Posted On: 03/19/2014 10:25:43 AM
Post# of 43066
My take on the new business plan and Madison County's inability to send ag platic waste to JBI any more:
JBI realized that the processor makes the most economical sense for an entity that can provide sorted, relatively clean, pre-processed plastic from their normal business practices. A third party cannot make an economical business case for collecting plastic from third parties and processing it themselves.
So now JBI is selling machines to those entities that can use them. Going-in asking price may be $8-9 million, but until a processor is actually sold we will not really know what they can be sold for. My guess is that it will be more like $5 million.
I think they want to sell them in pairs because that is the only way continuous up time can be guaranteed. Too much time is required for maintenance, so stagger that between two machines.
JBI is no longer in the business of trying to make business model #1 work. Madison County, even if they got surrounding counties involved, does not have the amount of plastic required, or the means to pre-sort and pre-process it, required to buy machines themselves. So they are stuck with their waste plastic problem until they can ship it to some other entity that might be in a position to buy JBI processors and process plastic from outside sources in addition to their own.
The fairy tale of readily available plastic waste is shattered. Their is lots and lots of waste plastic, but most of it is not available for processing. Just like all the microscopic waste plastic in the ocean gyres.
JBI will stay in business. But it is hard to predict how easily they can sell processors.
Another guess: Half a dozen a year. And I think I'm probably being generous with that prediction. There is a lot of competition for technology that is borderline economical.
JBI realized that the processor makes the most economical sense for an entity that can provide sorted, relatively clean, pre-processed plastic from their normal business practices. A third party cannot make an economical business case for collecting plastic from third parties and processing it themselves.
So now JBI is selling machines to those entities that can use them. Going-in asking price may be $8-9 million, but until a processor is actually sold we will not really know what they can be sold for. My guess is that it will be more like $5 million.
I think they want to sell them in pairs because that is the only way continuous up time can be guaranteed. Too much time is required for maintenance, so stagger that between two machines.
JBI is no longer in the business of trying to make business model #1 work. Madison County, even if they got surrounding counties involved, does not have the amount of plastic required, or the means to pre-sort and pre-process it, required to buy machines themselves. So they are stuck with their waste plastic problem until they can ship it to some other entity that might be in a position to buy JBI processors and process plastic from outside sources in addition to their own.
The fairy tale of readily available plastic waste is shattered. Their is lots and lots of waste plastic, but most of it is not available for processing. Just like all the microscopic waste plastic in the ocean gyres.
JBI will stay in business. But it is hard to predict how easily they can sell processors.
Another guess: Half a dozen a year. And I think I'm probably being generous with that prediction. There is a lot of competition for technology that is borderline economical.
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