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Clean PowerCompany Overview
Company Overview1
Contents
Products2
Industry Outlook3
Company Outlook4
Competitive Landscape5
Management Team6
Company Overview1
Contents
Products2
Industry Outlook3
Company Outlook4
Competitive Landscape5
Management Team6
Company Overview
Clean Power Concepts Inc., through its subsidiary, General Bio Energy Inc., operates an integrated commercial oilseed crushing, bio-diesel refinery, environmental lubricants manufacturing and bottling, and nutraceutical and food processing plant in Chicago, Illinois, USA.
The company provides biofuel and biofuel additives, such as dust suppressants; environmental lubricants used for cutting oil, chain oil, general all purpose lubricant, gun oil, and penetrating oil; and environmental fuel line conditioners under the Clean Power Environmental Lubricants trade name.
It also manufactures, distributes, and retails essential oils, such as camelina, canola, flax, and hemp in various formats, including capsules, gourmet cooking oils, and skin care formulations under the General Bio Health and Spirit of Health trade names. In addition, it offers meal and protein related products for agricultural and aquaculture feedstock.
Key Facts
Summary
Trading Data
President & CEO John Smith, MBA
Secretary & Treasurer Adam Brown
Full Time Employees 8
Principal Place of Business 1234 Main StreetChicago, IllinoisUSA
Telephone 213.539.9739
Fax 213.539.3948
Ticker/Symbol CPCO.PK
Last Trade 0.15
52wk Range 0.04 - 0.52
Shares Outstanding 240.08million
Volume 181,166
Avg Vol (3m) 13,119,800
Market Cap 41.29 million
Financial Overview
For the three months ended 31 July 2010, Clean Power Concepts Inc's revenues totaled $197K. Net loss totaled $271K.
Summary Financial Strength
Profitability Management Effectiveness
Source: Reuters Fundamentals, February 5, 2011
Quick Ratio 0.11
Current Ratio 0.19
LT Debt/Equity (0.19)
Total Debt Equity (0.62)
Gross Margin % 34,87
Operating Margin % (145.97)
Net Profit Margin % (160.29)
Interest Coverage (7.84)
Return on Equity % 59.75
Return on Assets % (144.12)
Return on Investment % (66.15)
In every sense of the word GBE is operating an above-ground oil well. The oil is
extracted from a renewable, easily obtainable above-ground source: abundant canola seed.
Company Overview1
Contents
Products2
Industry Outlook3
Company Strategy4
Competitive Landscape5
Management Team6
ProductsClean Power
Concepts
Bio-Oil
Supplements and Nutraceuticals
Animal Nutrition
Bio Fuel
Clean Power’s markets and overall revenue opportunities are substantial, long term and global in scale.
Products: Food
On December 28th 2010, Clean Power Concepts entered into an open-ended long-term letter of intent with the Chongqing Grain Group of Chong Qing, China. Under the agreement, Chongqing has committed to purchasing up to 3,000 MT per month of crude degummed canola oil from Clean Power’s operating subsidiary and ship the oil to China where it will be refined into ‘Refined Bleached and Deodorized’ oilthat is table ready.
The refined oil will then be marketed under Chongqing’s ‘Red Dragon Fly Oil’ cooking oil brand, which is well established in theChong Qing Region. At current prices, this agreement has the potential to generate sales of at least of $400 million US over theten-year minimum period, beginning with an estimated $40M in revenue in 2011.
Canola one of two cultivars of rapeseed or Brassica campestris. Canola seeds are used to produce edible oil which has lower levels of erucic acid than traditional rapeseed oils .
The price of canola oil is indexed to contracts on the Chicago Board of Trade (‘CBOT’) soy bean futures market and in winter tends to trade at a premium and in summer at par.
In 2007 worldwide production of canola was 51 million metric tonnes and production for 2010 is estimated to be 60 million metric tonnes of seed and 24 million metric tonnes of canola oil.
Supplements and Nutraceuticals
Products: Food
Other products in this segment include the ‘Spirit of Health’ brand which offers a line of natural health supplements made from essential camelina oil, an oilseed with reduced input requirements and well suited to marginalize soils. Camelina is an extremely high source of omega 3, omega 6 and vitamin E, in quantities rivaling salmon oil.
Supplements and Nutraceuticals
Developed products include Flax Oil Omega 3 Capsules, Flax Meal Capsules, Gourmet Camelina Food Oil, Camelina Oil Omega 3, 6, and Vitamin E capsules.
Products: Animal Nutrition
CPC holds a key patent for a vegetable protein-based fish food. This aqua-supplement
is a byproduct of grain processing and aides fish farm owners in raising healthy,
protein rich fish for human consumption.
This same patented process can also be used to produce high quality pet foods, a $20
billion market in North America alone.
Fish Farming
Pet Food
Products: Animal Nutrition
Once canola seed is crushed, the remaining "meal" is prized as a high quality, high
protein livestock feed. The meal is widely used as a component in hog, poultry and
cattle rations.
Live stock
Studies have shown that using canola meal instead of soybean or cottonseed meal resulted in 2.2 pounds per day more milk production from every cow fed the canola meal.
Products: Petro-substitues
Biodiesel is an alternative fuel made from renewable sources that is non-toxic, biodegradable and can be used in regular diesel engines with little or no modification. Canola biodiesel is a useful option because nothing goes to waste. Leftover glycerin from canola oil can be used in skin creams, soaps and other personal care products. Crushed seeds are used in animal feed, providing a great source of protein.
Biodiesel produced domestically can reduce dependence on foreign oil and put money back into the rural economy. Biodiesel produced from canola can be grown over and over, unlike non-renewable petroleum.
Biodiesel is also much more environment-friendly than petroleum diesel, lowering greenhouse gas emissions by up to 78% and not having a catastrophic effect if spilled. Canola oil is one of the most effective and efficient sources for biodiesel with excellent cold-flow properties. In addition, canola seed yields about 44 percent oil when crushed compared to only 18 percent for soybeans, the most common biodiesel feedstock.
Products: Petro-substitues
Clean Power Concept is a leading green alternative for petro-based automotive products. The Clean Power brand, an environmentally friendly canola based product line that replaces petroleum-based fuels and additives in cars and trucks.
Biodiesel Clean burning, non-toxic and biodegradable renewable fuel
Penetrating Oil Capable of penetrating one-millionth inch spaces, helps to remove paint, dissolve rust, lubricate, clean and prevent rust without harming the virgin metal.
Diesel Fuel Conditioner Formulated to provide significant fuel savings and additional power to diesel engines in highway tractors, trucks, farm machinery and industrial heavy equipment. Recent certification testing by Intertek confirmed CPC findings of a 27% increase in the lubricity of ULSD (ultra low sulfur diesel) that increases overall engine efficiency.
• Significantly reduces carbon dioxide emissions by 63%• Reduces emissions of particulate matter by 50%• Reduces emissions of unburned hydrocarbons by 67%• Reduces carbon monoxide emissions by 48%• Free of sulfur and benzene
The Clean Power Brand of Bio-Fuels
General Bio Energy, is the industry leader in bio-fuels, renewable energy, and eco-friendly bio-diesel products.General Bio Energy Inc. has solidified their position as an industry leader in the emerging renewable fuel and energy business in North America with a host of recent triumphs, including the launch of their Clean Power Brand of fuels, fuel conditioners, and environmentally friendly canola based additives and lubricants such as chain lube, cutting oil, and penetrating fluids. Wehave recently been featured by Saskbusiness Magazine, BNN, BBI, and Ethanol Production Magazine, as well as being the subject of several feature articles highlighting the success of the business and their ability to capture their market and emerge as a significant force in the bio-oil industry.
Clean Power All Purpose LubricantClean Power Air Tool OilClean Power Gun OilClean Power Biodiesel
Clean Power Penetrating OilClean Power Diesel Fuel ConditionerClean Power Chain LubeClean Power Cutting Oil
Products include:
Company Overview1
Contents
Products2
Industry Outlook3
Company Outlook4
Competitive Landscape5
Management Team6
Population Growth
Current projections show a continued increase of population (but a steady decline in the population growth rate) with the population expected to reach between 7.5 and 10.5 billion in the year 2050. Asia accounts for over 60% of the world population with more than 4 billion people. China and India together have about 37 percent of the world's population
World Population Distribution
Source: US Census Bureau, December 2011
The explosive growth of the renewable energy sector, valued in the trillions, is the market that Clean Power will enter.
Renewable Energy
With the growing population more than $20.2 trillion will need to be invested to meet worldwide energy demand by 2030, and more than half of this total, $11.3 trillion, is needed to expand electric production to meet worldwide demand.Renewable energy sources have a growing importance in the global energy strategy. In the global electricity mix in 2030, renewables could supply over 25% of total electricity while this share was 18% in 2004. In absolute terms, renewable energy becomes the second largest source of electricity after coal.
Factors driving the market forward include economic, geopolitical and environmental concerns. Every litre of renewable fuel we produce - is a litre of petroleum diesel fuel that will never be burned - Biofuel production capacity is eligible to be traded as carbon offset credit. The Alberta Protocol is believed to be the standard for Canada and we are currently negotiating with Calgary HQ companies for future offset credits.
clean power
Protein Food Products
The world is eating much more protein food products than ever before. As the largest countries in the world (China/India etc) develop the demand for proteins significantly increases as their populations begin to eat and demand more protein.
According to the International Feed Industry Federation, the global demand for protein is set to spiral to two and half times. The average resident of a developing country ate 11kg of meat per in the mid 70’s but by the mid 1990’s they ate 23kg, and demand grows exponentially from there. Every 1% increase in income levels, corresponded to a 2% increase on spending on protein sources. This translates into a 100 billion dollar market for protein sources.
According to a World Health Organization (WHO) report on child nutrition and health, more than a third of the world’s children are affected by low protein consumption resulting in wasting, stunting, and underweight conditions, “A total 80% of the children affected live in Asia – mainly in southern Asia – 15% in Africa, and 5% in Latin America. Approximately, 43% of children (230 million) in developing countries are stunted”.
Company management foresees an aggressive reach into the Asian markets and with a global marketing approach CPC could be one of the many answers of this nutritional crisis affecting the hundreds of millions.
Animal Feed
Livestock operators, pet food manufacturers and many other feed producers are turning to the use of canola oil based feed sources. This is as a direct result of the ‘mad cow’ crisis that effectively ended the use of animal by-products and renderings in livestock feed.
This new demand is serving to create rapidly increasing prices for canola oil and meal that are expected to continue for the foreseeable future.
Aquaculture is the fastest growing food production sector in the world, growing at an average compounded rate of 9% per annum since the early 1950s.
Canola meal has taken almost 50 percent of the market share for dairy operations in Washington, Oregon and California.
Canola meal (and its close relative rapeseed meal) has become the second most widely traded protein ingredient - surpassed only by soybean meal.
Health Supplements
As consumers turn to supplements to stay healthy in a hectic world, the supplement market is growing rapidly. Annual growth levels in the industry have climbed from 5.5% annually in 2007 to 7.5% in 2009, totaling $9.4 billion dollars in US sales for the 2009 calendar year and a global market roughly three times that size.
Bio-diesel
It is possible that biodiesel could represent as much as 20% of all on-road diesel used in Brazil, Europe, China and India by the year 2020. If governments continue to aggressively pursue targets, enact investor-friendly tax incentives for production and blending and help to promote research & development in new biodiesel feedstocks, such as algae for biodiesel, the prospects for this fuel may become realized faster than anticipated.
The global production of biodiesel is expected to grow at a CAGR of around 15.5% during 2010-2013. Biodiesel revenues are anticipated to increase to $71.0 billion worldwide by 2020, up from $18.4 billion in 2010
Source: Global Biofuel Market Analysis, June 2010Pike Research
The use of Canola in biodiesel production worldwide is predicted to account for 2.5 million tonnes, or 17 percent of its targeted 15-million-tonne harvest by 2015. , the Canadian Renewable Fuels Association expects canola-based biodiesel production to increase as crop production grows and the seed produces higher oil content. It projects Canada will ultimately produce 270 million liters of biodiesel out of 575,000 tonnes of canola seed.
Jet Fuel and Military Applications
A Boeing and Industry Study Shows BiofuelsPerform Effectively as Jet FuelBoeing and a team from across the aviation industry today released high-level elements of a study that shows that sustainable biofuel analyzed in a series of pioneering test flights performed favourably in comparison to petroleum-based fuel. This study included the January (2009)test flight of a Japan Airlines 747 using a sustainable biofuel primarily refined from camelina.
In the U.S. military, JP-8 and JP-5 are used in the diesel engines of nearly all tactical ground vehicles and electrical generators. The M1 Abrams series of battle tanks also uses JP fuel in its gas turbine engine. The use of a single fuel for most combat applications greatly simplifies wartime logistics. JP-8, or JP8 (for "Jet Propellant 8") is a jet fuel, specified in 1990 by the U.S. government. It is kerosene-based. It is a replacement for the JP-4 fuel; the U.S. Air Force replaced JP-4 with JP-8 completely by the fall of 1996, to use a less flammable, less hazardous fuel for better safety and combat survivability.U.S. Navy uses a similar formula to JP-8, JP-5. JP-8 is projected to remain in use at least until 2025. It was first introduced at NATO bases in 1978. Its NATO code is F-34. It is specified by MIL-DTL-83133 and British Defence Standard 91-87.
Canola Facts
Canola is Canada's No. 2 crop • The U.S. is Canada’s largest canola buyer. The U.S. imported an average of 510,000 tons of canola oil per year from 2000-2001 to 2004-2005, valued at $345 million/year. From 2000 to 2005, the U.S. has purchased an average of 255,000 tons of seed per year valued at roughly $85 million. In the same period, the U.S. purchased approximately 1.1 million tons of canola meal per year from Canada (about 60 percent of total meal production) valued at $235 million.
• Canada’s principal seed buyers are Japan and Mexico. China and Pakistan are emerging as major seed buyers.
• In the U.S., the ratio of supply versus demand of canola oil is about 1:3, which presents a huge opportunity for U.S. producers to grow more canola.
• About 1.5 million acres are currently grown in the U.S., predominantly in North Dakota, but also in Oklahoma, Minnesota, Montana, Idaho, Oregon and several other states.
Canada’s canola industry adds over $11 billion in economic activity to the Canadian economy. In the five crop years starting in 2000-2001, Canada produced an average of 6.2 million tons of canola seed per year. In the same period, Canada annually exported 3.4 million tons of canola seed, 706,000 tons of canola oil and 1.15 million tons of canola meal. The total value of canola seed, oil and meal exports is about $2 billion. Depending on the year, canola is either Canada’s first or second most valuable field crop (the other is wheat).
Company Overview1
Contents
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3
Company Outlook4
Competitive Landscape5
Management Team6
Products
Industry Outlook
Mission Statement
From increasing the efficiency of traditional energy using
hybrid systems to developing leading-edge off-the-grid
renewable energy sources, Clean Power
Concepts constantly seek innovative ways to produce efficient and reliable power.
We are passionate about helping those who are concerned about the
long range outlook of energy and communication
costs and the impact of traditional energy sources on
the environment.
We help people to
self manage their energy and communication
needs and control their spending on traditional
utilities.
Clean Power considers its mission to help homes and businesses
harness and use
renewable energy
TimelineJanuary 13, 2011 signed a significant long-term agreement with K.N.D. Feeds Ltd. ('KND') of Saskatchewan to market the company's crude canola oil and canola meal off-take on an on-going basis to an expanded base of customers on a global scale.
Incorporated in Nevada on October 17, 2005
Acquired 94.8% of General Bio Energy Inc. on April 29, 2010.
Began Trading under Clean Power Concepts Inc. name
“This acquisition is a tremendous step forward in our goal of becoming a leading bio energy products supplier. We’ve now combined the key elements of a fully operational production facility and access to public capital markets and will be aggressively moving forward with implementation of our strategic plans.” John Smith, CEO
Acquisition of General Bio Energy
To implement the expansion of business in the environmentally friendly green energy industry Clean Power Concepts acquired 94.8% of Standard Bio Energy Inc. on March 1, 2011, later acquiring an additional 0.3%.
The plant is capable of specialty and toll crushing a wide variety of oil seeds. GBE’s primary brand is: ‘Clean Power Environmental Lubricants’ and other key trade names include: ‘General Bio Health’ and ‘Spirit of Health’, under which GBE manufactures, distributes, and retails essential oils, camelina, canola, flax, and hemp, in various formats including capsules, gourmet cooking oils, and skin care formulations.
GBE was incorporated in Saskatchewan, Canada on February 14, 2006 and operates a fully integrated commercial oilseed crushing, bio-diesel refinery, and environmental lubricants manufacturing and bottling, and nutraceutical and food processing plant in Regina, Saskatchewan.
The current plant has a crush capacity of 19.7 million liters of crushed oil annually. Its biodiesel fuel processor can produce up to 20 million liters of biofuel and biofuel additives and the crushing system can produce nearly 32.8 thousand metric tonnes of meal and protein related products for agricultural/aquaculture feedstock annually.
Company Position
Clean Power Concepts is poised to become a major player in multiple segments of the multi-billion dollar cleantech and nutraceutical markets. The Company is taking advantage of favorable “green energy and green products” industry drivers, its experience, innovation and scalability to build its existing lines and enter new verticals with major customers.Management has built a company that has key inherent advantages over the competition.
Source: Goldman Small Cap Research: CPOW Report Dec 30, 2010
The target markets of Clean Power are in Canada and the US and include:
Commercial Residential Agricultural
Recent Developments
GBE invested over two years in manufacturing process and produce development trials to prove the integrity of its production system and create markets.
During this time the Company achieved the following:
• Refined its biofuel processor and created a second generation machinery,
• Developed a proprietary hydro-jacket seed entry double crushing system
• Created an exportable meal and pelleting operation
• Established a successful retail product line and distribution network and delivery process
• Engaged in Canada’s first Bio-Fuel Research and Technology partnership with the University of Regina and the Saskatchewan Forest Centre (Forest First) for the development of next generation technologies
• Engaged with a leading edge hydrodynamic cavitation technology as an exclusive applications developer for Biofuels, which technology is expected to improve the way in which biodiesel is created and distributed
• Pioneered biomass gasification technologies
• Grew to become one of the largest crushers of next generation jet fuel feed stock camelina oilseed
The Company currently markets to 30-40 fuel stations in Canada and the northern United States, with plans to expand into the channel with alliances with entire chains or distributors in North America and emerging markets. CPCW is also developing Camelina based bio-fuels, which are superior to Canola based fuels in cold flow and used in jet fuel and military applications.
Recent Developments
GBE has developed, and also licenses, proprietary processes which allow the company to pursue its vision of being “green” manufacturing facility with minimal effluents, using a methods which are emissions friendly and do not use a water-wash system.
This biofuel production method also gave birth to the development of additives and value-added products such as its Clean Power brand of biodiesel based diesel fuel lubricants and conditioners, penetrating sprays, dust suppressants, cutting oils and other “ECO-lubricants”.
green manufacturing
Future Plans
Expansion of crushing capacity to a potential of 450 MT crushing capacity per day and improve and increase its refining capacity.
Research into acquisition of a U.S. based biodiesel operation to assist in meeting this production goal and to capitalize on a ‘blenders credit’ that is provided by the U.S. government.
Investigation into expansion within Canada to develop, or acquire, additional crushing facilities and biodiesel operations and is working on an initiative to develop camelina and canola oil refining with a view to producing bio jet fuel.
Domestic and foreign marketing to obtain domestic and export contracts for the sale of its product lines by contacting distributors and purchasing agents of retail operations that sell products and that compete with the company’s products.
Plans to enter niche food markets by developing an organic and/or camelina, flax, hemp and canola based oil products for Health food markets.
Company Overview1
Contents
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3
Company Outlook4
Competitive Landscape5
Management Team6
Products
Industry Outlook
CPC Market Postion
Incr
easi
ng
Val
ue
Ad
ded
Oil Seed
Motor Oil
Bio Based Fluids
Nutritional Supplements
Oxygenated Fuels
Hydraulic Fluids
Specialty Feeds
Vegetable Oil Meal
Herbicide/ Pesticide
Building Materials
Glycerin
Alcohols
Specialty Chemicals
Polymers Adhesives
Bar/Chain Oils
Food Grade CPC has established a model unlike any of our competitors that reflects a core margin of +28%
Its financial model is based on a single input with multiple revenue channels.
CPC Product Other Products
Competitive Landscape
Company Location
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CPC Regina, SK
Cargill International
Bunge International
MilliganBioTech Foam Lake, SK
Raceway Winnipeg, MB
Associated Protein Ste Agathe, MB
BioExx Toronto
Canadian competitors in this space however includes BioExx (BXI). BXI also has patented extraction technology and two products. However, the company has Camelina based products and currently no plans to expand into bio-fuel.
Strategic Partnering
Competitive Advantages Superior Access Agreements for Canola and
Camelina High Efficiency (Patent Pending Process) Multiple, Scalable Locations Low Cap Ex Low Production Cost Diverse Offerings Positioned in Key growth areas Experienced
CPC has superior agreements with the Canola and Camelina growers near its Western Canada headquarters, enabling the Company to procure raw materials at very favorable rates. Coupled with its proprietary processes, CPC is positioned to be one of the most profitable firms in the space.
CPC has a unique process that requires minimal capital expenditures which allows ‘simplexity’ of its crush solution to produce both meal and oil from its refinery, which holds advantages over competing processes.
The result of our designs has meant that GBE can protect its investors and shareholders with some of the best margins in the industry. Including Canadian Patent 2408551 for Canola Meal Fish Food.
ProcessThe shareholder owned and patented design can be installed and processing in 90 days. This means smaller plants and development projects can provide ROI in relatively short time frames.
Technology:
GBE has secured licensed rights to next generation biomass gasification and biodiesel processing systems.
Licensing:
Company Overview1
Contents
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3
Company Outlook4
Competitive Landscape5
Management Team6
Products
Industry Outlook
Management Team
John Smith–President & CEOIpsem Lorum…
Adam Brown–VP OperationsIpsum Lorum…
