it always helps to read ..
page 27 ..
2013 Update
During 2013, we processed approximately 2 million pounds (954 tons) of waste plastic into fuel, as compared to approximately 1.7 million pounds (845 tons) of waste plastic. This represented an increase of 12% of plastic processed year over year. In 2013, we produced approximately 345,000 gallons of fuel, as compared to approximately 317,000 gallons of fuel in 2012, an increase of 9% year over year.
During 2013 prior to shutting down production in December, we were able to bring our third processor online in July. This processor, which was designed based on the significant testing and data obtained from operating Processors #1 and #2 showed significant improvements in the processing abilities over its predecessor. During the second half of the year, Processor #3 was in operation, however, we experienced more than anticipated downtime. The downtime was driven by some of the following items:
●
Organizational Structure – Our previous staffing model did not allow for enough comprehensive evaluation of the processors’ performance and we have decided that the addition of a chemical engineer to the operating team should allow for continuous optimal performance of the processor, as this addition will be able to supplement the knowledge of the current teams in ensuring proper performance;
●
Hardware optimization– As our processor and technology are still continuing to evolve, we continue to need to tweak the processor and the components in order to ensure that we are getting the optimal performance from all of the components of the processor. From time to time, when we identify components that do not perform as we had planned, we are required to shut the processor down to replace the part, potentially perform additional testing on that specific piece of equipment and ultimately replace the component with a better version of the component to increase productivity. In several instances, we have designed technology that is unique to our process to reduce component costs. After the technology is tested, we seek vendors who can implement our technology into their device. The final result has been a device manufactured by a vendor at a fraction of the cost an “off the shelf” general-purpose device;
We are continuously striving to maximize the uptime of the processor and minimize the downtime by any of the aforementioned causes. Our management team in continuously evaluating the operating time of each processor and all decisions we make with regard to the timing of and operation of the processor are directed at the long term view of operating the processor in a safe and efficient manner while maximizing our revenues.
We had to shut down its production in the fourth quarter of 2013. Management estimates bringing the facility back into full production will require the expenditure of between $175,000 and $200,000. The plant is presently testing and evaluating the feedstock from potential purchasers of processors. At June 3, 2014, we lacked the working capital or access to bank credit to restore full production. The 2013 shut downs was driven by the following items.
●
Unseasonably cold temperatures in the winter of 2013/2014 . The temperature in winter 2013 was far below what we had ever operated through, with some periods sustaining below zero Fahrenheit temperatures. This low temperature caused many local issues with off-the-shelf diesel freezing and gelling. Our Fuel Oil #6 meets ASTM D396 fuel standards which include a pour point (or freezing point) of -6 C pour point (21° F). The temperature often dropped below 5°F and at some periods below 0°F. These unseasonably cold temperatures and high winds froze our fuel and in some places our new water lines. We experimented with pour point depressants used in diesel for artic temperatures. After testing and verifying compatibility and functionality, we secured a good pour point depressant that will allow our fuel to flow at temperatures down to -30°C or -22°F. Subsequently to the weather damage and condenser failure (see below), we idled our processors in late December 2013. We also temporarily reduced our operation and fabrication work force in January 2014. We repaired temperature damage from the 2013/2014 winter in the spring of 2014. We replaced the new condensers on Processor #3 with condensers that have historically never failed in the process. We are adding equipment to our facility support systems to inject additives for lubricity and pour point to meet off road diesel use. The additives we tested performed well in off-road diesel equipment and the pour depressant is tested to work in extremely cold temperatures.
●
The failure of new condensers installed throughout the plant of 2013/2014 . We use a device called a condenser to cool hot liquids or heat cold liquids. Numerous condensers are located throughout a processor and plant. Our legacy condensers were performing well over the past few years however there were different sizes and manufacturers used. This posed lead time problems and higher costs when sourcing parts for future sales. In the spring of 2013, we standardized, acquired and installed new condensers for cooling to standardize all condensers across the factory. We also designed, procured, and installed central plant support systems for our processors including: centralized water chilling and storage, centralized gas compression for collect, compress and distribute off-gas generated by processors, centralized hot oil system for cooling high temperature fluids, and developed a site control system to monitor all of the auxiliary plant support systems. In late December 2013, the new condensers installed across the plant and in the processors began to fail. Over a six week period, all the new condensers failed in operation. Upon reviewing the failure in the condenser, we found the stitch welding used to manufacture them was defective. Management believes we have developed a comprehensive front-line QC procedure to ensure plastic is not littered tools, steel or bad fillers. All new vendor equipment must be tested on our R&D system, Processor#1, before deploying on other processors. This will mitigate the risk of poor quality components from being sources or installed without significant testing.
page 27 ..
2013 Update
During 2013, we processed approximately 2 million pounds (954 tons) of waste plastic into fuel, as compared to approximately 1.7 million pounds (845 tons) of waste plastic. This represented an increase of 12% of plastic processed year over year. In 2013, we produced approximately 345,000 gallons of fuel, as compared to approximately 317,000 gallons of fuel in 2012, an increase of 9% year over year.
During 2013 prior to shutting down production in December, we were able to bring our third processor online in July. This processor, which was designed based on the significant testing and data obtained from operating Processors #1 and #2 showed significant improvements in the processing abilities over its predecessor. During the second half of the year, Processor #3 was in operation, however, we experienced more than anticipated downtime. The downtime was driven by some of the following items:
●
Organizational Structure – Our previous staffing model did not allow for enough comprehensive evaluation of the processors’ performance and we have decided that the addition of a chemical engineer to the operating team should allow for continuous optimal performance of the processor, as this addition will be able to supplement the knowledge of the current teams in ensuring proper performance;
●
Hardware optimization– As our processor and technology are still continuing to evolve, we continue to need to tweak the processor and the components in order to ensure that we are getting the optimal performance from all of the components of the processor. From time to time, when we identify components that do not perform as we had planned, we are required to shut the processor down to replace the part, potentially perform additional testing on that specific piece of equipment and ultimately replace the component with a better version of the component to increase productivity. In several instances, we have designed technology that is unique to our process to reduce component costs. After the technology is tested, we seek vendors who can implement our technology into their device. The final result has been a device manufactured by a vendor at a fraction of the cost an “off the shelf” general-purpose device;
We are continuously striving to maximize the uptime of the processor and minimize the downtime by any of the aforementioned causes. Our management team in continuously evaluating the operating time of each processor and all decisions we make with regard to the timing of and operation of the processor are directed at the long term view of operating the processor in a safe and efficient manner while maximizing our revenues.
We had to shut down its production in the fourth quarter of 2013. Management estimates bringing the facility back into full production will require the expenditure of between $175,000 and $200,000. The plant is presently testing and evaluating the feedstock from potential purchasers of processors. At June 3, 2014, we lacked the working capital or access to bank credit to restore full production. The 2013 shut downs was driven by the following items.
●
Unseasonably cold temperatures in the winter of 2013/2014 . The temperature in winter 2013 was far below what we had ever operated through, with some periods sustaining below zero Fahrenheit temperatures. This low temperature caused many local issues with off-the-shelf diesel freezing and gelling. Our Fuel Oil #6 meets ASTM D396 fuel standards which include a pour point (or freezing point) of -6 C pour point (21° F). The temperature often dropped below 5°F and at some periods below 0°F. These unseasonably cold temperatures and high winds froze our fuel and in some places our new water lines. We experimented with pour point depressants used in diesel for artic temperatures. After testing and verifying compatibility and functionality, we secured a good pour point depressant that will allow our fuel to flow at temperatures down to -30°C or -22°F. Subsequently to the weather damage and condenser failure (see below), we idled our processors in late December 2013. We also temporarily reduced our operation and fabrication work force in January 2014. We repaired temperature damage from the 2013/2014 winter in the spring of 2014. We replaced the new condensers on Processor #3 with condensers that have historically never failed in the process. We are adding equipment to our facility support systems to inject additives for lubricity and pour point to meet off road diesel use. The additives we tested performed well in off-road diesel equipment and the pour depressant is tested to work in extremely cold temperatures.
●
The failure of new condensers installed throughout the plant of 2013/2014 . We use a device called a condenser to cool hot liquids or heat cold liquids. Numerous condensers are located throughout a processor and plant. Our legacy condensers were performing well over the past few years however there were different sizes and manufacturers used. This posed lead time problems and higher costs when sourcing parts for future sales. In the spring of 2013, we standardized, acquired and installed new condensers for cooling to standardize all condensers across the factory. We also designed, procured, and installed central plant support systems for our processors including: centralized water chilling and storage, centralized gas compression for collect, compress and distribute off-gas generated by processors, centralized hot oil system for cooling high temperature fluids, and developed a site control system to monitor all of the auxiliary plant support systems. In late December 2013, the new condensers installed across the plant and in the processors began to fail. Over a six week period, all the new condensers failed in operation. Upon reviewing the failure in the condenser, we found the stitch welding used to manufacture them was defective. Management believes we have developed a comprehensive front-line QC procedure to ensure plastic is not littered tools, steel or bad fillers. All new vendor equipment must be tested on our R&D system, Processor#1, before deploying on other processors. This will mitigate the risk of poor quality components from being sources or installed without significant testing.
