste Convention, Melbourne, Australian Water & Wastewater Association and Waste
Management Association of Australia; Artarmon NSW. 149-156.
28 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
100%
2030
Sourc e: Sinc la ir Knight, Wa ste Ma na gem ent Stra tegic Pla n for Ca b oolture Shire
80%
2000 (varies)
Objective
60% 2000
2000 2000 2000
2000
0%
Great Britain Switzerland (Zurich) Ontario Canada United States
Switzerland Germany (Hanover) Denmark Netherlands Toronto (metro)
Jurisdiction
29 Source: Sinclair Knight, Waste Management Strategic Plan for Caboolture Shire
30 Queensland Department of Environment and Heritage (1994), "Draft Waste Management Strategy for
Queensland"
3. Pricing Equity which seeks to allocate waste disposal costs, so that those
benefiting from activities which lead to waste generation will be expected
to pay all the costs associated with disposal of the wastes.
The adoption of "user pays" principles in refuse disposal is also NSW Government
policy, and appropriate charges are to be progressively introduced following
updating of the Local Government Act in 1993.
It is now clear that State and Federal Government environmental and pricing
policies can be expected to cause a steep rise in the cost of conventional waste
disposal practices including landfill. Although specific details have not been
collected for overseas countries, it is likely that similar policies and outcomes will
apply in most of the developed countries.
The initial step in the Petemic strategy will be to test the cost/benefit of the
Company's technology for solid waste recovery using a commercial scale plant,
located in the Shire of Caboolture.
The Petemic plant will use domestic garbage and builders rubble to produce a
mass of finely divided particles of predetermined character. This feedstock will
then be compacted and processed to produce a relatively dense particulate
product suitable for use as a building material, road base, or as a moulding
material for the production of bricks and tiles. One particular advantage of the
Petemic strategy is that the product will have a range of local uses, and will not
require extended transport to it's market.
BACKGROUND
A number of studies have been carried out on Australian solid waste, and how it
might be recycled to avoid landfill disposal. Work by van den Broek and Hutton
(1992) set out the nature of the Sydney solid waste stream and presented an
analysis of the materials that could be most readily diverted from landfill into
beneficial use. This work provided for the first time in NSW a theoretical basis for
development of a plan to achieve the Government's ambitious waste diversion
target. In parallel to this work, Cook (1992) examined waste disposal pricing as a
means to effect better waste management, including both economic incentives
and disincentives31.
31 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
solid wastes, into an inert lightweight building aggregate suitable for the
production of structural concrete, masonry blocks, and other building products.
A nominal 25 tonne per day pilot plant was built in Brisbane to provide
information for the development of a commercial scale facility. At that time, the
capital cost of a commercial scale Neutralysis plant was estimated to be up to
$A100 million with an annual operating cost of about $A8 million. The developers
of the process estimated that revenues derived from waste disposal gate
charges, the sale of aggregate, and power generation from surplus heat, would
more than offset capital service charges and operating costs for the process32.
However, the pilot plant did not achieve the cost/benefit targets set by the
Brisbane City Council, and further development did not proceed at that time33.
The Neutralysis project appears to have come before it's time. Perhaps the
capital and operating costs were too high to encourage commercial investment.
Moreover, public attention to environmental issues was less intense in the 1980's
than it is today. Although refuse disposal costs in Queensland were rising at that
time, landfill was ultimately chosen as the cheapest and most appropriate option
by the Brisbane City Council.
In 1990 a total of 3.4 million tonnes of solid waste was reported as having been
generated in the Sydney metropolitan area. Since 1990 there has been a
reduction in the quantities of waste recorded as received at disposal sites, to
about 2.8 million tonnes per year. This reduction has been attributed to NSW
Government waste minimisation initiatives introduced over recent years,
including recycling and other resource recovery initiatives. The construction of
the new runway at Sydney airport also provided a destination for a large
proportion of the available solid fill and builders rubble. The effects of the
32 Stone, P. Neutralysis - A Use for Municipal Waste Proceedings of the International Conference of
Solid and Hazardous Waste Management (Enviroworld), Singapore, June 1991.
33 The Consultant has advised the Project proponents that the Neutralysis plant and equipment was
shortly coming up for auction. As at date of writing, the Auction did not proceed, and the
Consultants understand that the whole of the Neutralysis Plant was sold privately to an overseas
interest.
34 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
recession may have also influenced the growth rate of waste disposal during this
period35.
A comparison of the estimated waste generation rates for some municipal areas
in Australia is contained in Table 1.
1,000
800
600
400
200
0
Caboolture Brisbane Perth Sydney Port Stephens
Source: Sinclair Knight, Waste Management Strategic Plan for Caboolture Shire
35 Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic & Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148.
36 Source: Sinclair Knight, Waste Management Strategic Plan for Caboolture Shire
37 Port Stephens Shire is approximately 180 km from Sydney, and is in an area of similar urban and
commercial / industrial characteristics to Caboolture Shire, but with a reduced annual growth rate.
the order of one million tonnes per annum. This level of recovery is being
achieved mainly from commercial and industrial sources, and includes materials
such as scrap metal, plastic, and paper products, whose inherent value makes
their recovery for recycling commercially attractive.
While levels of waste minimisation and recycling may still increase somewhat
under present policies, new initiatives will be required to remove an additional
one million tonnes from the Sydney solid waste stream to meet the NSW
Government's 50% waste diversion target by the year 2000.
Cook and van den Broek38 have predicted that the key tools available to meet
the 50% diversion target for Sydney will be additional waste avoidance
(particularly in the commercial and industrial sectors), recycling, green waste
removal and processing; and new processing technologies such as Neutralysis,
advanced composting, and refuse derived fuels (RDF).
Based on these costs, and assuming that funding support of $20 per tonne will be
required to remove additional tonnes of waste by avoidance and recycling, the
38 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
39 Source: Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
estimated weighted average cost for waste disposal in Sydney expressed in 1993
dollars would increase as shown in Table 3.
The above information and trend is more clearly demonstrated in the graph
below:
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0
1993
1994
1995
1996
1997
1998
1999 Weighted Average Cost
2000
40 Source: Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
from $US40 to $US110 (trash to energy plants or lined landfill). This cost is
equivalent to $A55 to $A150 at the 1995 exchange rate. Costs in other US States
were said to be similar41.
The Industry Commission recently conducted an inquiry into waste recycling and
noted that:
In it's Waste Management Strategic Plan for the Caboolture Shire Council, Sinclair
Knight and Partners made the following comments on recycling options43:
"It is likely that in the short term, recycling will provide the bulk of waste diversion
schemes being employed by local authorities. The viability of any recycling
scheme is dependent on many factors including the cost of collection, the
market value of the material less the cost of transport to the market, and the
volume of material collected which is dependent on community participation
rates. The viability of recycling schemes are particularly affected by remoteness
of markets for recyclable materials, and transport costs are a major constraint.
On a commercial basis, recycling schemes are viable if the cost of the recycling
is less than the value of the recycled material. However, this does not account for
the cost savings in waste disposal. To this extent, Councils should subsidise or
otherwise provide assistance to recycling."
The present recycling initiatives have been largely directed at higher value
materials that can be easily separated. These include metal scrap, glass, plastics
and paper. Most of the potential for the recovery of these materials may have
been already exploited.
41 Duston, Thomas E. (1993) "Recycling Solid Waste" Quorum Books, Connecticut, ISBN: 0-89930-754-X
42 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
43 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
However, concrete and masonry products can be used as construction site fill or
crushed and screened to produce both drainage and road base materials. The
recent construction of the third airport runway into Botany Bay used a significant
proportion of treated demolition material. The Industry Commission in 1991
estimated that 80% of Sydney's demolition rubble was being recycled at that
time44. However, the long term opportunities for the economic construction site
disposal of untreated hard fill may not match the recent Sydney performance.
One of the existing landfill sites in the Caboolture Shire - located at Boundary
Road, Narangba.
Sinclair Knight & Partners report that trials undertaken in Brisbane suggest that
crushed and screened masonry rubble can be produced for about $7.50 per
tonne45. At this price the product is a competitive substitute for quarried
materials. Estimates by Brookes et al for the Shire of Hornsby north of Sydney
(1994), suggest that the reuse of crushed aggregate from clean and hard fill
could save the Hornsby Council up to $14 per tonne for materials otherwise
purchased46.
44 Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic & Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148.
45 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
46 Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic & Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in
Moreover, the charges levied for the private dumping of industrial waste at
council landfills has been increasing sharply. Dumping charges for commercial
and industrial wastes at Brisbane and adjacent council landfills now range up to
about $50 per tonne.
Landfill sites will be scarce and dumping will be under pressure from urban
residents.
Waste disposal costs (including landfill lining and waste handling including
compaction and transport) will be high.
There will be a local demand for the product fuelled by a high level of
building activity, particularly for added value variants such as bricks and
tiles.
An indicative location for such a pilot plant is the Shire of Caboolture. The Shire is
growing rapidly, indicating an increasing supply of refuse, together with an
expanding demand for building materials. One of the characteristics of an
expanding urban area is a relatively high proportion of hard-fill in the refuse,
compared with areas of stable population where soft domestic waste is the
major component of garbage. This characteristic will provide the best feedstock
for the Petemic process.
Since 1971, the population of the Shire of Caboolture has increased at growth
rates in excess of 10% per annum, and growth is expected to continue at up to
8% per annum in the period to 200647. This high growth rate is being maintained
by urban expansion and inward migration of people.
The population of the Shire is now expected to more than double to 160,000
people by the year 2006. If the present housing occupancy rate remains at the
current level of about 3.0 people per household, then the number of residences
will also need to double from the current number of about 25,000, to about
53,000 houses by the same date48 49.
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148
47 Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"
48 Source: Australian Bureau of Statistics (various publications including 1991 Census of Population &
Housing, and Planning) Collaborative in Conjunction with Caboolture Shire Council
If occupancy remains at around the current 2.65 people per household, then the
number of dwellings could exceed 60,000 as per the table below:
The above information may be more readily absorbed by viewing the Graph
below:
Thousa nd s
100 40
50 20
0 0
1971 1976 1981 1986 1991 1996 2001 2006
Ye ar
Between 1985 and 1993 the number of building approvals in the Shire increased
by 99.7%. Projections by the Department of Housing and Local Government
show that construction in the Shire of Caboolture will increase to the year 2006,
while Brisbane City will decline. Within the Strategic Land Use Plan there are
large tracts of land allocated for sub-divisional development coupled with
relatively short processing times for applications. According to the Department
of Housing and Local Government, sub-divisional approvals in the Shire take
approximately four weeks compared to approximately eight to nine weeks in
Brisbane50.
25
No . o f n e w Dwe lli n gs
20
Thousa nd s
Brisb a ne C it y
15 C a b oolt ure
10
5
1986-1991 1991-1996 1996-2001 2001-2006
Ye ar
Source: Medium Series Dara
Dept. Housing, Local Government & Palnning for the Social Justice Startegy, 1990/91 Caboolture
Most of the refuse in the Shire is currently sent to the main Caboolture landfill site.
It is estimated that this site has about 20 years of remaining life at the present
dumping rate of about 44,700 tonnes per annum.
The establishment of a waste recycling plant would significantly extend the life of
this facility, and would eliminate the need to transfer operations to a new site by
2014. Most of the other existing landfill sites in the Shire have similar or earlier
expiry dates.
The indicative Petemic plant capacity to treat all the present Shire refuse would
be about 280 tonnes per day (assuming a 5 day week), expanding to about 600
tonnes per day by the year 2006.
We are advised that the optimum sized plant for the Petemic technology is about
500 tonne per day with an indicated capital cost of $20 to $50 million52.
51 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
52 Initial indications at the commencement of the study was $20 to $25m - Petemic management later
revised this to the amount shown.
It should be noted that similar characteristics to the Shire of Caboolture are also
present in adjoining Shires, particularly Pine Rivers and Redcliffe, and it is possible
that a strategically located facility could also attract refuse from those Shires.
Accordingly, it is noted that the present and projected production of refuse in the
Shire is reasonably well matched to the optimum estimated Petemic plant size,
particularly having regard to the fact that it is likely to be several years before a
commercial scale plant could be commissioned.
However, it should also be noted that long term refuse disposal contracts have
been negotiated for most urban and per-urban municipalities close to Brisbane,
and equity issues will need to be addressed prior to establishment of any
treatment facility.
Privately owned quarries at Narangba, Moodlu and Bracalba now supply the
hard rock requirements in the Shire. Caboolture Shire Council has just approved
an additional quarry at Bracalba, and a reliable source of hard rock will be
available well into the next century. But the haulage distance from Bracalba to
the main areas of population growth in the eastern part of the Shire may allow
some advantage to a centrally located source of substitute aggregate. The
Council also operate quarries at Round Mountain near Elimbah and Wamuran to
provide aggregate for its own use.
Regionally significant deposits of fine to medium grained sand are located within
the Shire along Six Mile Creek, Lagoon Creek, Lower Burpengary Creek, and at
West Beachmere and West Torbul. Sand from these deposits is of excellent
quality and is available (at source) for a price of less than $10 per tonne. It is
unlikely that a "fine" Petemic product would be able to compete with local sand
in the short term. However, in the long term, extraction may face some
environmental restrictions and, some market potential might develop.
53 O'Flynn, M. (1986), "Revision of Rock and Mineral Resources in Caboolture Shire" reported in
Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"
The declining resource base for extractive materials is discussed in the Caboolture
Shire Council's Strategic Plan (1993)54. The Plan stresses that the availability of
economic deposits of rocks and minerals for construction purposes is essential for
the expansion and maintenance of urban services in the Shire. As urban or rural
residential development eliminates viable extractive resources, the cost of urban
infrastructure increases as materials need to be introduced from more remote
locations. This increased cost is eventually borne by the entire community.
The O'Flynn report55 as quoted in the Strategic Land Use Plan identified a number
of innovations that might have been expected to mitigate the loss of extractive
resources, these include:-
Since the O'Flynn report was prepared, extensive urban development in the Shire
has resulted in the further loss of significant extractive resources.
At the same time, the rapid spread of rural residential development is greatly
increasing the demand for low quality road base and fill. The Council has now
reached the conclusion that strategically located deposits of these materials
must be preserved where possible for the developing sections of the Shire.
Resources of creek sand along Six Mile and Lagoon Creeks are more widespread
than previously estimated by O'Flynn in 1986. The material is generally better
graded than the beach-ridge sands in near coastal areas and more suitable for
blending with concrete and bituminous aggregate. Because of the lack of
similar well graded, fine to coarse-grained sand on the north side of Brisbane, the
deposits will be increasingly significant as the alternative sources on the south
side of Brisbane are depleted.
The beach ridge deposits near the mouth of Burpengary Creek have been
worked for nearly 20 years and the remaining resources are thought to be limited.
Workable deposits of beach ridge sands are still likely in the Godwin
Beach/Beachmere area.
In the Wamuran, Moodlu area and along the Lagoon Creek area, deposits are
available in the vicinity of the existing workings. The area is largely rural and the
54 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
55 O'Flynn, M. (1986), "Revision of Rock and Mineral Resources in Caboolture Shire" reported in
Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"
The current demand for hard rock and sand in the Shire is at least one order of
magnitude greater than the projected output of a Petemic plant that would
treat all the Caboolture Shire refuse.
The demand for hard rock and sand has increased substantially in recent years,
although over the period 1993 to 1994 the situation has stabilised somewhat.
Production for the Shire of Caboolture is demonstrated in the graph below:
Sand
1994
Deco
Hardrock 1993
Source: Caboolture Shire Council, Town Planning Department (March, 1995)
From the table above, it may be seen that extraction of hardrock in the Shire of
Caboolture for the year to December 1994 amounted to 323,000 cubic metres.
Deco production was 256,000 cubic metres and sand 353,000 cubic metres in the
same year. It should be noted that aggregate and other construction materials
also enter and leave the Shire.
Accordingly it can be concluded that the physical input and output parameters
for an optimum sized Petemic plant in the Shire of Caboolture would not be
mismatched with the supply of refuse, and the expected Shire demand for
aggregate. The output from the Petemic facility would provide less than 10% of
the expected demand for sand and aggregate in the Shire.
It should be noted that aggregate also enters the Shire from adjacent sources.
However, most of the deposits of hard rock and sand in the Shire have now been
acquired by large competitive companies operating Australia wide. The most
important operators in this field are Pioneer International, Boral and CSR. These
Companies are vertically integrated and also produce pre-mixed concrete,
bricks, tiles, and a range of more specialised building products. These companies
also operate in the contract supply of materials and services in road building.
The position in the sand and rock market has similar characteristics to the
handling of domestic and commercial refuse. Large companies and long term
arrangements dominate in the market place. It will be necessary to negotiate
satisfactory arrangements with present concession holders to ensure access to
the marketplace. Although this may present some problems, the community and
government pressure to reduce landfill disposal will act as a powerful incentive in
the establishment of competitive recycling facilities. However these facilities will
need to be fully cost effective to succeed.
The price and quality of the recycled product will need to compete with locally
quarried materials. Enquiries made with a long-standing independent supplier of
aggregate at the retail level, who is also a substantial supplier of sand from his
own deposits in the Caboolture Shire56 indicates that the wholesale pricing of
aggregate and sand (ex quarry) in the Shire is as follows:
$ per tonne
Road base Medium quality at pit 9.00
Crushed aggregate 12.00
Graded aggregate (best quality) 18.00
Sand (lowest quality) 8.00
These prices are consistent with reports from other urban areas, and coincide
with estimates of the cost of crushing and grading demolition rubble.
Accordingly, it is concluded that market parameters for the Caboolture Shire are
favourable, and may be reasonably typical of similar locations elsewhere in
Australia. The Shire of Caboolture thus presents the optimum opportunity and
location for testing the Petemic technology on a commercial scale.
The demand for aggregate (including sand and gravel) is dependent on the
state of the construction industry. In turn, construction activity is a function of the
population trend and the economic climate.
56 Source: confidential
57 Material in this section has been largely sourced from: Department of Primary Industries Qld, Sand
and Gravel Resources of the Upper Brisbane and Lockyer Valleys: A Technical Information Paper, DPI,
Queensland, 1995.
However, much of the material that is extracted from the region is exported to
the conurbations of Brisbane, the Gold and Sunshine Coasts, and Toowoomba.
The region, therefore, has a potential market of nearly 2 million people, growing
at 2.5% annually (ABS, 1993).
The volumes of aggregate being produced in the region (and consumed in the
region - negligible quantities are being exported or imported) are considerable.
In 1990, the last year in which statistics are available, 17.6 Mt of aggregates,
including 6.6 Mt of sand and gravel, were produced in the Brisbane and Moreton
Statistical Divisions (which incorporate the Cities of Brisbane, Caloundra, Gold
Coast, Logan, Ipswich and Redcliffe, and the Shires of Albert, Beaudesert,
Caboolture, Esk, Gatton, Kilcoy, Laidley, Maroochy, Moreton, Noosa, Pine Rivers
and Redland).
Coarse sand and gravel is currently being won from a number of sources, mainly
from the Brisbane River estuary (0.8 Mm3/a), the Brisbane River between Ipswich
and Fernvale (0.3Mm3/a), the North and South Pine Rivers (1.0 Mm3/a), Coomera
River (.0.9 Mm3/a0 and the Mary River tot he north of the region (0.2 Mm3/a).
Fine-medium sand is mainly won from the Oxlet/Blunder Creek system (0.8
Mm3/a) and the Logan River system(0.3 Mm3/a) , as well as a variety of other
sources such as fossil beachridges near Toorbul and marine sand from Moreton
Bay (OFlynn, 1992).
Obviously, reserves from these sources are finite, and new sources will inevitably
be required. Large resources of fine-medium sand of marine origin exist in the
region but these are of lower quality than river sand and their availability is far
from certain. Reserves of coarse sand and gravel are mainly confined to a few of
the rivers in the region. Reserves in these traditional sources of supply
(particularly in the Coomera River and the Brisbane River estuary upstream of the
Story Bridge) are approaching exhaustion , while other resources (such as the
Brisbane River estuary downstream of the Story Bridge) are presently unavailable
because of opposition from sectors of the community.
Accordingly, the industry is beginning to relocate further afield into areas such as
the upper Brisbane River and Buarabe Creek. It is clear that the demand for sand
and gravel form the study area is likely to increase markedly over the next few
years. It is also clear that deposits in the region will be unable to maintain supply
beyond the short-term. Possible substitutes for such materials (i.e. long-term
sources) include the Petemic aggregate.
Sand and gravel is valued at $5-10/m3 on bank (i.e. stockpiled at the site) and
$20-25/m3 delivered to the coastal markets (landscaping and concrete blends
retail in Brisbane at $40-45/m3.). The Moreton region consumes about 3.5 Mm3/a
Most of this sand and gravel is used in concrete and concrete products. 2.5-3
Mm3 of concrete is produced in the region annually. At an average production
cost of $110/m3 delivered, the region uses about $300M of concrete annually.
Industry sources have advised the Qld Dept. Primary Industry that this represents
over 10% of the regions building and construction costs.
Alternative Sources
Fuvially derived sands and gravels are usually ideal concrete aggregates
because they have been naturally beneficiated and they usually possess a
desirable grading. However, suitable and accessible reserves of alluvial sand and
gravel are finite, and alternative sources need to be identified. Three products
need to be considered. In industry parlance, these are coarse aggregate (-
5mm), coarse sand (coarse sand/fine gravel; 1-5 mm) and fine sand (fine-
medium sand; 0.1-1 mm).
For many years, hard rock quarries have provided the bulk of Brisbanes coarse
aggregate, and the trend will undoubtedly increase as gravels become
increasingly scarce or unavailable. Rounded river gravel is preferred over crushed
rock for certain applications, such as exposed aggregate and pumped
concrete, although the main reasons for its use at present are cost
competitiveness and consistent product quality.
An example of such a quarry in the Brisbane Valley is Kansas Properties Pty Ltd
operate the Ravensbourne Sand Pit. A large face is cut into weathered, friable,
mainly medium-grained, quartose Helidon Sandstone. The clay matrix has been
partly removed as a result of groundwater leaching. The pit supplies sand for
various concrete products, plaster sand and bedding sand for the Toowoomba
market. The production level is unknown. Large reserves remain. A Mining Lease is
also held over the area for silica sand and kaolin (OFlynn, 1992).
Crusher dust from hard-rock quarries can substitute for coarse a\sand in concrete
but it is generally only used when there is a supply shortfall because its shape is
greatly inferior to that of sand. Its sharp, tabular nature decreases workability and
pumpability, necessitates a higher cement content and allows increased
shrinkage. This problem can be ameliorated to some extent by the use of impact
rather than jaw crushers, and the used of certain admixtures (chemicals which
modify concrete properties such as setting-time or viscosity).
Gap-graded concrete mixes (deficient in coarse sand) are possible but are
generally undesirable because of the need to increase the contents of fine sand
and cement to fill the interstices. More water is required in the mix to maintain
workability and the strength of the concrete decreases. The higher cement
content increases the cost of concrete and places additional pressure on
calcium carbonate deposits, which are often environmentally sensitive areas
(e.g. coral in Moreton Bay, limestone at Mt Etna).
The DPI suggest that, where possible, alluvial sand resources should be conserved
for the more valued end uses. For example, lower grade materials could be used
in lieu of river sand for general fill or bedding material. This is, of course, much
easier said than done, because river alluvium is often more readily available and
less expensive to supply, and the higher quality product will be assured of
meeting quality specifications. If follows that for substitution will not occur unless
river sand commands a higher price.
Materials technology may conserve resources in various ways. For example, the
use of silica fume in structural concrete increases strength, and therefore less
concrete is required overall. Of course, silica fume is expensive, making it
unsuitable for more general applications. The use of flowable fill rather than
conventional concrete is increasing; this material uses a high proportion of fly-ash
and much less aggregate. Flowable fill is being used as a bedding material along
part of the Wivenhoe-Tarong Pipeline route.
Concrete is being recycled in many parts of the world, generally for use in roads
and as bedding material, and in some cases for reuse as concrete aggregate.
Recycling is being trialled by the Brisbane City Council for use in suburban roads.
There are, however, a number of problems associated with concrete recycling,
such as quality control. Nevertheless, in future, waste concrete is likely to become
an important source of constructional material. Other recycled and artificial
aggregates (e.g. tyre rubber) have limited applicability and are of marginal
interest.
4. Any exclusive right or concession which might limit the competitors rights to
obtain a raw material, or supply a product or service to the marketplace.
Unless precise detail about the above mentioned parameters is available, then it
will be impossible to derive the competitive boundaries for each of the relevant
parameters for which advantage might arise. Moreover, the market response to
a new competitor for the existing potential operators will be very difficult to
predict. It is suffice to say that the Australian market for aggregate and
construction materials is dominated by several large vertically integrated
national companies.
The market survey revealed that the potential production from a Petemic plant
based in the Caboolture Shire would have an output less than one tenth of the
total production of generic extractive aggregate in the Shire.
No information was available on Petemic product price at the time the survey
was conducted.
At the bottom end of the aggregate market, the product can be regarded as
generic, and competition will be based on price, provided that the product
reaches the specifications required in the marketplace.
The likely market competitors vary from place to place. It can be expected that
the main competition will be the major Australian building products companies.
These companies include CSR Ltd, Boral Ltd, and Pioneer International Ltd. These
companies all quarry rock and sand at a large number of locations, and produce
bricks and other derived products. They also offer a large range of contracting
services (such as road building) that utilise the source building materials. Privately
owned independent suppliers also operate at many locations especially where
they have secured exclusive rights to raw material deposits.
No product has been produced from the Petemic process at the time the market
survey was prepared, and no specifications had been provided that would have
enabled the writer to seek comment from potential purchasers. The market
survey was conducted on the assumption that the product(s) would be of
equivalent quality to materials obtained from extractive deposits.
The extractive industries and infrastructure construction projects are often subject
to exclusive arrangements that limit the entry of competitors.
Exclusive assess to extractive resources is the general rule, and the large national
companies have secured deposits at strategic locations. This fact may enable
some operators to price products above a competitive market price, and enable
them to maintain a comparative advantage over new entrants.
This may have some impact on a potential entrant (such as Petemic) where the
existing operator has an excessive margin that will enable price reduction in the
face of competition.
This survey was directed at establishing competitive prices that Petemic would be
likely to face. As far as the Consultants can judge, Petemic has no advantage
arising from an exclusive access to material not available to others.
Indeed, Petemic is yet to secure guaranteed access to the raw material sources
(garbage and builders rubble). At present, this raw material source is the subject
of an exclusive right held by Hunter Brothers. If the Petemic process is to source
input material from the Caboolture Shire it will need to negotiate with Hunter
Brothers. The cost of any arrangement negotiated will be relevant in establishing
comparative advantage for the Petemic process.
As to the secondary issues mentioned above, the source and availability of raw
materials will need to be secured in advance of any plant establishment. At the
time of conduction of the market survey, no information on manufacturing costs
or overheads were available, nonetheless Petemic management have advised
that costs will be low enough for Petemic to compete. The issues of marketing
ability and product range cannot be addressed until some product is actually
processed. The compliance requirements have been set out in the environmental
section of this Report, and will need to be factored into the manufacturing
process and costs.
The final issues of access and vertical integration require some comment.
Petemic is a small company with no national scope. Moreover it does not provide
immediate prospects for vertical integration unless it forms an alliance with
another group to assist with product demand.
Petemic will need to address some of these issues prior to establishing their Pilot.
CONCLUSIONS
The disposal of municipal waste has become a significant problem for local
government authorities throughout the developed world. Earlier levels of waste
generation at about one tonne per person per year have declined somewhat in
the mid 1990's because of recycling and other government initiatives. However,
the economic separation and recovery of the higher value items in municipal
waste may now be reaching a practical limit.
58 Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic & Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148.
59 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council
This analysis suggests that the break even point for the basic Petemic process
might be about $50 per tonne of refuse input. This might be allocated as to $40
per tonne in landfill utilisation cost avoided, and $10 per tonne in base product
value (on site).61
The available data suggests that sufficient waste is available in the main
metropolitan and urban areas to provide a consistent supply of input raw
material, and that a regular demand for the basic output would be available at
a price that would be competitive with quarried materials.
Further, it is apparent that the physical input and output parameters for an
optimum sized Petemic plant in the Shire of Caboolture would not be mismatched
with the supply of refuse, and the expected Shire demand for aggregate. The
output from the Petemic facility would provide less than 10% of the expected
demand for sand and aggregate in the Shire.
However, it should be noted that no attention has been given in this analysis to
the ownership of municipal waste, or to any contractual arrangements that local
government bodies may have made with waste disposal contractors.
Sales Potential
Based on the foregoing data, calculations for annual sales potential are
provided as follows:
61 As noted previously, this compares to the direct cost to local government authorities of landfill
disposal in metropolitan and urban Australia which currently varies up to $50 per tonne in areas of
higher population density.
The above estimates assume production in the order of 0.9m to 1.6m cubic
metres of aggregate. This compares to the current Shire demand as follows:
The following graph of the above sales estimates is provided for analysis and
comparison:
Low Estimate @ $8
30
Mid-Estimate @ $14
Millions
20
10
0
900 980 1,060 1,140 1,220 1,300 1,380 1,460 1,540 1,620
940 1,020 1,100 1,180 1,260 1,340 1,420 1,500 1,580
Expected demand for Sand & Aggregate in the Caboolture Shire (cubic metres)
SITE ANALYSIS
PROSPECTIVE SITES
The Consultants have followed the Clients directive in endeavouring to establish
prospects for a suitable site or sites within the context of Queensland, and
preferably South-east Queensland. From this point, the viability model for the
establishment of a suitable Petemic plant can be adapted according to site
variables and infrastructure requirements applying to any particular location.
An indicative location for such a pilot plant is the Shire of Caboolture. The
rationale here is that the Shire is growing rapidly, indicating an increasing supply
of refuse, together with an expanding demand for building materials.
There are several prospective sites in the Caboolture Shire that may be suitable
candidates for the setting up of a pilot plant. These have been visited by
Company management and the Consultants.
5. Should most likely to be acceptable, prima facie, to the local Council (and
meeting likely requirements imposed by the Town Planning department in
particular).
62 Some changes to the criteria listed below may be possible if plant design is modified
63 To be confirmed by Engineer
64 According to advice received by Petemic management
65 That is, supply of refuse must be sourced in sufficient quantities to support the ongoing viability of the
Petemic processes raw material requirements. In the case of the Caboolture Shire, the rapidly
growing local population indicates, primae facie, an increasing or at least maintained supply of
refuse.
One of the possible sites - located at Narangba Industrial Estate. An ideal location
because of the appropriate land zoning.
(Special Note: The Caboolture Shire Council Town Planning maps67 indicate
that the Estate is zoned Special Industry and in other parts Special Purpose.
The Department of Business, Industry & Regional Developments Locality map has
categorised the Estate as being either Special Industry and / or General
Industry. Council advice received indicates a Noxious, Offensive or Hazardous
Industry zoning).
Whilst advice to hand is that the existing Industrial Estate lots have all been taken
up for development, expansion of this estate is imminent.
67 Caboolture Shire Council Town Planning Scheme Map numbers 1:10,000 *15 (Issue #1), and 1: 5,000
*14C (Issue #1).
68 Source for information on the Narangba Industrial Estate is the Strategic Land Use Plan (1993),
Caboolture Shire Council (pp. 137 - 138).
69 The Sunshine Coast Economic Development Board claim that the Sunshine Coast region is the fastest
growing population centres in Australia.
Area located on the outskirts of the Narangba Industrial Estate - creekbed to the
north / north-east, with some evidence of pollution from other nearby industries.
The area of the Industrial Estate is able to be further expanded towards this
locality, with fire hydrants located strategically along the track seen to the rear of
the photograph.
8. Excellent road access for heavy vehicles. Easy access to the Bruce
Highway.71
10. Narangba Industrial Estate enjoys a significant Buffer zone which should
serve to minimise or eliminate any undesirable effect on nearby residential
areas.
70 Whilst indications are that the majority of lots on the Narangba Industrial Estate have been taken up,
the area will be expanded further. Also, there has been limited development occurring on the
outskirts of the Estate inferring that some blocks may become available for resale by private vendors.
71 Very limited exposure to residential areas
11. Viewing from major arterial roads or highways is highly restricted. This will
assist in minimising, or eliminating, any visual intrusiveness.
12. Close proximity to a number of existing landfill dump sites, including those in
several adjacent shires.
One of the existing Landfill dump sites located in the Caboolture Shire - and a
possibility for co-development with a Petemic Plant located on site. This one is
located at Boundary Road, adjacent to the Narangba Industrial Estate (Caboolture
Transfer Station).
There are potentially a number of other fairly suitable sites located within
reasonably close proximity to central Caboolture, for example a 300 acre (121
hectare) site located along Boundary Road72, and existing landfill / dump sites.
There may also be some potential to site the Project on an existing landfill site,
however this would need to be negotiated with the Council and / or waste
management contractor. Design of the plant, however, would need to take
account of the possibility of leeching material. Some caution is advised since any
problems associated with landfilling activities might be wrongly attributed to the
Petemic process.
To provide for industries which by their nature are likely to be noxious, offensive
or hazardous in relation to other types of land use including other industries. Large
scale general industries may also locate in this zone with Council consent.
Junkyards, and other visually intrusive activities will be encouraged to locate in
this zone. Residential and other forms of incompatible land uses will be restrained
from locating near this zone.
The Narangba Industrial Estate - a suitable site for a Petemic Plant. Shown here is
the outskirts of the existing land allocation, at the end of Potassium Street.
Caboolture Shire Council advises that the property is zoned Noxious, Offensive, or
Hazardous Industry73. The proposed use on the Narangba Industrial Estate
therefore conforms with purposes for which buildings or other structures may be
erected or used or for which land may be used without consent of the council74,
including:
Limited consent (purposes for which buildings or other structures may be erected
or used or for which land may be used only with the consent of the council
includes:
agriculture
commercial premises
lot feeding (intensive)
refreshment service
73 A current zoning certificate has not been obtained. The obtaining of such a Certificate is time
consuming and costly, and often an excessive requirement for the purpose of this Report. The
Consultant has therefore relied upon the verbal advice of Council.
74 Definition has been obtained from the Government Gazetted Table of Development: Noxious
Offensive or Hazardous Industry Zone.
75 Such purposes are subject to special conditions
Purposes for which buildings or other structures may not be erected or used or for
which land may not be used (i.e. prohibited development) includes:
Council has advised that there are no immediate planned changes to the land
zoning.
Another view of the Narangba Industrial Estate, taken from the western
extremity of existing development. Note the excellent bitumen road access.
KEY MANAGEMENT76
Key management, consisting of three personnel (plus professional support
services), are vested with quite different and distinct responsibilities as follows:
General Manager
The General Manager is responsible to the Petemic Board of Directors for the
implementation of policy, and the leadership of the Petemic team. His is the
ultimate responsibility for the financial performance of the Company and its
production / processing operation. For this reason, his primary role is to
achieve Company objectives.
Administration Manager
Production Manager
The Production Manager has a critical role in the Petemic organisation, in that
he is responsible for the engine room of the Company (i.e. production and
processing operations). In addition to being the designated Quality Control
Officer, the Production Manager will need to demonstrate detailed
understanding, flair and initiative in relation to the Petemic process.
This position also carries the ultimate responsibility for the production of the
Petemic end-product to the specifications and standards established as
Company policy (subject to the outcomes of any ongoing research and
development activity). This must be achieved in the most cost-efficient
manner possible.
76 For convenience only, the Consultant has adopted the words he or his when referring to staff
positions and organisational structure. However, the Consultant is committed to presenting data on
an equal opportunity basis and for this reason the words she or her could also be used in
replacement of the foregoing except where otherwise and specifically noted.
Finally, the Production Managers other critical area of responsibility is the day
to day management of most Company staff. It can be expected that this
person will have a key role in the hiring and firing of production and
processing personnel.
The Company will need to consider the implications of the possibility of key
management not being present for extended periods (especially the General
Manager). Not only does this imply that the need for delegation of management
responsibilities, but more importantly it emphasises the importance of putting in
place a "succession plan" (comments follow below) for the current owner-
Directors.
There is currently a reliance of "Key Men" (i.e. Walsh, Holbut, and Schulz). Because
of their critical management and other functions undertaken, a risk to their
spouses (as may be applicable), and the ongoing viability of the Company exists,
they become incapacitated for a medium term or longer.
This risk will be considerably exacerbated once the Viability stage has been
completed, and presumably construction commences on a Pilot or Commercial
Plant.
One way that this may be overcome is for key management to identify suitable
persons for succession. It is in fact in their own interest to do so, as the Consultant
is not only cognisant of the personal objectives of the owners, but if the business is
to become more self-reliant, it is imperative that this matter be attended to. This
could be progressed along with a proposed ATFIC77 program to be developed
(the ATFIC is explored in the next sub-Section of this report).
In the short to medium term, the Consultant recommends that the existing Board
should look for at least two other, independent, non-executive Board members
with expertise in the areas of:
Financial Management
Engineering Technology (preferably with specific skills in the area of waste
management)
This would serve to bolster the skill base and expertise required to effect
implementation of the Project.
Industrial Chemist
Consultant(s)
Suggested allocation: $1,500 per month for the first year commencing upon
completion of the Viability Analysis (General Consultancy), and $1,500 per month
for the first year commencing upon completion of the Viability Analysis
(Consulting Engineer).
Suggested allocation: $3,000 per annum for the first year commencing upon
completion of the Viability Analysis (Accountant); $1,500 per annum for the first
year commencing upon completion of the Viability Analysis (Auditor); and $1,000
per annum for the first year commencing upon completion of the Viability
Analysis (Solicitor82).
Sub-Contracted Services
The following services will need to be retained for the provision of various sub-
contracted services:
Maintenance Crew
Assuming one shift only per day:
Allocate $1,000 per month (first year of operation post Plant Construction)
Allocate $2,000 per month (second year of operation)
Allocate $2,500 per month (third year of operation and thereafter)
The maintenance crew (comprising skill areas of fitter and turner, and
boilermaker) will be charged with the responsibility of maintaining the Petemic
plant. A reduced requirement is indicated in the early stages of plant operation.
The Maintenance Crew will be directed by the Production Manager. As with all
sub-contracted and professional services, confidentiality agreements will need to
be executed with the Companies / individuals concerned.
Security Guard
Assuming one shift only per day:
Allocate $800 per month (first year of operation post Plant Construction)
Allocate $800 per month (second year of operation)
Allocate $800 per month (third year of operation)
The Security Guard will be charged with the responsibility of ensuring the entry of
only those persons authorised to do so, or otherwise legally required, outside of
Plant operation.83
83 During hours of Plant operation, the Weigh Bridge Operator will be charged with the responsibility of
security.
The Electrical and Engineering Contractor will be charged with the responsibility
of maintaining the electronics and controls relating to the Petemic Plant. A
reduced requirement is indicated in the early stages of plant operation.
The Maintenance Crew will be directed by the Production Manager, but with the
input from the Engineering Consultant engaged by Petemic.
ORGANISATIONAL STRUCTURE
The organisational structure of Petemic Technology Pty should be relatively flat,
allowing for smooth communications between factory workers, and
management.
ORGANISATIONAL CHARTS
The following charts represent the organisational structure and line operations /
responsibility of the Company for one, two and three shifts86:
84 Since the Weigh Bridge Operator is charged with the responsibility during operation hours, in the
case of three shifts the Plant would always be secured by employed staff.
85 Equivalent to $40 per hour
86 For clarity, a full page of the Organisation Chart for One Shift only is appended to this Report
One Shift
PETEMIC TECHNOLOGY PTY LTD
ORGANISATION
ORGANISATION CHART
CHART
(ONE SHIFT)
GENERAL MANAGER
x1
* Vision
* Leadership
* Management
* Overview
Two Shifts
PETEMIC TECHNOLOGY PTY LTD
ORGANISATION
ORGANISATION CHART
CHART
(TWO SHIFTS)
GENERAL MANAGER
x1
* Vision
* Leadership
* Management
* Overview
Three Shifts
PETEMIC TECHNOLOGY PTY LTD
ORGANISATION
ORGANISATION CHART
CHART
(THREE SHIFTS)
Support
GENERAL MANAGER
x1
* Vision
* Leadership
* Management
* Overview
The development of written Job Descriptions, defining the nature, scope and job
function, along with relevant authority levels, is an important aspect of the
Petemic management function. It is emphasised that a key factor in bringing
about an efficiently managed organisation will be the clear definition of job
functions and reporting lines. This becomes of even greater significance as
employee numbers increase, and where the available time to spend with
employees becomes less.
Job descriptions - developed for all existing and proposed positions, provides in a
written form clear delineation of job duties/responsibilities and reporting lines.
Ideally, each Job Description should be further refined in conjunction with each
employee.
The Job Description models located at Appendix D could be used as a basis for
the development of all staff positions. The major features of worthwhile and
meaningful job descriptions are:
Results and duties are both stated (the result expected and the duties
needed to accomplish the result)
The focus is on results (including how the job fits into the overall scheme of
the organisation, and how the job fits into the organisations' mission)
Clear writing style, with job descriptions simple and easy to understand.
Should the Company wish to progress this matter, or in order to assist in identifying
the training requirements of the enterprise, the Consultant recommends that the
Company engage the services of Dr. Catherine Norton of the Norton Consulting
Group87, for the purpose of submitting an ATFIC (Assistance to Firms
Implementing Change)88 proposal which would examine these and other issues
related to staffing. The Government may provide up to $40,000 funding for this
purpose. The primary purpose of this program should be to effect improvements
in productivity.
SKILLS AUDIT
The following data is provided to guide management in the selection of
personnel capable of performing executive and other positions planned for
Petemic Technology Pty Ltd.
87 Phone 07-369 5523. The Consultant would be willing to arrange an introduction and preliminary visit if
so desired.
88 ATFIC is a program run by DEET (Dept. Employment, Education & Training), and is designed to assist
firms to expand or restructure and to develop business and human resource practices. The program
assists companies retain or expand their workforce, and is designed for firms who have less than 50
employees, with up to $40,000 in funding over a 12 month period.
GENERAL MANAGER
ADMINISTRATION MANAGER
SECRETARY
91 Equivalent to Grade 4 - State Clerical Employees Award ($420 per week base rate)
PRODUCTION MANAGER
93 Equivalent to General Labour Rate (Building Construction Industry Award) being $431.68 per week
LOADER OPERATOR
94 Equivalent to Transport Distribution and Courier Industry Award - Grade 3 being $401.70 per week
(Grade 4: 5-10 tonne)
95 Equivalent to Transport Distribution and Courier Industry Award - Grade 4 being $409.30 per week
(Grade 5: 10-34 tonne)
96 Equivalent to Transport Distribution and Courier Industry Award - Grade 4 being $409.30 per week
(Grade 5: 10-34 tonne)
GENERAL HAND
97 Equivalent to Building Products Minor Manufacture Award - ranges from Junior 16-17 ($188.80 per
week) to Junior ($291.70 per week) and Adult ($343.20 per week). Allowance: average, say $290 per
week.
The future success of the Company's market penetration to both local, and
potentially export markets, could well depend upon the Company's commitment
to QA accreditation, and should therefore be addressed with some priority. Local
Councils are becoming more insistent that service providers (and Petemic is
potentially one of these) be Quality Assured.
98 Equivalent to Transport Distribution and Courier Industry Award - Grade 4 being $409.30 per week
(Grade 5: 10-34 tonne)
Progression to TQM is an option further on, however will capitalise and strengthen
a formal commitment to QA principles.
It embraces all products, all services, all processes, all people, at all
levels.
Implementation: NIES has developed a comprehensive TQM 'How To' model. the
NIES network will assist in the selection of a trained and licensed
consultant.
CAPACITY
The capacity of feed and product storage will depend upon aspects such as
supply arrangements, operating schedules, requirements for buffer capacity,
marketing arrangements and seasonal demand for the product. Open stockpiles
offer advantages to silos in that they are more accessible and not prone to
blockage or hold up. On the other hand they take up more ground space and
can be subject to product degradation. Examples of sizes for a 500 tpd waste
plant, receiving on one shift per day, 5 days per week are:
Pre-Heater
(600deg.C)
BINS
(Product for Sale)
WASTE SELECTION ROAD BASE (Crushed Building Rubble) WASTE REDUCING MEANS
BINS
BUILDERS RUBBLE Building (Product for Sale) Plastics Small Ferrous BINS
HOUSEHOLD GARBAGE Rubble (Oval) METAL Metal Separator (Product for Sale)
CLAY Crusher MIXER & BINDER STAGE METAL
INDUSTRIAL WASTE
(Non-Toxic)
Figure 2- Block Diagram of the Petemic Waste Recycling Process (Petty Patent)
INTRODUCTION
The primary legislation governing environmental issues in the context of the
operation of a Petemic Plant are addressed in the Environmental Protection
(Interim) Regulations 1995 (SL No. 46 of 1995). The primary areas of responsibility
are:
3. Assessment criteria for air quality are set out. National Guidelines for air
quality and control of emissions follow standards adopted by ANZECC & NH
& MRC (1985)
5. Noise level parameters are defined. Maximum noise levels are set out in
the schedules. In general the acceptable limit will be 8-10 dB above the
background noise level.
For the Petemic process, an EIS (Environmental Impact Statement) will almost
certainly be required containing very specific data.
Licensing will be dependent on satisfying both the Council and the State
Government. In practice the administration and enforcement of the Act is
devolved to Local Government, but the Consultants believe that the Caboolture
Council is reluctant to specify any clear guidelines in advance of a detailed plan.
OVERVIEW
The disposal or treatment of domestic waste is classified as a Level 1
Environmentally Relevant Activity under the Environmental Protection (Interim)
Regulation 1995 (SL No 46 of 1995) (The Regulation). The Regulation is
Subordinate Legislation as part of the Environmental Protection Act 1994.
The Regulation requires that defined Activities must be licensed, and must
comply with regulatory guidelines.
The compliance requirements are presently in a state of flux, as new and uniform
guidelines are developed for all Australian States following the passage of the
National Environmental Protection Council Act 1994 (Commonwealth), and the
complementary legislation; the National Environmental Council (Queensland)
Act 1994. In some instances new standards are in force and replace former
guidelines established under a range of earlier Queensland legislation. In other
instances, earlier guidelines will remain in force until new guidelines are
developed. Moreover, it is likely that Environmental Auditing under ISO 14000 will
be implemented in early 1996. Standards Australia through its QRII Committee,
may issue the latest draft of ISO 14000 as an interim standard for Australia.
The Regulation (SL No 46 of 1995) establishes new and detailed guidelines for the
use of ozone depleting substances, particularly refrigerants and other
halogenated hydrocarbons. It is possible that these particular requirements of
the Regulation will not impact greatly on the Petemic process. But in the
absence of detailed information on the process machinery and the nature of the
gas emissions, the writer cannot be certain that there will be no impact at all.
It can be expected that the new Environmental Guidelines will apply to the
establishment of any Petemic manufacturing facility, the operation of the facility,
and the training of the staff.
It is almost certain that an Environmental Impact Study (EIS) will be required prior
to licensing. It is equally likely that a Management Plan will be required as part of
the licensing procedure.
With the particular product range anticipated from the Petemic Process, it is also
likely that quality parameters will be set for the testing and use of any exported
product.
Although the Minister for Environment and Heritage administers the Environmental
Protection Act 1994, Ministerial powers are usually delegated to Local
Government Authorities.
The absence of any strong precedents relating to overall compliance under the
new legislation will mean that any and all Councils will be extremely reluctant to
commit themselves to approving any new project having environmental
overtones without a very detailed submission.
Enquiries with the Caboolture Shire Council have confirmed their level of
uncertainty about the intention of the Government in the administration of the
Environmental Protection Act. It is virtually certain that the Council will decline to
offer any guidelines or advice other than those contained in the Legislation and
Regulation. Moreover, responsible Council Officers have indicated to the writer,
that the Council will not be prepared to offer any opinion on the acceptability of
a project without a detailed submission in terms of the Act.
The present policy of the Council is to require a Request for Terms of Reference
for an Environmental Impact Statement pursuant to Section 8.2 of the Local
Government (Planning and Environment) Act to be lodged with the Department
of Housing, Local Government and Planning. This particular Legislation defines
Designated Developments requiring an EIS. Item 30. of these designated
activities is reproduced below:
30. Refuse transfer station, sewage treatment plant, waste disposal facility,
waste landfill or waste treatment plant for burying, crushing, disposing of,
incinerating, processing, recovering, storing, or transferring hospital wastes
or chemical, liquid, oil, petroleum, or solid wastes.
GUIDELINES BACKGROUND
As mentioned above, Transitional Provisions are in force for designated activities.
2. Water Quality
3. Noise
Air quality will be subject to analytical contents standards, and testing for
dispersion. The present interim compliance standards follow Exposure Standards
for Atmospheric Contaminants in the Occupational Environment adopted by
the National Occupational Health and Safety Commission, October 1991. The
interim national air quality standard means the lower value of;
(a) for fluoride-a goal stated in National Goals for Fluoride in Ambient Air and
Forage, March 1990 published by ANZECC;
(c) for odour, units calculated under the approved laboratory method.
The more recent National Guidelines for Control of Emission of Air Pollutants from
New Stationary Sources was published by the Australian Environmental Council,
National Health and Medical Research Council (NHMRC) in 1986.
These guidelines are included as Schedule 1 at the end of this section.
Water Quality
In general, a facility of this type will be required to retain all liquid effluent
produced on the site. Containment of run-off after rain will also be required if the
run-off is likely to scavenge any pollutants from the surface of the site. The use of
containment ponds to intercept any surface run-off may be required. Where
there is a chance of pollutants percolating through to the groundwater, a
mechanical barrier may be required. The use of sheet sealing to prevent
percolation to the groundwater is becoming a more common feature of urban
refuse landfill sites.
The more stringent requirements for site pollution and percolation should be a
positive point for the Petemic process relative to the increasing compliance costs
in landfill. But compliance will also be a feature of the Petemic operating site,
and care will need to be taken to restrict any risk of site pollution and run-off from
introduced refuse.
The standard criteria for water under the Transitional Provisions of the Regulation
are:
(a) for paragraph (j) of the definition standard criteria in the Act, the
Australian Water Quality Guidelines for Fresh and Marine Waters published
by ANZECC is the relevant standard for an activity involving the release of a
contaminant into waters.
(b) for subsection (1), the collection, storage, preservation and analysis of
samples for measuring a parameter under the Guidelines must be carried
out under the Water Quality Sampling Manual, 2nd edition, February 1995.
It is likely that the relevant ANZECC standard applied will be the guidelines for
raw waters for drinking purposes. These guidelines are attached as Schedule 2.
Schedule 7 of the Regulation sets the maximum noise level for a commercial
place as 10dB above the background level during the day, and 8dB above the
background level during the night (10pm to 7am).
Table 1
Schedule of Pollutants
Shipping Ringelmann 1
Opacity1 All sources 20%
(excluding effect except the following:
of water vapour Portland cement plants
- clinker cooler 10%
- other 20%
Nitric acid plants 10%
Iron and steel plants
- basic oxygen process furnaces 10%
- dust handling equipment 10%
- other 20%
Primary aluminium reduction plants
- prebake 10%
- other 20%
Lime manufacturing plants
- rotary lime kilns 10%
- other 20%
Petroleum refinery FCCU
- other 30%
Kraft pulp mills
- recovery furnaces 35%
other 20%
Solid particles Boilers other than power stations 0.25 g.m.-3 2% CO2
burning solid fuels reference
Power station boiler 0.08 g.m. -3 level
12% CO2
reference
level
102 The more stringent (level) of Dark Smoke or Opacity to apply, dependent on measurements
available.
SCHEDULE 1.2
Table 1
Schedule of Pollutants (continued)
2.0 kg.t -1 of
100% acid
Acid gases 0.4 g.m. -3 Acid gases
and mists
readily
soluble in
water and
expressed as
hydrochloric
acid
SCHEDULE 1.3
Table 1
Schedule of Pollutants (continued)
Gas Turbines
For gaseous fuels
- rated electrical output as follows:
less than 10 MW 0.09 g.m. -3 Nitrogen oxides
greater than 10MW 0.07 g.m. -3 calculated as
For other fuels NO2 at a 15 per
- rated electrical output as follows: cent oxygen
less than 10 MW 0.09 g.m. -3 reference level2
greater than 10 MW 0.15 g.m. -3
Fluorine Any process or industrial plant used 0.02 g.m. -3
compounds for the manufacture of aluminium expressed as
from alumina hydroflouric
acid Limit refers to total
emissions from
Any other trade, industry or process 1.0 kg F or F new primary
compounds aluminium
expressed as F smelting facilities
per tonne of
aluminium
produced
0.05 g.m. -
expressed as
hydrofluoric
acid
SCHEDULE 1.4
Table 1
Schedule of Pollutants (continued)
SCHEDULE 1.5
Table 2
Schedule of Hazardous Pollutants*
*These pollutants will be kept under review. Further standards will be declared when
appropriate.
SCHEDULE 2.1
Table 4.1 Summary of quality guidelines for raw waters for drinking purposes subjected
to coarse screening
Biological parameters
Micro-organisms:
Total coliforms Up to ten coliform organisms may be occasionally accepted in
100 mL. Coliform organisms should not be detectable in 100 mL
of any two consecutive samples. Throughout any year, 95% of
samples should not contain any coliform organisms in 100 mL.
Inorganic:
Arsenic 0.05
Asbestos NR
Barium 1.0
Boron 1.0
Cadmium 0.005
Chromium 0.05 = 50 ug/l
Cyanide 0.1
Lead 0.05
Mercury 0.001
Nickel 0.1
Nitrate-N 10.0
Nitrite-N 1.0
Selenium 0.01
Silver 0.05
Organic:
Benzene 10.0 ug/L
Benzo(a)pyrene 0.01 ug/L
Carbon tetrachloride 3.0 ug/L
1,1-Dichloroethene 0.3 ug/L
1,2-Dichloroethane 10.0 ug/L
Pentachlorophenol 10.0 ug/L
Pesticides (Table 4.2)
Polychlorinated biphenyls 0.1 ug/L
Tetrachloroethene 10.0 ug/L
2,3,4,6-Tetrachlorophenol 1.0 ug/L
Trichloroethene 30.0 ug/L
2,4,5-Trichlorophenol 1.0 ug/L
2,4,6-Trichlorophenol 10.0 ug/L
Radiological:
Gross alpha activity 0.1 Bq/L
Gross beta activity 0.1 Bq/L
(excluding activity of 40K)
Table 4.1 Summary of quality guidelines for raw waters for drinking purposes subjected to coarse
screening (continued)
Aesthetic parameters
Physical:
Colour 15.0 Pt-Co
Taste & odour Not objectionable*
Turbidity Site-Specific determinant
Chemical:
Aluminium 0.2
Ammonia (as N) 0.01
Chloride 400.0
Copper 1.0
Oxygen > 6.5 (> 80% saturation)
Hardness (as CaCO3) 500.0
Iron 0.3 = 300 ug/L
Manganese 0.1
Organics (CCE & CAE) 0.2
pH 6.5-8.5
Phenolics 0.002
Sodium 300.0
Sulfate 400.0
Sulfide 0.05
Surfactant (MBAS) 0.2
Total dissolved solids 1,000.0**
Zinc 5.0
INFRASTRUCTURE REQUIREMENTS
Supporting infrastructure Requirements are assessed as follows (further details are
shown at Attachment 5 of this Report):
Land Requirements
Requirement Specification
Services
Requirement Specification
1,200 m3/day of water is required (may be recycled water) plus portable water
@ 0.2 m3/person/day.
General Infrastructure
Requirement Specification
110 The water holding tank is needed for surge capacity only. Capacity of this tank is estimated at 90kL.
111 Equivalent to 350 cubic metres. On ground stockpiles are preferred. Open stockpiles offer
advantages to silos in that they are more accessible and not prone to blockage or hold up. On the
other hand they take up more ground space and can be subject to product degradation.
112 As above (Open stockpiles offer advantages to silos or as in this case, bunker holding pits)
113 A Waste Transfer Station has now been completed at Narangba. This means that there is a reduced
requirement for holding pits since waste can be accessed directly and locally on a virtually ad
hoc basis (i.e. as required). Also, refer note below table: Drainage collection and deodorising
required.
114 Estimated electrical cost (from Perry Chemical Engineers Handbook 6th Edition Table 25-50) is from
13% to 25% of delivered equipment cost. Instrumentation is estimated to be between 3% and 12% of
delivered equipment cost.
115 This is for the purpose of gas emission, and air pollution control
116 This Report assumes that all Research and Development has been completed, a Pilot Plant
established which has proven the concept. This Report assumes operation of a full scale
commercial / semi-commercial Plant, i.e. Stage IV operation as described in the attached Report
completed by Enginneers Chemquip Pty Ltd. Therefore, development phases (Stages I to III being
Conceptual, Bench Scale Testing, and Pilot Scale Stage) are assumed to have been successfully
completed.
The waste receiving area can be bunker or open floor type. The later is
becoming more popular overseas as it enables inspection and some facility for
pre-sorting. It will need to be enclosed to prevent escape of odours, and sloped
to a collection sump to collect drainings and wash-down. Deodorising sprays will
most likely be required.
The air pollution equipment specified will vary depending on the licence
conditions. It could be reasonably expected to include:
afterburner
quench (cooling)
BULDING (PREMISES)
Requirement Specification
117 The slab sizes will vary from say 4 inch to approximately 12 inch depending on use. The pulverises
and other large equipment will require special foundations and slab design.
118 To be advised by Engineer Mr Peter Stone (matter currently being investigated)
Requirement Specification
119 3 or 4 front end loaders are likely to be required (1 or 2 for waste receival, 1 for product, 1 for
intermediate product handling).
120 Motor vehicles are provided for the General Manager, Administration Manager, and the Production
Manager
121 A plant utility will be required but may be one of the 3 vehicles listed.
122 There is likely to be a requirement for at least one notebook computer for plant work
INTRODUCTION
Technical consultants Chemquip Pty Ltd suggest that the Project can be
progressed on the basis of a four stage development program. This would be
required to bring the technology from the present concept stage to commercial
viability. The suggested program encompasses bench and pilot scale testing.
Product produced in these tests will need to be tested for at least leachability
and engineering properties, dependent on the final market.
The development program is likely to take between 5 and 7.5 years. A preliminary
estimate of funding requirements based on what was spent on Neutralysis
development is $16.5 million.
At this point of time the development work has been basically conceptual. Only
one limited trial has been attempted.
Assuming the pre-feasibility study shows that the project is viable, and providing
there are considered to be no insurmountable restrictions due to the patent
situation, then the next stage of the process should concentrate almost
exclusively on technology development.
STAGE 1 - CONCEPTUAL
At this initial stage the basic process parameters and testing requirements should
be defined. Any restraints imposed by potential problems such as patent
infringement should be built in to the project.
to develop quality control procedures for the inputs, outputs and process
for the detailed examination of process parameters and for the solution of
operating problems. Some of the parameters which may need to be
investigated are, typically, process control, residence times, pellet fusion,
thermal stresses, gas quality, kiln ringing, and emissions composition.
During this stage a generic engineering design is often carried out to assist in
market development and to define capital costs more closely.
STAGE 4 - SEMI-COMMERCIAL/COMMERCIAL
This stage is usually a scale up from the Pilot Scale Stage and follows the
completion of a major feasibility study which would include a detailed
engineering study. For a plant of the type envisaged for the Petemic Technology
a scale-up factor of approximately 8 to 10:1 is appropriate for developmental
units.
It is also this stage against which the Commercial Viability is assessed which is the
subject of this Report.
TIMING
The estimated duration of the above stages is within the following ranges:
Stage 1 6 - 9 months
Stage 2 12-18 months
The financial projections in this Report assume the following milestones: (for
detailed information, refer Attachment 4 - Plant Construction and Capital
Development Program)123
Project Completion
(Commercial Plant Built & In Full Operation) 12-Sep-2000
123 Also, refer Schedule 1 of the of the Commercial Viability Supporting Schedules.
The above attachments will be referred to throughout this section of the Report:
In overall terms, the major objectives in completing the financial planning and
analysis section of this Report are:
The Financial Projections contained in this Report demonstrate that the Project is
marginally viable, with a Year-In-Year-Out Net Profit After Tax of approximately
$0.5m.
The primary base assumptions used in calculating this amount are that of 503
tonnes of Municipal Solid Waste (MSW) Garbage is received daily at a price
$40.00 per tonne, with an output of 500 cubic metres of aggregate (350
tonnes)124 sold at $14.00 per tonne.
The above primary assumptions are critical in the calculation of net profit, i.e. the
Project is very sensitive to changes in MSW Garbage or Aggregate receipts / sale
prices. For example, the level of Net Profit After tax approximately doubles where
the price received for MSW Garbage is $45.00 per tonne.
The capital required to fund the Project is $20m, with the base model assuming
that 80% ($16m) is derived from investors, and the balance ($4m) obtained
through debt funding. This will support capital works in the order of $18m, and a
further $2m working capital.
The Break-Even point125 is reached where the amount received for MSW
Garbage is $34.60 per tonne (assuming 100% equity / investor) funding.
The Project will take approximately four years (from the commencement of the
commercialisation stage) to achieve annual profitability, although this could be
achieved up to 12 months earlier should the required Capital funding be wholly
obtained from investors rather than partially obtained with debt.
SCHEDULE 1
PRIMARY BASE ASSUMPTIONS BASE MODEL
Aggregate
Production 500.0 cubic metres per day
Bulk density 0.70 tonnes per cubic metre
= Production (available for sale) 350 tonnes per day
Building Rubble
Receivals 102.0 tonnes per day
= Production (available for sale) 100.0 tonnes per day
Clay
Clay: Dry Garbage ratio 100.00%
= Required clay input 341.00 tonnes per day
125 The Break-Even point is defined as being Net Profit After Tax equalling $zero Year-In-Year-Out.
SCHEDULE 2
MAJOR INPUTS & OUTPUTS (MATERIAL BALANCE) - PRICES, & QUANTITIES REQUIRED
tonne per
Tonnes / Tonnes / Tonnes / Tonnes / Cost / Price
BASE MODEL tonne of
day week month Year per tonne ($)
MSW
Days per period = 7.0 28.0 336.0
INPUTS
Wastes
Municipal Solid Waste (MSW) Garbage 503 3,521 14,084 169,008 $40.00 1.000
Liquid waste (or water) 51 357 1,428 17,136 $0.00 0.101
Other
Clay 341 2,387 9,548 114,576 $4.50 0.678
Lime (for flue gas scrubbing) 8 56 224 2,688 $208.00 0.016
Scrubber Water 104 728 2,912 34,944 $0.00 0.207
Quench Water 1,176 8,232 32,928 395,136 $0.00 2.338
Natural Gas 8 56 224 2,688 $460.00 0.016
Combustion Air 3,390 23,730 94,920 1,139,040 $0.00 6.740
Total Inputs 5,581 39,067 156,268 1,875,216 n/a 11.095
OUTPUTS
Products
Aggregate 350 2,450 9,800 117,600 $14.00 0.696
Reclaimed metal 28 196 784 9,408 $57.50 0.056
Wastes
Rejects (non-metal) 29 203 812 9,744 $5.00 0.058
Scrubber Residues * 17 119 476 5,712 $0.00 0.034
Flue Gas 5,157 36,099 144,396 1,732,752 $0.00 10.252
Total Outputs 5,581 39,067 156,268 1,875,216 n/a 11.095
* For re-processing back through the Recycling Plant
INPUT
Building Rubble
Quantity Received 102 714 2,856 34,272 $20.00
Losses 2.00% 2 14 57 685
OUTPUT
Building Rubble
Production (Sale of Road Base) 100 700 2,800 33,600 $9.00
SCHEDULE 8
PRIMARY OPERATING COSTS / QUANTITIES BASE MODEL
Description Unit
Fuel Oil
Quantity Required (minimum): 780.0 litres per hour of operation (using heat recovery)
Quantity Required (maximum): 2,100.0 litres per hour of operation (without heat recovery)
Percentage of time operated: 5.00% without heat recovery
Quantity Required (average): 846.0 litres per hour of operation
Quantity Required (average): 568,512.0 litres per month of operation
Cost: $262.89 per tonne
= Cost: $0.2300 per litre (BP) - Shell is @ $0.30 per litre
Gas
Natural or LPG - maximum required: 90.0 Gj per hour
LPG - Cost: $0.46 per Kilogram
LPG or Natural gas $0.23 per Litre (CIG or Elgas)
Cost: $0.00 per Gj
Water (Fresh)
Maximum per day required: 1,210.00 cubic metres per day
= Equivalent to: 1,210,000 litres
= Equivalent to: 266,200 gallons
Power
Average Running Requirement = 4,040.00 Kilowatts per hour
Peak Running Requirement = 4,850.00 Kilowatts per hour
Installed Capacity Requirement = 5,700.00 Kilowatts per hour
Cost of Power = $0.0770 per Kilowatt hour (first 16 hrs)
Cost of Power = $0.0310 per Kilowatt hour (next 8 hours)
Cost of Power = $0.0617 per Kilowatt hour (average for 24 hr period)
Cost of Power = $167,418 per month average requirement
Clay
Cost = $2.50 per tonne
Average delivery charge = $2.00 per tonne
Total Delivered Cost = $4.5000 per tonne
Fuel Consumption
Water Utilisation
The amount of water used will vary depending on the moisture in the waste, the
clay properties, and the air pollution control system used. By far the largest
amount used is for scrubbing plus gas cooling.
See
Schedule
INFRASTRUCTURE & COSTS $5,107,850 3
BUILDING (PREMISES) $4,858,350 4
SUNDRY PLANT & EQUIPMENT $1,289,590 5
PLANT OPERATING EQUIPMENT $6,788,650 6
TOTAL $18,044,440
Refer Attachment 6 (Cash Flows), and Attachment 7 (Profit & Loss Summaries).
Refer Attachment 8
Refer Attachment 9
SENSITIVITY ANALYSIS
A 10% sensitivity analysis126 on the "base Model" cash flows for each of the years
1, 2, and 3 has been completed (refer right hand column on the cash flows at
Attachment 6). These amounts show in broad terms the Projects overall sensitivity
to cost/price squeeze.
In addition, sensitivities to various prices, costs, and production / input levels have
been conducted, with the results shown graphically below:
126 This analysis assumes 10% lower income, and 10% higher variable costs (i.e. loan repayments, etc.
are assumed static)
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
300 400 500 600 700
Cubic metres per day
Production of Aggregate
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
60.00 80.00 100.00 120.00 140.00
Production per day
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$25.00 $30.00 $35.00 $40.00 $45.00 $50.00 $55.00
Price per tonne ($)
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$3.00 $4.00 $5.00 $6.00
Cost per tonne ($) delivered
Cost of Clay
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$140 $160 $180 $200 $220 $240 $260 $280
Cost per tonne
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$0.30 $0.40 $0.50 $0.60 $0.70
Cost per Kilogram ($)
Cost of Gas
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$10.00 $12.00 $14.00 $16.00 $18.00 $20.00
Price per tonne ($)
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$40.00 $50.00 $60.00 $70.00 $80.00
Price per tonne
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
25 30 35 40 45 50
Average Life of Asset (Years)
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$150.00 $200.00 $250.00 $300.00 $350.00
Cost per Tonne ($)
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
600 800 1,000 1,200
Average Quantity (litres per hour of operation)
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
250 300 350 400 450 500
Kilo litres per annum
Useage of Diesel
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$0.40 $0.50 $0.60 $0.70 $0.80 $0.90
Cost per Litre ($)
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
2,500 3,000 3,500 4,000 4,500 5,000 5,500
Average Running Requirement (Kilowatts per hour)
Power Useage
$2
NPAT - $ per annum (YIYO)
$1
Base Model
Millions
$0
($1)
$0.04 $0.05 $0.06 $0.07 $0.08 $0.09
Power Cost per Kilowatt Hour (average 24 hr.)
Cost of Power
Japan
The Philippines
10% tariff applies based on C.I.F. 10% Value Added Tax also applies. A pre-
shipment inspection is required if goods are valued at over US$500. (If this applies,
call SGS on 262 7200)
Indonesia
Import duty of 15% based on C.I.F. applies. Also Value Added Tax of 10%. A pre-
shipment inspection is required if goods are valued at over US$5000. (If this
applies call Surveyor Indonesia Australia on 900 411)
127 Please refer to the Consultant for Tariffs that may apply to other countries not listed
Customs tariffs are levied on a wide range of imported goods. These tariffs
provide protection for Australian manufacturers and producers. Tariff levels are
altered only after a review of the industry concerned has been carried out by the
Industries Assistance Commission (IAC). The IAC considers submissions from those
likely to be affected by a change in tariff.
In the case of Petemic and their technology, some tariff concessions may be
available, offsetting the costs of the importation of some of the processing
equipment and apparatus (i.e. capital set-up costs). However, it is not possible to
be too definitive without formal application, and accordingly the commercial
viability tests conducted in this Report assumes that no tariff concessions have
been made available to the Company.
It is assumed, for the purpose of viability analysis and testing, that all product
inputs and outputs required / generated by the Petemic process will be acquired
/ sold to local (domestic) markets.
Further, where goods have been sold to Australia at an export price less than
their normal value (which is determined as being the domestic price in the
country of origin) Anti-Dumping legislation provides for the imposition of a penal
duty in addition to that which would normally be payable. Similarly, a
comparable remedy, known as countervailing duty, applies where there has
been a subsidy, bounty, or other assistance paid in the country of export, which
has caused injury of threatened to injure or hinder the establishment of an
Australian industry.
As the outputs of the Petemic process are not subject to competition with
equivalent imported product, it has been assumed that the Federal
Governments anti-dumping legislation will not apply.
128 Acknowledgment is given to primary source for information in this sub-section to: Coopers & Lybrand,
Tax Facts and Figures 1988-89, Coopers & Lybrand Aust, 1988, Australia.
However, it should be noted that, in relation to impact upon the cash flow, any
expenditure incurred by a taxpayer in obtaining or seeking the grant of a patent,
registration of a copyright or design, or extension of the term of a patent or
design, is deductible to the extent that the expenditure was incurred.
The deduction may be allowable even though the taxpayer was unsuccessful in
obtaining the grant or extension, providing that the expenditure was incurred for
the purposes of producing assessable income.
This Analysis assumes that all deductibility of patents and liscencing of the
technology has been taken account of in earlier stages of the Project, i.e. during
the bench scale testing and pilot plant stages. It is, however, acknowledged that
some benefit of the patent (and subsequent deductibility) will be applicable
over the Commercialisation (and later) stage(s), however in the context of the
overall Project this is not anticipated to be significant in terms of impact on tax
payable.
Trade marks distinguish goods or services of a trader from those of other traders.
They can be in the form of a word, picture or symbol, or a combination of these.
In the case of Petemic Technology Pty Ltd, a distinguishing trademark symbol will
serve to differentiate the Company and its products - especially in the context of
its recycycling involvement, and the favourable image that this creates.
Registration of trade marks is obviously not compulsory, but has several benefits.
These benefits include:
Legal rights to exclusively control and use the trade mark for the goods or
services for which it was registered
129 Acknowledgment is given to primary source for information in this sub-section to: Australian
Government Publishing Service, Taxation, AGPS Press, 1991, Canberra
130 Primary source for this information is: AIPO Trademark Leaflets 1, 2, 3 & 4, Printed by AIPO Print Room,
March 1995.
Only distinctive marks, or marks that are capable of becoming distinctive, can be
registered. These could include; names represented in a distinctive manner, an
invented word, or a distinctive mark.
Trade mark registration differs from business name registration. A business name is
a name, style, title or designation under which a business is conducted, whereas
a trade mark is used to identify and distinguish goods or services of a business or
trader.
To apply for a trade mark an application form must be filled out and lodged.
Application forms are available from the Trade Marks Office. Applications are
examined in order of lodgment, and it is usually several months before the
application is processed. Applications are examined to determine whether they
meet the requirements of the Trade Marks Act. Results of the examination are
sent to the applicant.
7th Floor
280 Adelaide St
Qld 4000
Ph: (07) 864 8277
Specific elements of the Industry Innovation Program - 150 per cent Tax
Concession, Competitive Grants and Concessional Loans131 - are administered
by the Industry Research and Development Board132.
The Boards role is to help companies successfully enter local and export markets
by encouraging:
DITAC may have funds available with / through the TCFTA - the latter whom may
have funding money134 available for value added processed products. The
Discretionary Grants Scheme also provides grants for developing internationally
traded goods, systems or services, specifically targeted for Companies unable to
receive adequate benefit from the 150% research and development (R&D) tax
concession but seek R&D assistance for projects that would otherwise not
proceed. It is also specifically targeted to small start up companies wanting to
enter international markets and to industries involved in industry restructuring.
Projects can be:
" maximum grant is 50% of eligible project costs exceeding $50,000 (for the
purpose of salaries, outside contracted work. and purchase of equipment
used directly in the R&D and overheads).
Grants under this scheme are available for a maximum of three years covering
up to 90% of total eligible costs, for strategic research and development in
technologies which have widespread application in industry. Projects must have
at least one commercial partner and one public sector research body such as a
University or the CSIRO. The Company would therefore need to source a public
sector research body interested in, for example, waste manufacturing
technology and / or other manufacturing processes.
133 Refer Ms Alex Appleman and Mr Shane Campbell of DITAC (Ph 07-2315111)
134 There ore many highly desirable features of the Project which enhance prospects for a successful
result in obtaining funds from this source. Reference should be made to Mr Shane Campbell 07-
2315111
production and use of AMT in Australian Industry. Assistance is provided for the
development and use of:
Export Access
This program could be utilised for the purpose of proceeding to the development
of a Marketing or Business Plan.
market driven R&D in dynamic firms needing assistance but unable to gain
full financial benefit from the 150 per cent Tax Concession for R&D;
collaborative R&D activities, that are high risk but could provide extensive
benefit to Australia;
product/process design;
product documentation.
Loans will be made for a maximum period of six years from the date of the loan
agreement, with repayment commencing after 42 months.
Interest will begin to accrue three years from the date of the loan agreement. At
the time of writing, interest was being calculated daily at 40 per cent of the
Commonwealth Bank Loan Reference Rate.
The following major points relate to the taxation implications for Research and
Development, and have been incorporated into the financial analysis contained
in this Report:
The 150% tax concession (against income earned) for R&D is still available.
The definition of R&D expenditure basically applies up to but NOT
INCLUDING Marketing stage, including conducting Market research. That is,
R&D is only claimable until the Marketing stage unless the product is being
in some way modified or further improved. The concession is subject to, inter
alia:
The Company should also be aware that they may have the opportunity to
directly employ a graduate through the National Teaching Co. scheme
specifically for the research and development of new products.
This Plant, sold to an undisclosed buyer, was reportedly sold for an amount in the
region of $300,000, with the auctioneers originally anticipating sale value of at
least $250,000 piecemeal139. Several of the major plant items are similar to that
contemplated for the Petemic process. The Newspaper Clipping below outlines
the type of plant and equipment sold:
According to auctioneer Scott Bendall, the above Pilot Plant was said to have
been originally constructed for a cost of approximately A$6.0m.
139 These amounts were provided by MGS Turners Auctions (c/- Mr Scott Bendall).
Whilst the above costings are indicative only at best, it nevertheless demonstrates
the significant savings that might be gained from purchasing used plant and
equipment.
This Report, however, assumes that all equipment will be purchased new.
A full review of the licensing aspects of the Petemic Technology is provided in the
Attachment: Licensing, as prepared by Attorneys-at-Law Collier, Shannon, Rill &
Scott.
The following is an excerpt from this document, taken from the Executive
Summary:
Introduction
This section of the pre-feasibility study for Petemic Technology Pty Ltd (Petemic)
focuses on the issue of licensing the technology which forms the basis of
Petemics waste recycling process and apparatus (the Petemic Technology or
the Technology). The remainder of this introduction provides a summary of the
methodology and findings:
On the assumption that Petemic will obtain patent protection in connection with
its Technology, it is concluded that the Petemic Technology embodies suitable
intellectual property rights which can be the subject of a technology transfer
license.
Also provided is a summary of contacts with various clients and others in the
environmental engineering industry to obtain an informal and preliminary
indication as to the prospects for licensing the Petemic Technology. Based on
these contacts it appears that the Petemic Technology is potentially licensable,
provided it can satisfy the relevant regulatory requirements and become a viable
alternative to competing processes and end products. However, the recycling
process developed by Petemic would have to compete with the alternative of
relatively inexpensive landfill disposal and strong existing markets for recyclable
products. As such, several contacts concluded that the demand for the Petemic
Technology is uncertain.
The need to protect the Petemic Technology through a carefully negotiated and
properly drafted license agreement is emphasised. Methods for formulating a
commercially viable royalty rate are suggested. Also provided is a brief analysis of
Petemics potential areas of exposure.
It should be noted that much of the data and material presented in this Final
Report for the Feasibility Study, including financial data, has been acquired from
a number of sources, including Petemic Technology Pty Ltd management. This
information has been made available to the consultant for analysis. Our report is
prepared on the basis that full disclosure of all information and facts which may
affect our report and / or advice has been made, and therefore the Consultant
cannot accept any liability or responsibility whatsoever for the report and / or
any advice contained therein unless such full disclosure has been made.
In accordance with the normal practice of Gary O Garner & Associates, I confirm
that this report is confidential to, and solely for use of, the Directors of Petemic
Technology Pty Ltd, subject to its provision to the Department of Business Industry
& Regional Development (as instructed). No responsibility is accepted to any
third party who relies on the whole or any part of our report.
APPENDICES
JOB TITLE:
GENERAL MANAGER
JOB PURPOSE: ACHIEVES COMPANY OBJECTIVES
by
developing business opportunities; meeting sales quotas; managing staff;
providing leadership; implementing Board directives.
ESSENTIAL JOB RESULTS:
% of % of
Time Time
1. PROVIDES LEADERSHIP & VISION 6. MEETS SALES OBJECTIVES
by by
communicating Company objectives establishing sales quotas; monitoring
and assisting the Board in design of demographic sales results; applying
Company direction. marketing research; defining strategies.
2. ENSURES COMPLIANCE 7. MAINTAINS STAFF JOB RESULTS
GOVERNMENT REGULATIONS by
by counselling and disciplining employees;
maintaining environmental monitoring planning, monitoring, and appraising job
files; coordinating efforts with all results
Company departments.
3. MAINTAINS STAFF 8. MAINTAINS PROFESSIONAL AND
by TECHNICAL KNOWLEDGE
recruiting, selecting, orienting, and by
training employees. attending educational workshops;
reviewing professional networks;
participating in professional societies.
4. DEVELOPS TRUST AND OTHER 9. ACHIEVES FINANCIAL OBJECTIVES
NONCORE FEE INCOME BUSINESS by
by ensuring preparation of the annual
publicizing the Companys service budget; overview of scheduling
capabilities. expenditures; analyzing variances;
initiating corrective actions.
5. GENERATES BUSINESS 10. CONTRIBUTES TO TEAM EFFORT
by by
meeting potential customers in the accomplishing related results as
business (private and public sector) needed.
communities.
140 Job descriptions have been, in the main, adapted from source material: Plachy RJ, Plachy SJ,
Results-Orientated Job Descriptions, Amacon (1993)
JOB TITLE:
ADMINISTRATION MANAGER
JOB PURPOSE: PROVIDES FINANCIAL INFORMATION TO MANAGEMENT
by
researching and analyzing accounting data; preparing reports;
Implementing administrative systems, procedures, and policies, and
monitoring administrative projects.
JOB TITLE:
JOB TITLE:
SECRETARY
JOB PURPOSE: ENHANCES (COMPANY) EFFECTIVENESS
by
providing information-management support.
JOB TITLE:
PRODUCTION MANAGER
JOB PURPOSE: PRODUCES PRODUCTS
by
Supervising staff and operations; creating new designs and modifications;
establishing and enforcing quality standards; testing materials and product.
JOB TITLE:
JOB TITLE:
JOB TITLE:
LOADER OPERATOR
JOB PURPOSE: TRANSPORTS AND MANOUEVRES PRODUCT OR MATERIAL
by
operating a Loader.
JOB TITLE:
JOB TITLE:
JOB PURPOSE: FORMS PRODUCT and TRANSPORTS AND MANOUEVRES PRODUCT OR MATERIAL
by
operating pulversiser and extruding equipment; operating Loader
JOB TITLE:
JOB TITLE:
GENERAL HAND
JOB PURPOSE: MAINTAINS PRODUCTION AND QUALITY
by
ensuring operation of machinery and mechanical equipment; sorting raw
material and other product; attending to general factory maintenance.
JOB TITLE:
25 Septemmber 1995
Conveyor #1 Conveyor #2 Conveyor #3 Conveyor #4 Conveyor #5
BINS
BUILDERS RUBBLE Building (Product for Sale) Plastics Small Ferrous BINS
HOUSEHOLD GARBAGE Rubble (Oval) Metal Separator (Product for Sale)
Crusher MIXER & BINDER STAGE
CLAY
INDUSTRIAL WASTE
(Non-Toxic)
PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT
Pre-Heater
(600deg.C)
BINS
(Product for Sale)
WASTE SELECTION ROAD BASE (Crushed Building Rubble) WASTE REDUCING MEANS
Appendix C -
#1 Hopper Sorter
25 Septemmber 1995
Screen Screen
BINS
BUILDERS RUBBLE Building (Product for Sale) Plastics Small Ferrous BINS
HOUSEHOLD GARBAGE Rubble (Oval) METAL Metal Separator (Product for Sale)
Petty Patent)
Appendix G - Acknowledgments
Acknowledgment is hereby given to technical adviser and consultant Mr John
Mackenzie of Sloane, Cook & King Pty Ltd, who have undertaken the majority of
market analysis and environmental considerations contained in this Report.
Mr Peter Stone of Chemquip Pty Ltd (Brisbane) has provided various input in
relation to technical engineering matters (also, refer various Attachments to this
Report completed by Chemquip Pty Ltd).
Coller, Shannon, Rill & Scott (Sydney) have provided the complete review of
licensing requirements.
5. Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in
Sydney". in Achievements and Challenges; Proceedings of the 2nd National
Hazardous & Solid Waste Convention, Melbourne. Australian Water & Wastewater
Association and Waste Management Association of Australia; Artarmon NSW.
8. Graham, R.A., Sharpley, G.E., & Thorpe, J.L. (1994), "Environmental Audits and
Management Planning for Canberra's Landfills" in Achievements and Challenges;
Proceedings of the 2nd National Hazardous & Solid Waste Convention,
Melbourne, Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW.
13. Skinner, J.H. (1975), "Demonstration of Systems for the Recovery of Materials and
from Solid Wastes" Resource Recovery and Utilisation, ASTM STP 592, American
Society for Testing and Materials.
15. Tasmanian Government (1994), "Solid Waste Plan" Reported at the Local
Government Conference - Waste.
16. Victorian Government (1994), "The Resource and Recovery Council; Grant
Programs 1993-94. "Reported at the Local Government Conference - Waste.
17. Wang, F.S., Richardson, A.J. & Roddick, F.A. (1994), "Swim: an Interactive Model for
Solid Waste Integrated Management: in Achievements and Challenges;
Proceedings of the 2nd National Hazardous & Solid Waste Convention,
Melbourne. Australian Water & Wastewater Association and Waste
Management Association of Australia; Artarmon NSW.
18. Agriculture and Resource Management Council of Australia and New Zealand
(1994) Guidelines for Sewage Systems. Acceptance of Trade Waste (Industrial
Waste). Canberra
19. Australian Environmental Council, National Health and Medical Research Council
(1986) National Guidelines for Control of Emission of Air Pollutants from New
Stationary Sources - Australian Government Publishing Service, Canberra
20. Australian and New Zealand Environment and Conservation Council (1992)
Australian Water Quality Guidelines for Fresh and Marine Waters. Canberra
21. Caboolture Shire Council (1993) Procedures for the Submission of Consent
Applications within the Caboolture Shire.
27. Working Group Environmental Auditor Certification (1995), Outline Proposal for
Environmental Auditor Certification System. Artarmon NSW
28. Working Group Environmental Auditor Certification (1995), Progress Update - April
1995. Artarmon NSW
ATTACHMENTS