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Guz, that's a great article... I hadn't seen that one before. Does anyone else have refs to technical details of the P2O process, such as plastic types, residue output, etc?
The bit that was new to me was this:
"[JBI] is working with polyolefins – PP, PS and several version of PE. It is not working right now on PET, and while it can handle PVC, reprocessing that would require a system to capture the hydrogen chloride gas that would be given off.
These polyolefins tend not to have much in the way of additives or fillers, so that there is little residue to be removed. Bordynuik estimates such residue to be around one percent of the total output from the system."
I didn't know it wasn't working with PET and isn't viable with PVC, which is a considerable %age of consumer plastics. What about, vinyl, polystyrene, ABS, HDPE, etc.
Anyone have links to tech details like these?
Thanks, S.
It's a conservative estimate, but... if you take an 8-hour working day (one could argue for more of course), then you're already operating the machine at 8/24 hours x 5/7 days, which is 24% of rated capacity. During those hours, I imagine there will be regular maintenance (cleaning, adding catalyst, etc.).
That's all I used to get that number of 10-20% really, but I agree it's a bit low.
S.
I remember something about that too.. but it was a post (at least as far as I remember) from a member of this board (zardiw/guzaling?) which did talk about estimates for revenue from each franchise.
I don't think it was any official sort of estimate from JBI -- I would have remembered that as (like everyone else) I'm keenly awaiting it!
S.
Everyone needs to stop blasting bueno... he's the most level-headed poster on this board, and from reading his comments... I believe he's actually optimistic about JBI and is thinking long!
JBI never gave guidance on the tapes -- that's true. But JBI has said ZERO about what revenue they can expect from the P2O franchises either -- BOTH of these "estimates" came from laymen number crunchers on this board (including myself).
Sure we have estimates about the large-scale P2O processor's capacity (15 tons in 2 hours), and sure you can calculate from that what kind of oil revenue you can generate, but that's just theory! In the engery space, its what we call "nominal" or "rated" output and it represents the maximum technical limit of what can be produced, not the average output. From that you must deduct non-working hours (-73%), and maintenance, etc.
Also, the single biggest important factor in generating oil from plastic, is the plastic itself -- the feedstock. And there is an existing industry already in-place to collect, clean, separate, shred, melt-down, and make pellets from plastics. Some recyclers burn the stuff and generate energy. Today, all plastic that gets recycled is already accounted for downstream -- and often contractually spoken-for for years to come.
So parking a P2O machine next to a large city does not mean revenue will magically appear. You need to have relationships with the entities that control the plastic recycling, and ensure a flow of feed-stock. Sometimes it's easy (if you fish up-stream enough, you can often get the plastic for free, or paid to take it), and sometimes its not (if you fish downstream where it's already sorted/cleaned/shredded it will cost you).
So forget nominal capacity of these machines ... it's a pipe dream. I believe 10-20% of capacity should be the working assumption here, no more.
That said, and I think even bueno will agree... 50 machines running at 10% capacity with only 50% profit and 50% of that going to franchise fees... still generates PLENTY of cash for JBI, and put the valuation far beyond the $65m of today.
S.
Anyone know what Pak-It's patent covers? If it's the water-soluble doses, then wouldn't Dropps be infringing? Or are they paying royalties?
S.
Absolutely. The conference call is THE single biggest event that can make the stock move before results (whether financial or P2O tests).
My starting position is quite heavy, but I'm really waiting to see what is said on that call. If it's positive and credible, my position will get much heavier.
Bring on the conf call!!
I agree with bueno... risk-takers like those who are in now won't move this stock much higher. Institutional investors would though (and it seems there are some lurking), or tangible news.
However, it's true... investors move the market, not the economy -- it's true today where the Dow topped 10k again but the economy is still in a dire situation. It's all based on "forward" looking perspective (forward P/E). But this is not General Electric giving guidance on 2010 earnings, it's JBI with no track record and .. no guidance (yet). So there is no official FPE yet!
I doubt JBI will see a PE of anything like 30 or 60. I'm sticking to 10 as a forward P/E, and given some already-posted rough earnings estimates from P2O, that puts the stock at $10.
Most on this board agree though.. that's conservative! And that's good news.
S.
Prophet,
My math yields roughly the same as yours. Worth noting is that 50-60 tons / day is roughly the equivalent of ALL of the consumer plastic used by about 1 million people (2008 stats that I read somewhere for the EU).
However, it's hard to imagine the franchises can get their hands on a significant chunk of this (let alone that it all goes into the recycling "chain" and isn't mixed with trash). So in order to achieve that, they would need one/more of the following:
1. relationships with recycling plants, cities, or districts (for raw material)
2. located near a very large city (so need a smaller %age)
3. get their plastic from non-consumer sources (e.g. industry, retail, etc.)
Of course, if JBI is "selecting" their franchises (joint-ventures actually, according to a prior post), then I'm sure they've got the feed-stock volume in the bag.
So I agree with you ... if P2O works as-expected, and ~50 processors are on-line by Q2 next year (and there are no surprises), then I also see a stock price > $10 by summertime.
And that feels like it could be just the beginning!
S.
12 months? I would expect (hope) it's more like 4-6 months for the first ones to come on-line! With the break-neck pace of JBI developments thus far... it's not out of the question.
But with the franchise model JBI is proposing, it should be self-financing. Somewhere in the posts I read that franchises will need to kick-in the up-front cost of the P2O processors ($400k?), and of course do all their own leg-work to get the ball rolling, so it shouldn't cost JBI much at all to roll this out on a large scale.
Just drop in a water-soluble Pak-It branded catalyst, and pronto... $10/share
Same here, since the long-term revenue for P2O seems so delicious that a market-cap valuation of JBI of $1b doesn't seem impossible a few years out.
That's 15x higher than today!
S.
Yeah, I think although the processor has a huge throughput, it's not feasible to run over 20% capacity (in terms of feedstock availability, staffing, maintenance, etc.)
Assumptions:
rated capacity: 15 tons = 2 hours (125 kg/min = 65700 tons/year)
1kg plastic = 1L oil
oil sold to refineries @ crude barrel price: $0.45 / L
@20% capaticy, yields:
13140 tons / year, or $5.9m worth of oil
So if that revenue is the franchisee's, and I think I read somewhere that JBI takes 65% of a franchises "profit" (not sure what it's based on), which could be 50% of that (easily), so $1.5m per processor per year.
A couple of these for each major urban center is say 60 machines, or ~100m in revenue for JBI.
And all of that is conservative since I believe:
. oil will fetch a premium price due to its quality
. crude prices will RISE
. there can be as many as several hundred of these in the USA alone
. capacity can easily be > 20%
. processing time is better than 125kg/min.
Any thoughts, corrections, additions?
S.
I totally agree -- the P2O revenue at this point is absent from the financials, but could provide the single biggest revenue stream one it's operational (esp. with the self-financing franchise model).
If each processor can process 50 thousand tons of plastic yearly (?), that's about $15m worth of oil sold to refineries (not assuming a premium price due to the high-grade and low-sulfur levels). So even a smattering of franchises across the country (say 20) could bring in well over $100m in revenue for JBI.
P2O makes the "50 in 5" directive for Pak-It seem like the small-time.
Does anyone else have thoughts / math on the P2O revenue once things are running full speed (say 1-2 years out)? For those of us who are long, this is hugely relevant!
You said:
---
Revenues Last Quarter: $47,600
Revenues This Quarter: $10,156,919
Change: +21,337%
---
But the 8K-A says "for the 9 months ending 9/30/2009".
Nice try though.
S.
This quarter's revenue wasn't $10MM -- that's the revenue since Jan 1, no?
S.
Agreed! If I'm unable to attend the conference call I would very very much like to be able to listen to a recorded version. My timezone is Switzerland, so 6 hours ahead of Florida / Niagara Falls.
S.
sorry, too many posts to read .. not reading them all very thoroughly. Dots = connected.
Flyer, I'm curious what the link to hegemoncapital is about? Is this your fund, and if so.. do the recent development in TRTN mean you'll be slurping up some shares?
An up-take by "institutional" investors would certainly be a sign of long-term faith.
S.
It's not just about how many people will attend (because how many shareholders are actually following this board?), but how important people feel this call is at this time!!!
I for one, believe it's absolutely time to have a conf call -- given the incredible pace of chance with JBI lately, and despite the press releases, there is a real communication void.
This board is 99% of the information flow for most of us, which needs to change.
So count my vote not just as an "I will attend" but "I will ENTHUSIASTICALLY AND WHOLE-HEARTEDLY attend".
s.
Maybe I'm confusing 2 things, but are the P2O processors "mobile"? I know there is a mobile tape-reading facility, but what about the P2O machines?
From the pictures posted of the delivery of the first part, it seemed quite small (compare it with the Envion plant just opened). Almost something you can fit on a flat-bed truck, no?
Can anyone confirm/comment?
S.
I agree with you Bueno, keep up the good DD -- constructive and unbiased analysis is good for all shareholders.
If I recall rpg101's last update, part of the p2o procesor was held-up in customs. It it therefore still not assembled, and the large-scale tests have not yet begun. I think it's only a matter of days (well, hours, but longer to communicate it) after it's all assembled to have useful data. I guess we're expecting the processor to arrive any day now.
The as-of-yet unannounced chemical company acquisition should be finalised and announced in 2 days (Sept 30 as per the LOI already published), which should shed much more light that particular revenue stream. If I understand correctly, it's also using this company's resources that the P2O catalyst will be manufactured in large volumes to distribute to future franchisees.
s.
Agreed. Unfortunately, I only have lint at the bottom of my pockets now.. I've already topped-up on TRTN at these prices, and now I'm waiting for the P2O findings.
I tend to think TRTN is not going to break through 1.30 again without some official news, whether about tape-reading revenue, acquisitions, or P2O processor analysis. However, if the news that comes out is good (especially the P20 testing), then I'd guess $2 is not far away.
So yes.. at today's $1.20 I think it's still a good buy!
S.
OK, but so we're clear ... JBI cannot "mine" any of the data from their tape reading business. JBI may, however, mine JB's personal archives.
Agreed with your second-last post that migrating the data to a searchable/modern storage is a huge benefit -- to the owners of the data (which is not JBI).
S.
well, you're our man on the ground over there and your post and clarifications are indeed much appreciated. Thanks rpg!
If JBI doesn't own any of the data gleaned from the tapes (which seems logical to me), and J.B. personally owns large amounts of data, then the iBox maybe misleading, as it states: "310 Holdings Inc. is now a global technology leader whose purpose is to mine data from the world's largest information archive".
"Mine data" to me implies that JBI has the rights to read/use the data. Is that different from "ownership" of the data? Either way, I think we need some clarification here about how JBI can use the data is reads from the tapes, if at all.
If I have understood correctly, the entire P2O process + catalyst was "discovered" in the data recovered from old tapes. Is that correct, and can anyone (rpg?) confirm that there is an active internal initiative at JBI to try to "mine" the data recovered from the tapes for knowledge that maybe put to use for new revenue streams?
S.
No dumping here, I'm picking up more at these prices!
Also, Zardiw, Guz, and Brig -- you guys should stop wasting your time defending JB and the business against unfounded negative posts. Only a few of the critical posts have any merit (and there are some good ones), but the rest is just trash. I even suggest they just be deleted from the board -- to save the rest of us sideliners from hours of useless reading.
Suggestion to help newbies: in the iBox you should explain better the whole 310 'shell' acquisition by JB, as some of the wording doesn't make it clear that this is effectively an 100% new company.
Looking forward to more news...
Zardiw, where is there more information about the franchise setup? I don't find these details (setup fee, revenue share) on their website. How do you know this already?
Thx.
OK, so that's what I thought. The patent filing will be assigned a number when it's "accepted" I suppose.
Reason I'm asking is that I wonder how easy it will be to copy the catalyst, should the patent not be granted!? Is it like trying to determine what's inside a Camel cigarette, or a can of Coke, or ... much simpler like doing a chemical analysis of a skin cream?
OK, so 310 has "no patents on it YET" -- but according to the press release (thanks guzaling), there is an application already filed. Does "As soon as our patent application has been accepted by the USPTO" [quote from JB in the press release] mean that the application is not yet even visible on the USPTO website? Is that why there is no link to the actual patent filing?
How important is the patenting of this process (or the catalyst that makes it possible) to the future of the P2O revenue stream?
StuM
That's what I found (i.e. nothing..)...
So why would a publically listed company not make public the patent application for what is their most strategic technology?
Will the patent be owned by 310 Holdings, or JBI, or JB himself?
Anyone else know about the "filed patent" for this tech (dates, and/or dossier references?)
Thx.
I'm in at 1.35, and hoping to pick up some more at 1.00 or less, but I'm in this for the long term (1+ year). Indeed it's annoying to have to pick-up small amounts though. I'm trading from Europe and paying a serious commission to access OTC shares.
I agree.. P2O is hardly a truly "green" solution since it creates oil for petrol, which will be combusted and hence, product CO2. However, rather than looking at it as an energy source, let's just see it rather as an alternative petrol source. In that sense, I believe it has merit.
Don't get me wrong.. the IC engine is a relic that should be outlawed, in my opinion, but... since that will never happen we need safe and economical ways to produce oil. This is the second or third "r" in "reduce, reuse, recycle", but the better option is still "reduce".
I imagine (but am curious about the metrics) that the conversion process releases very little CO2. Even if the process is self-sustaining (i.e. powered by it's own gas by-product), there must be some emissions.
I had a similar comment a couple of days ago, and the reply was ... 310 is not creating more CO2 by creating oil from plastics. This is merely a newer (and arguably greener) source of oil that is required to meet consumption demand. i.e. consumption won't increase if 310's business takes off.
I'm guessing that even when you consider the transportation costs, emissions (if any) of the processing of the plastic, and any others indirectly emitted during the entire process, it's still greener than the process of extracting (and processing) crude oil from underground.
So yes, I would call this a "green" company -- at least as much as bio-diesel production is anyway. It's not solar or wind "green", but it's greener oil.
Question about the resale value of the oil produced. If it needs to be sold to a refinery, what is a realistic price that they'll get? Something like 50% of the price of diesel at the pump, or more like 25%? I know 310 says they have buyers already lined-up, but does anyone know some financial metrics on that?
Environmentally speaking... plastic is better turned back into plastic than into oil for combustion, and that's a well established process (for PET plastics) that is financially sound too.
My question is ... is P2O mainly addressing the unrecyclable types of plastic (assuming there still are some), or do we intent to capture some of the PETs that are most common in the households? Is is the case where you just throw in ANY type of oil-based plastics into this thing, un-sorted, and it goes? If so, it's tremendously valuable.
Still, I struggle with my tree-hugger ideals here as plastic buried in the ground vs. combusted into the air... I feel like CO2 emissions / air pollution are our biggest problem these days, not ground polution.
I still like this company, and have bought some shares.. at $1.35 though, which is a very high mkt cap for such an early stage company.