is... a buy and hold investor of dividend US and Canadian stocks
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You are dead right. He is in to the hilt. All the way in.. as it were.
And do I think they need much more money? Unfortunately, yes they do. I know what you are thinking... all they need is that permit.. and all problems solved. Well, I hope so. But, what are the chances? You think that he can simply turn on the spigot and become profitable tomorrow? Not likely. Possible, but not likely. And that is pretty much what he has to do.
I am not really being skeptical, I am just telling it like it is. I unfortunately am used to looking at things as being well-planned out with a known expected result, or otherwise being crap. I spend my working time making sure things are not crap. So it all depends on your perspective.
I would not be surprised if he has some permission to operate. But, it could simply be a favor from the DEC because he is in such a sorry state.
I would have expected him to have all 3 processors up and running in the NY plant by now, with permits (SW and Air) understood and in place. If that were the case I would say he has a chance.
Once again,.............GLTA.
"So they can educate others? "
Anybody that worries about losing IP is a bit off IMO. Drawings get shopper around constantly in the engineering business. Anybody that violates confidentially agreements would be out of business before they put the phone down.
Anyway, I don't think that what JBI is doing is rocket science. The only real technological advantage is the catalyst. everything else is just mechanical.
"CRA is doing that work. Working with a large engineering firm like that makes building more machines easily."
Actually, I just had a look on the web at what CRA does. They could do engineering work, but it is not their forte. I would have thought Islechem would be the ones providing engineering services to document a design. That design would then be maintained in-house by JBI. But, you could be right.
Terry:
This is my vision of how a design/build effort would go. This assumes that an external machine shop would be employed to provide fabrication services.
- system would be modeled (conceptual design). Likely done by Islechem.
- dimensional design would take place. Detailed drawings of all items with modifications as required and custom items.
- Procurement would begin for materials as well as fabrication of custom components and modification of equipment.
- Build would take place according to drawings. Material from procurement shipped direct to site, along with custom items.
- Equipment (Long Lead) items are critical path. There would be several, including the processor. Plan would be to ship those items to external machine shop for prep work. Afterward, shipped to site for erection.
- it all comes together and results in As-Built drawings. Final construction package is As-built drawings.
Notice that the above DOES NOT REQUIRE a machine shop. Note also that the above requires PLANNING. That is what I do.
It appears as if this has been done 1 step at a time with no thought to the grand plan. Just an impression. It is as if it was built by hand with documentation or drawings being an afterthought.
Is this your impression and do you agree with my plan/ approach as describes above WHY, WHY NOT?
Of what use is a machine shop to JBI in the long run?
I have seen machine shops in many places I worked. In fact, and LARGE manufacturing company has them. JBI is not large.
IMO machine shops are necessary in case custom parts are required. Given economies of scale that large plants embody, that would be much faster than going outside for it. I have also seen machine shops becoming necessary when the equipment is so old (1960's CANDU plants) that parts are no longer available for some equipment.
JBI does not fit the above. The objective for JBI is to build something that is repeatable and can be built by anybody. If you look at the Envion unit one can imagine a set of drawings that go along with it to allow for rapid erection of the plant. No Viagra necessary. JBI is a small plant that is intended to only be a pilot.
A machine shop?
No i would say it has not, but I am not up on this board and have not been reading every message like I used to. My post about the video was that it was intended to convey an impression, essentially a marketing video. And IMO it left something to be desired in terms of the impression created because of the use (or lack of use) of PPE, etc. And I was questioning their ability to produce oil with the comparison to the NSA Water Filter trick (using previous output (water) and representing as output from current input (beer,,)).
There was never much doubt that they could produce oil. Reliably continuously? I still do no think they are there, but they sound good on that front as well.
profitably? that... is the question. We are back to the basic question; can they produce oil at $10/barrel and sell for such a large margin and make money factoring in all of the other costs? We don't know that.
I can provide 2 reasons why i would not place bets at this time; they cannot plan worth beans, and they are out of money. Both of those are show-stoppers for me.
This matter of permitting is simply a matter of good planning and they have blown it. I believe that they could have permission to operate at this point while the paperwork on the permits is being finalized. It is a bit odd, but I have seen regulatory agencies like this bend over backwards for companies to get them operating and break what seems like unbreakable rules. At the end of the day they will be reasonable. if it is just a matter of process, they will expedite or allow operation under strict understandings.
I have consistently posted that the permitting is not a serious issue. The requirements should have been understood up-front and the permits built into the plan. The plan should have told the company what the Critical Path was and allowed them to focus on that. IMO this should have been a 4-5 month job, and that is all 3 processors. All JBI had to do was to make public some "on-stream" date that included all requirements including permits, and then stick to that date. Or at least a season ("the fall...")... LOL... Their emphasis on permitting is a distraction from reality.
But all of this has nothing to do with the basic issue of profitability. That remains to be seen.
And I do feel for investors who are relying on message boards for hope that some revenues will be generated soon. There is no official word from the company, no realistic dates, every deadline has been missed, and in the absence of said message boards postings, it will be another 2-4 months. At which time JBI will be out of funds....
GLTA
Terry:
Good report.
A few things come to mind. Did you find it odd that they were making machine parts and maintaining a machine shop? Were they making the attempt to find the items commercially before going to this expense? Each custom part requires some arrangement or source for replacements and spares, as well as design specifications.
Even if they needed custom parts, I would think that they would spec them and have them built externally, then these same sources could be used for later P2O implementations. Frankly, I would have expected only a few custom items on an as-necessary basis.
What are your impressions on their readiness to build more P2O units rapidly? Are they ready with a Construction Package and detailed design documentation? Or is this a one-off?
why "now" ltg? what is it about now that is so compelling?
that is because it was not even worth 1.05.... LOL...
"This was almost an eight dollar stock earlier this year when they had way less then what they have right now. "
this was an eight dollar stock when they had a lot MORE cash than they had now.
and actually, there is no reason why it was $8 in the first place.,,,,...
I think you are incorrect if you are saying that instrumentation is better inside a building. It is built to operate in specified temperature ranges and can be ordered to work in the harshest environments.
"Human Interdiction" is a nuclear term. It just means human interaction. Operating on delicate equipment requires reasonable ambient conditions. Process equipment does not. Maintenance and inspections happen in all temperatures in all conditions. They are fairly infrequent. Airplane maintenance is measured in hours/hour of flight time.
Thoughts on Filing for Quarter ended September 30 2010
Just took a look at the recent filing for the first time. Much of this has been discussed, but I will try to add where it is new.
Financial
- they are obviously cash-poor, but their Current Ratio is not bad at all. Quick Ratio is horrible and I wonder if that will cause them a cash flow problem in the short term. They say they ae taking necessary steps to improve their cash management... but having 300k in the bank is exactly as bad as it sounds.
- They could improve on collecting on their A/R and reducing Inventory. They actually make a statement about this later on
"JBI Inc’s Javaco subsidiary had accounts receivable of over $2 Million in June of 2010. The Company uncovered inefficiencies in Javaco’s operations and consolidated some of the workforce at this subsidiary in order to improve performance and working capital turnover. Javaco is now being focused towards higher profit margin sales, and the Company is identifying these customers and tailoring an integrated sales approach that we expect will improve this subsidiary’s earnings."
- the A/R has actually been improving if I read the Statement of Cash Flows correctly. Reduced by 400k this year and a less amount in the preceding year.
- the 5M in GOodwill stands out. I assume this is the Media Credits.
I still think that the purchase of subs was not wise. At first glance they appear to be profitable, but not when you look at the Segment Reporting. They are not revenue-generating businesses according to that.
The other Operating Expenses stand out as well , and is detailed later on in the document. There is definitely room here to cut some fat. It is high as a percentage of revenues.
I know that much of it must be due to P2O. I know internally they must be doing that analysis to see how much of their expenses are P2O-related. It would be interesting for investors to know as well.
Permitting
I think this is the biggest issue facing them. This quote is from the document:
"Upon receipt of required permits, the Company expects to begin commercial operation of its Plastic2Oil processor at its Niagara Falls, New York facility in the fourth quarter, thereby initiating a new revenue stream from the sale of the output from the process.
There can be no guarantee that the Company will be successful in obtaining this permit. In the event that New York permit is not obtained in the near future, the Company has been reviewing the feasibility of realizing P2O revenue in different jurisdictions with partners who have already obtained the necessary operating permits required for P2O. The Company is also reviewing the feasibility of installing a P2O machine in Ontario, where one of the Company's facilities recently obtained it’s air approval. In the event that a New York permit is not obtained and the Company fails to realize P2O revenue through different avenues, the Company would not currently have sufficient cash for the next 12 months. In the event that cash is needed before fuel is sold, the Company has a good current ratio and will seek short and/ or long-term borrowing opportunities. Additionally, the Company is taking steps to minimize expenses and reduce operating costs.
"
IMO... this is an issue that should have been at the forefront from a planning perspective at the beginning. Permitting is so important it is a strategic decision impacting site selection, not a tactical matter to be dealt with after-the-fact. It can be much more than what it seems at first especially for new entrants into a business area.
There is another reference in Subsequent Events:
"The Company received notice dated October 15, 2010 that the Ontario Ministry of Environment registered a “certificate of Approval for Air, Section 9, EPA” in the Company’s name. A “Certificate of Approval for Air” in Ontario is equivalent to a NYDEC Air Permit in the United States. The Company also received a Certificate of Approval for Industrial Sewage Works, Section 53, from the Ministry of the Environment. These approvals are for use at the Company’s fuel blending site. The Ministry of Environment allowed the transfer of existing approvals (permits) of the blending site to the Company"
My interpretation of this is that although the C of A is transferred, it is specific to the blending business, so is not applicable to the pyrolysis business. The wording that it is equivalent to an Air Permit from the DEC simply means that the process to obtain is the same. Likely the same data could be used.
This statement is paricularly revealing:
"On November 10th, 2010, JBI Inc.’s simple air permit application was officially submitted to the DEC after significant consultation and meetings between the parties. JBI Inc.’s environmental consultant has significant experience with permitting and in consulting with the DEC prior to submitting our permit application, we mutually agreed upon language and data so that many of the questions that would typically arise during a permit review process were already eliminated. These lengthy consultations and discussions with the DEC about the permit language and data greatly reduce the amount of time required for the DEC to review a submitted application."
IMO... all of these discussions could have happened before. The critical timeline or path was likely the scheduling of the stack test. But.. for the application to not be submitted until Nov 10 is an unnecessary delay that I see no reason for.
IMO the whole subject of commercialization could have been illuminated more. There is nothing wrong with process improvement as alluded to here:
"There have been many other additions to the P2O machine and facility since the last quarterly filing, all of which have been designed to increase efficiencies and improve operations. A second condenser was added to the P2O system so that there is one condenser to condense the heavy fuel (diesel) and another to condense the light fractions (gasoline). Additional improvements include an expansion of the furnace, installation of a small cooling tower and the purchase of a small diesel generator for times when our machinery is disconnected from the electrical grid.
"
It does not excite me, because it is simply a bit late in the game.
There is a statement about commercialization that I would have expanded on:
"The Company has incurred many non-recurring expenses in preparation for the commercialization of its Plastic2Oil technology, the operation of its fuel-blending site, and the restructuring of Pak-It."
I noticed that the number for spending at the blending site is now 75k, was 24k. A more realistic number.
There is a statement near the end that they have enough cash to sustain themselves until they get an Air Permit,,, what about the Solid Waste Permit or issue??? That makes the SW permit a big issue.
Lastly, there is a statement that the legal proceedings are "immaterial" to the company. I disagree... if MK chooses to pursue the Misrepresentation charges against JB, it could be very damaging to the company.
A Sincere Profuse Apology to Righty and any other Posters I may Have Offended by Posting Erronius Information on the Ability of JBI to Rapidly Deploy the P2O Unit Based on Photographs and Notes.
Righty:
I posted that there was a statement in the recent filing (quarter ended 30 Sept 2010) that JBI was relying on photographs and notes to rapidly deploy the P2O System. I was in fact reading the wrong document, a refiling of the statements from 2009 of the same period.
I have removed all offending posts from the record. I now have the correct document and will try to provide some useful comments when I can. I have not entirely read the document, but I am just about 100% sure the statement is not there.
This was an honest mistake. I did not give my reading of the filing much time as I am currently in the middle of my 2010 Corporate taxes.
I must also compliment you on your use of BOLDING, Capitals, and Fonts in your posting. I myself do not know how to do these things. Your message sets a standard that should be revered throughout iHub and sets the Ultimate standard for message board post formatting.
Once again, my sincere and profuse apologies.
My point was, if they need a SW permit, then it stands to reason that JBI needs a permit as well. JBI will be holding inventory. JBI's business is as much about managing Solid Waste as it is about making plastic.
I can give you a perfect example of the kind of drawing they need as part of the Construction Package to deploy that system via outside contractors in large numbers.
It is called a P&ID or a Process and Instrumentation Diagram. It is one of about 5-10 kinds of drawings they would need to be able to construct this quickly via an outside contractor. It is non-dimensional and documents the control system completely. Why don't you look that up on the web and get back to us with what you find. It is somewhat like calling a phone number, it is easy.
Furthermore, anyone who has worked in the process automation industry would agree with me.
This is a perfect example for JBI because they have this complicated control system that JB is so proud of. One of the things that I noted after the last CC is that they were still tweaking it and adding instrumentation. I noted that this indicated that they were still in an experimental stage.
P&IDs rely on every piece of process equipment having a "tag number" which uniquely identifies it. In industry people do not talk about specific valves or instruments, they talk about tag numbers. That implies that the system has to be finalized.
The time for screwing around is way past for JBII. I noted that when TechisBest visited JB was still talking about process improvements. The time is past for that.
Anyway, P&IDs are the Bible in the process industries. If JBI has not got them they cannot be taken seriously beyond those 4 walls of the NY plant.
As a final note, I use photos and notes when I work on my car. I wonder where JB got the idea for that? Are you saying that jBI uses the same techniques that backyard mechanics do?
well i worked in industrial gases on very similar process projects. I think that experience is good enough. IMO.. have a good night and a merry Xmas and I hope you enjoyed your thanksgiving turkey.
My information is about as complete as I can get it. I am referring to old posts I made.. what else would you have me do.?
Listen Brig, it does not matter what size the machine is, if it is a refining operation, a liquifier, an incinerator, a vessel, a toilet.
The union tradesman shows up for work and sees his foreman. the foreman says... your job is this today. The foreman has looked at the drawings and seen the work to be done... he directs the work.
The foreman may be brand new. The guy doing the job may definitely be first day on the job. He may get "laid off" at the end of the day. He may encounter a problem and have to call the Field Engineer (from JBI) to consult and raise a Field Change... because the DRAWING is wrong.
'enough said. I can't explain it any better. Sorry.
I agree in general terms, bu you should be able to quantify exactly what the synergy is... can you?
Brig, I will try to clear it up. Just because i have not worked on P2O (not many people have) noes not mean I have not worked on similar Engineering projects in the Industrial Gases business. I have done exactly that, so the knowledge gained of how these things are done is transferable.
hopefully you can understand.
Synergy is financial... having contacts provides zero financial benefit. Pak-It and Javaco would do just as well on their own. Where is the financial synergy now that would justify utilizing this money for these acquisitions when they clear need it for P2O?
well it don't think it matters what I am qualified to do or whether I have seen their machine, seen it run, or even understand it. I know Project management and the Engineering process and IMO they need dimensional Detailed Design drawings. IMO..
have a good night... and ROFL as much as you want.
I have worked on similar projects and been involved in lots of new builds and procurement processes for construction contractors. I have also seen work done in the field. It does not matter if it is P2O or some other process, when the construction crew comes in they could care less about photographs. They need drawings.
I can only explain things so many times Brig.
maybe you have not spent time in construction. JBI is not ready for rapid deployment of multiple P2O units... that is what we are talking about.
were you going to answer my question zardiw? where is the synergy? you were just talking about revenues...
Not silly IMO. I think this post covers it quite well:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57229352
with regards to what you are saying, aircraft require alot of "human Interdiction"... don't they.. ? Process equipment more or less runs itself. Has it not been said here that this process only requires 2 low-paid operators? then why does it have to be inside?
and from what I HAVE SEEN ... yes it is a sprawling unit.. YES. I don't have to have 5 multi-angle views of the whole thing to draw that conclusion.
agreed...
how are the business lines related outside of the fact that Pak-It makes the catalyst? I mean operationally, not financially, not because of the fact they are green, that is branding..
IMO maybe, but likely not possible in what is essentially a process operation. just IMO.
what kind of permitting do you think landfills have?
I guess we will differ in opinion. Off-the-mark is a relative term and you are right the future will tell the tale. I stand by my post.
Everything you are saying are simply things that can be read. I read those things. i was not impressed. So what? IMO.. every company has contacts. I have seen tech companies being bought for their customer base. The technology is discarded and the customer base mined for what it is worth. That has some value...
anyway it is all IMO. I read the report and those things contained therein. They were just not noteworthy.
A company that would make the catalyst would lose their reputation (and business) if they ever let a trade secret like that get out. They are prepared for this kind of task.
I wanted to respond to some of your previous comments.
On the use of gravity and the tendency to build up. Gravity is used in many systems in lieu of pumps. It is used to creat pressure for water systems, emergency water purge systems, etc...
In the nuclear industry, you only see 1/3 of the reactor above ground. The rest is below ground. Underneath the reactor there is a dump tank where the moderator goes if there is an event (accident.. leak), for example.
Building things UP is just a natural occurrence because of the use of gravity to create pressure on-demand. It is not that people naturally build things UP, it is just a result of good engineering.
In JBI's case, it seems to me as if the plant is sprawling.
The Envion unit appears to be built UP and has a small footprint.
I do not know refinery processes, hence I could give specific examples of why things may be built UP.
You were asking if I was a construction worker... I have been on job sites so yes I know what a zoom-boom or JLG LIft is.. Thanks.
I look forward to hearing from you tomorrow after your look at JBI.
Terry:
My experience with permits is limited to obtaining Construction permits, but I have been inlots of areas that deal with Waste, including nuclear waste. Nuclear sites have nuclear licenses... same thing....
from the filing, the feedstock = "Raw, unwashed plastic"
So he is goign to have a 20T /day pile of industrial plastic. I would define that as SOlid Waste requiring controls.
Actuallt a poster some time back posted the relevant sections of the legislation covering this and I clear saw the requirements laid out. I think it boils down to:
- a dedicated building with a concrete base to prevent leaching and the formulation of plumes.
- an HVAC system to control dust and odor.
Well yes, but don't you think that there could be assurances in place that protect IP? I am sure these companies deal with these kinds of concerns all the time...
In response:
OK, I can agree with you on the commercial production. THe lab setup was a science experiment as what they have now is a prototype. Agreed. It is a commercial prototype.
However, I do think that it is lacking in the kind of documentation that can support wide deployment, namely a set of Design Drawings. Do you agree?
Do they need to be Outdoors? I think the question is, do they NEED to be Indoors? Being Indoors is a huge cost factor which should be avoided if at all possible. The equipment that makes up these systems is built to take all ranges of temperatures and environments. As for your comment about regulating, being in room temperature is usually not a requirement. Usually, ambient temperature does not matter. I would compare it to my car, which finds it's temperature naturally (regulating..)., my knowledge is limited in term sof Process Engineering so maybe you are the expert.
But I did work in a place that regularly deployed systems with structures, and space is always a concern. You don't want anything new to take up any more space in terms of footprint than necessary. Over times these sites get quite cramped. Having a dedicated building in NY is costly and not the norm.
Here is a para. from the Envion site:
The Envion unit is assembled on a single mobile base platform with dimensions 47 feet x 13 feet (14.3 meters x 4 meters). In most cases, virtually no civil engineering is required for installation. Scaling up of production capacity only involves the installation of additional reactors, not entire systems. Unit operation requires non-skilled or low-skilled labor, further reducing the operating cost.
It gives the footprint and addresses constructability. Civil Engineering usually IS very important, so this is addressed.
I know the processes are different. I don't even know what a "reactor" is, so there is no way I can compare the two from a process standpoint.
The relevant factors wrt Outside/Inside are:
- how much human interdiction is required?
- what ambient temperature is required?
- does the environment allow for a building?
- Cost
In looking at the above list, I would say Human Interdicton is the biggest consideration. In both of these systems (Evnion, JBI) human interdiction is minimal. There is a Control Panel in each which required monitoring, but that does not need to be inside. The other interaction is a loading of plastic. The Envion unit obviously has the same requirement and it is outside, otherwise I would say that the JBI system doe snot need to be indoors.
The other issue is the Solid Waste Management issue. It appears as if JBI needs to have a building to properly control SW investory. I have posted previously on this. IF that is the case, it would appear as if the unit may as well be inside, or at least the majority of it be inside along with the SW.
I think that Envion has solved this problem of permitting by locating their machine on landfills that have existing permits, hence they don't have to worry about it.
If it were not for the SW issue, I would say that there is no reason for the jBI system to be indoors, and that it should be similar to the Enviion system. The SW permit is another angle altogether.
Thoughts??
OK. Trying to figure out the context of your question. I don't think it will have much effect. Any lawsuit is going to have some effect initially, but this is just a change that will not matter much.
"These machines are pretty big"???? Whoa!!!
I think the P2O will be more prominent...but it will take awhile. The first franchise has been sold already. These machines are pretty big, so I don't know what the production time to make them is. Fwiw, I intend to operate a franchise here in the Palm Springs area, and Brigg is investigating starting one in Dallas/Ft Worth area.
I thought they were mobile....
Actually Tech, I will save JJ the trouble and say it myself.. here goes..
"The plastic wasn't Free After All!!!""
There you go.
As you said, the company supplying the plastic and receiving the fuel is being saved the cost of disposing of the plastic. So it seems to me that JBII could simply sell them the fuel at market prices, there is no need for a discount of any kind. So, worse yet, JBI appears unable to chare market prices for it's product.
As a barter arrangement this is lacking, because JBII is getting nothing out of it. In fact, it sets a bad precedent because JBII will have set a floor for their prices which they will not easily be able to raise in the future. Now every customer will want this discount, regardless if they have plastic to give them or not.
And why does disposal of plastic cost money??? because the places where they dispose of it have SW permits and processes to properly dispose of Solid Waste in an environmentally friendly manner, which is what JBI needs!!!
I am just going to pipe in on this one, although I have many messages stacked up to respond to.
It is common sense that a business understand it's permitting requirements before they start operations. It appears as if JBI dis not understand and plan for full permitting. It would then be counterproductive for one department of the DEC to issue a permit for operations if another permit for the same operation is required from another department. That would tacitly be approval to operate, which it can't.
Just common sense.
they are on the brink of production with a prototype unit that does nothing but prove the process. They have not prepared a construction package to build it, and the existing design is not optimized for Construction success. They are not on the brink of mass deployment where these issues become important. Far from it.
you can have that opinion, I believe you are wrong. It is too early int he game to say who is right, wait until deployment and then we can see what transpires.
thanks for debating with me in a cordial manner.
that makes it more expensive for deployment.
sorry... LOL.