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Developing the Feasibility
of Bioprocessing Projects
through Multiple Revenue
Streams
John Lockhart BPA
Stephen Cutting Aurecon
22 November 2017
2
The development of Bioprocessing
Australia’s Mackay Bioprocessing
Facility will deliver new integrated
agribusinesses and processing
precinct into Mackay, that offers
economic, export and community
benefits.
Creating an agribusiness future
Project Overview
3
The objective of Bioprocessing
Australia’s Central QLD
Bioprocessing Plant
project is to commission a
nominal 2,000 - 6000 tonnes
per annum yeast production
facility in Central Queensland.
Products and Export
4
• The project scope includes developing oilseed
processing facilities to produce vegetable oils
and oilseed meals for animal feed revenue
streams.
• Vegetable oils and tallow will feed a biodiesel
plant to generate revenue from QLD’s mandated
fuel market, plus producing glycerine .
• Glycerine provides the feedstock for Torsel
yeast production, currently sold into export
animal nutrition markets.
• Sugar feedstocks will produce high nucleotide
yeast products for additional revenues.
• Competitive advantage is that established
products are to be sold into existing markets,
with supply and off-take agreements able to be
established in long term integrated supply with
local farmers.
Multiple Revenue Streams
5
This project includes value
adding local agribusinesses to
produce oilseed meal for the
animal feed industry, a biodiesel
to improve transport emissions,
and processing glycerine and
sugar feedstocks to process
high quality non-GMO yeast
products for animal feeds to
replace hormones, stimulate
growth and add protein.
Value Add
6
Canegrowers are looking to
venture into multi-cropping,
achieve improved ground cover
to reduce runoff to the GBR, and
develop new food and feed
markets that are integrated into
the agri-business operations in
the Mackay region.
Step Change for Agribusinesses
7
• Existing Cogeneration plants offer
considerable capital savings to
establish the integrated
processing modules.
• Site lease, steam, power, water and
effluent treatment costs will be
deferred to OPEX costs, and be
charged proportionally to
production ramp up
Energy Park Synergies
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This project is driven by a need to increase non-GMO yeast production to
capitalise on expanding domestic and export animal feed markets for:
TorSel® Yeast
• TorSel contains 33% more organic selenium than competitor products
• Sold in levels of 4000ppm (actual level is much higher)
• Proven performer in livestock
• Selenium is added to all feed globally
High nucleotide yeast (HNY)
• Used as a natural flavour and flavour enhancer across the food industry.
• Used in feed as a flavour, source of nucleotides, protein and prebiotic.
Autolysed yeast (AY)
• Used as high protein and palatant – similar to fishmeal
Market Led Project
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Research and Development Assistance
• This project will develop the previous demonstration plant technologies into full scale
production of yeast
• The project also integrates four separate value chains into a single operating entity, on
an existing energy park, using technologies that have not been combined together
before in this configuration.
• The project will qualify for elements of the Federal Government’s R&D Tax Incentive
Scheme and other direct contributions to commercialise developing technologies
10
Project Development – BPA MBPF Integrated Site Layout
Yeast Processing Plant
Oil Seed Processing Plant
Biodiesel/ Glycerine Processing Plant
Utilities
Weighbridge
Glycerine, Tallow Import Facilities
Oil Seed MealAnimal Feed Ingredients
11
Oil Seed Supply Chain – Central QLD Agriculture Areas
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Integrated Logistics with existing agriculture,
mining and existing road, rail and port facilities
13
Import/ Export/ Logistics Requirements
Imports
• Glycerine
• Methanol
• Selenium
• Process
equipment
Export
• Torsel Yeast
• HNY Yeast
QLD Distribution
• Biodiesel
• Animal feeds
14
Project Development - Staged Capital Plan• In order to increase the capital efficiency of this project, it is proposed to stage the
project to match the availability of oil seeds in the Mackay districts, as local cane farmers grow soybean and sunflower plants as sugar cane fallow crops. There is also opportunity to increase yeast production progressively if feedstocks can be supplemented from adjacent oilseed production areas in Clermont, Capella, Emerald and Proserpine.
• Stage 1: It is envisaged that Stage 1 of the project will focus on establishing the yeast production equipment, that can produce animal feed products from existing sugar solutions from Racecourse Sugar Mill.
• Stage 2: will be to establish oil seed processing capacity to make vegetable oils, oil seed meals and biodiesel and glycerine feedstocks.
• Stage 3: The next stage is to ramp up the Bioprocessing facility capacity to match the agronomy, harvesting and year round supply potential of Central QLD oil seeds, feedlot meal markets, biodiesel sales and yeast market opportunities.
• An initial injection of seed capital from the Federal ‘Developing Northern Australia’ programs or Queensland State Advance QLD or Biofuels programs, would assist Bioprocessing Australia to bring forward investment in this project.
• This would enable quick gains to kick-off the initial R&D trials and engineering studies to establish the optimum processing configurations, plant and equipment designs and logistics systems for a district wide integrated industry.
• It would also enable site construction to commence once planning and approvals, lease arrangements, capital funding and detailed designs are completed.
STAGE 1 Yeast production from imported glycerine and sugar solutions
STAGE 2 Yeast production from Integrated local supply
STAGE 3 Incremental expansion to match yeast, biodieseland soy meal markets uptake
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Planning, Statutory, Legal, Compliance
Requirements and Approvals
The FS has investigated the statutory environmental and planning constraints of the proposed site and the statutory approvals required for the proposed Bioprocessing Plant. The proposed plant will require local and State environmental and planning approvals under the Planning Act 2016 (Qld), Environmental Protection Act 1994 (Qld) and the Workplace Health and Safety Act 2011 (Qld).Pre-lodgement advice was undertaken with Mackay Regional Council and the relevant State Government agencies.
The key matters raised by the agencies were:• Potential impact on the amenity (visual, noise and odour) of the local area• Demand on existing utilities (water and power)• Stormwater drainage design• Details of air and wastewater emissions • Access arrangements in particular with the future Mackay Ring Road design
All pre-lodgement meetings were positive and no major areas of non-compliance were identified by the project team or the approval agencies. Approvals are achievable within a 3-5 month timeframe.
• Mackay Regional Council
• Department of Local Government, Infrastructure and Planning
• Department of Transport and Main Roads
• Ergon Energy
• Workplace Health and Safety Queensland
• Department of Environment and Heritage Protection
16
Feasibility Study
Key Stakeholder Discussions
Positive discussions have been held with the following project stakeholders:
• QLD Department of State Development• Regional Developments Australia• GW3 Mackay Isaac Whitsunday economic development group• Mackay Regional Council• Mackay Sugar Limited• Canegrowers Association and leading cane farmers• Department of Infrastructure, Local Government and Planning• Queensland Transport and Main Roads• Wilmar Logistics• Biofuels Association Australia• North Queensland Bulk Ports• Leichardt Holdings Feedlot• Department Agriculture and Fisheries• Mackay Area Productivity Services (MAPS)• Agritechnology• Thomas Borthwick & Sons Meatworks• Farmicist• HPDezign• Suncoast Renewables
The resounding feedback is that the project is ‘COMPLEMENTARY’ for all stakeholders and adds value at all levels
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Key opportunities for Bioprocessing Facility
• Economies of scale with labour and logistics with larger plant capacity
• Land tenure savings with site lease
• State significant project support
• ‘First in’ Queensland opportunities for funding
• Agri-business crop cycles could be blended across Mackay, western
districts and other regions
• Plant unit size selected to process in campaign runs for various products.
• All process units are able to increase production by operating for more
days in a year
• Potential to co-locate with other food/ feed technologies that use same
utilities and balance of plant
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Detailed Design, Tendering, Procurement and Evaluation
• Detailed design for construction
• Classification of capital cost estimate to AACE Class 2 level,
• P&ID (piping and instrumentation drawing) detailed development, including full instruments and control loop links,
• PFD (detailed process flow diagram) with nominal and maximum process flow balances.
• Intelligent 3D design and 4th dimensional database development of all facility assets
• Asset identification and database of key attributes to handover to CMMS
• Engineering Information system for operational readiness handover
• Tendering
• Procurement Assistance
• Conduct tender evaluation
• Award contracts
Project Execution
• Site project management of construction contract
• Contract and Procurement administration
• Interface to local stakeholders
• Operational readiness and Training
• Commissioning
Tasks to be undertaken in Detailed Design
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Feasibility Study Conclusions• Export markets have been firmly established for Torsel yeast products from the Borenore plant,
but opportunities exist to develop further yeast products with sugar solutions
• Revenue streams from yeast, soymeal, sunflower meal and biodiesel are all entering growth
cycles in market over the next 5 years, so potential exists for increasing sale prices
• Ongoing stakeholder discussions may provide further opportunities to grow additional products,
for increased volume or value-add to boost revenue
• Multiple scope options have been analysed, considering multiple production schedules
• Reductions in the Capital and Operating cost base can be made if lower capacities and less
flexibility and risk management features are employed
• Staging of Capex spend aimed to fast-track yeast revenues for early Cash Flow.
• Major long lead Capex items selected with latent capacity for future production flexibility
• Positive NPV/ Cashflow possible in 7 to 12 year period from start of construction on conservative
base case model
• Further improvements in NPV/ IRR are achievable for different assumptions and parameters
• Opportunities to grow additional revenue streams by increasing feedstock processing and
blending of feedstock products
• Preliminary risk assessments undertaken, with technology and market risks the major areas
• Timing of project development is good, with considerable government promotion for Develop
Northern Australia and Bio futures programs
• Strong community support with integration of existing businesses
• FS financial results show long term returns, even for increased CAPEX.
• There are risks across all revenue streams, but potential upside if markets develop as anticipated
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