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Both Ballard and Plug are in the same industry. High valuations but no profits.
We need to remember that the fuel cell growth will be in long distance and high torque vehicles. Household appliances, cars and delivery trucks will be batteries.
The challenge with hydrogen is not with production but with transportation and distribution. Even the most advanced economies have issues with hydrogen.
Like all government spending plans of this size, it could be a ten-year roll out. Most of the money will go to the big Indian owned conglomerates. This is a fact of life.
Indian rules for foreign ownership in key sectors would reduce our company's involvement either to a supplier of equipment or a substantial minority interest in a project.
There is a problem with so called "news" when three of four press releases involving new opportunities did not result in new capital to buy equipment and by extension generate income.
With land acquired, building and environment permits in place, inputs and offtakes fully contracted, a 100 tpd plant should take about a year to fabricate, test, ship and assemble on site with the clock starting when the deposit is made on the equipment. When you start getting above a few hundred tons per day then the time line expands. It can take a little extra time if LCFS rated fuels or liquid hydrogen are required.
There may be a difference between what investors hope the industry can deliver versus what our company can deliver. The former has a great degree of promise. The latter, with its litany of press releases where there is no further follow-up, is a concern. Unless we or our clients get sufficient capital to buy and operate systems, there will be no revenue. The only source of cash flow will be added share dilution.
There are already some major producers of fuel cells who are earnings great levels of sales but alas no profits.
The market for fuels cells will be primarily longer distance trucks and buses. Intractable trucks will more than likely be battery powered. Most US and EU carmaker are using batteries and not fuel cells. Caution needs to be considered.
The battle between BEV and FCEV has not been settled but it appears as though BEV is winning.
The 1 tonne per day pilot plant is what you would use to test hypotheses or a business model. It is like a contractor building a scale model of what might be when people pony up real cash. There are several plants of 500 tons per day and greater being planned, funded and constructed world wide using pyrolysis and clean incineration. Not so sure on the plasma route.
The science is proven. The technology has been developed. The business model has demonstrated a degree of financial viability. This is true for many of the players in the WTE space. Success will depend on whether an operator can extract the most revenue per ton of waste input on a sustainable basis.
Oil and its derived fuels are overly high now courtesy of the Russian invasion of the Ukraine. The EU is weaning off oil and gas from Russian which should depress future prices on the Chinese and Indian markets. Canada and the US have enough reserves and capacity to meet their needs.
Hydrogen can easily be produced for fuel cells but bulk distribution does not exist in most markets. This is perhaps the reason why domestic car maker prefer BEV over FCEV. It places the capacity and distribution problem on an existing grid. The gas companies would not need to modify their system of outlets. As for buses and trucks, fuel cells make sense and Ballard is the lead manufacturing firm in that arena.
The trick for CLNV is to find a niche market where they can deliver a cost of energy for transportation which is less than what they pay now. This is where LCFS fuels make a lot of sense. They generally do not need to change their vehicles or driving habits and they can improve the environment. If they need to make a outlay on the account of capital, the desired outcome will not be as advertised.
Your post is rather intriguing.
There are many large players in the field that are set in their ways. There are also many smaller start ups dealing with WTE using plastics. They will all say that they have the right solution.
At the same time, country after country is banning or has banned single use plastics. So the supply of waste plastic from major economies other than India and China will dry up quickly. It is these two countries plus Vietnam and the Philippines which form the largest concentration of water border plastic waste. CLNV is already in India as are a few other firms. There is also competition on the ground in the Philippines today .
Collaboration might be a good thing but firms with cash in hand and a proven track record will win the day
It did not take much money for an end of day trade to make the day over day jump seem astronomical. We should look more at the volume weighted average price.
We need to bear in mind that about 80 percent of the project related letters of intent have not resulted in any construction or operation of a plant. Likewise, about 75 percent of the press releases regarding the retention of new funding agents has not resulted in cash into the treasury.
I am not sure if we can call this good news when the generation of waste plastics wi be expected to fall. This places some limits to where plastics only feedstocks can be logically placed.
I heard from my contacts at Queens Park that a large waste haulers is developing a project using some EU designed equipment. From what I can tell, it's broadly similar to what we are using. The same person advised that some equipment is going into some US markets this year. I am still trying to suss out the size of plants.
Canada has banned single use plastics. Most retailers no longer give or sell point of sale plastic bags. Major fast food chains have or are in the process of converting to paper straws. Packagers are switching to bio degradable films. Six pack beer rings are being replaced with glue. The remaining plastics are bottles with the smaller plastic beverage bottles as being the most prone to tossing curbside rather than recycling. This can be effectively countered by bringing back beverage container deposits. Some provinces do charge a deposit. A large WTE plant JV is being discussed for Ontario which will take plastics, tires, wooden debris, garbage and such items to produce hydrogen.
The number of plastic bags, straws and cups is quickly becoming a thing of the past in the EU and Canada. Packaging has reverted back to paper or reusable bags. I was in Walmart then other day and no plastic bags can be found. If they bring in refundable deposits on plastic bottles, we will get close to full recovery with nothing going into landfill or streams. This leaves plastic waste generation going into water and landfill into less developed economies. However, there will be pressure for them to change as well. We need to be wary of the demand headwinds.
A 150 tpd plant should run about 100 million excluding and building works, working capital and closing costs. If you look at the tombstone adverts for Bankers Capital, a raise of this amount is outside of their league.
Where is the funding coming from to construct a plant of this size? A 150 tpd plant should run about 100 million excluding the building, working capital and fees. The tombstone adverts on the Bankers Capital website suggests that this size of financing is outside of their league.
Which is the greater management sin - the sin of being transparent with the shareholders of a public company of the sin of recurring failures for not delivering. This can be harsh but look at the facts.
There was never a material update on the status of the projects in Equador, Cape Cod, the DRC, Cameroon and Sri Lanka.
If they are dead, then, management should say so and why. But, they have not. We should ask what are they hiding? Otherwise, it appears that for every four or so announcements, three are duds. So with about 200 countries across the globe where will the company go next, plant its flag and have a press release? How long will it be when people start to ask what about this country or that country.
If you going through the Bankers website, they are more of an advisory firm than a financing firm. In the deals that they co-manage, the raise is reasonable as notes or preferred stock but silent on equity or project financing. For raises that Bankers has shared on their website, the dollar values are very modest. They may be able to finance about a dozen one ton per day plants.
This is an older press release after which there was significant civil unrest and a government on the verge of bankruptcy. Strangely, our management has not provided any transparency as the the situation of our previously announced project in Sri Lanka. Based on previous press releases without any subsequent updates, we would be cautioned to assume that it is dead.
Conceptually, they have most of the building blocks right. It is just that the management's ability to close a deal and the level of transparency are choppy at best. Travelling to exotic lands, signing deal and press releases galore is pure sizzle. Where's the beef? Our batting average is under .200 as the company or its clients have never been able to find the cash to buy the equipment to generate revenue.
They need to bring on people with more (real) public company experience.
I am not a large shareholder to say the least. I am now underwater on my holding.
The track record over the past year and a half is not stellar.
Four funding parties were press released to deliver funds for our projects. It was our own company that diluted the shares to buy the prototype system for India. So, less than 10 percent success rate.
We have all read press releases for three sites in Ecuador, the Cameroons, the DRC, Cape Cod, Sri Lanka and if my memory is correct also the UAE. If I add the three other sites, two of which are operating, it gives us a success rate of about 18 percent.
There are other parties developing larger scale WTE sites making one of power, tank ready fuels and hydrogen in India and the UAE. There are also sites going into the US where modern systems are being developed using pyrolysis rather than traditional incineration.
Yes, I may be repeating myself but in understanding human and management behaviour, what they have done in the past is likely a good indicator of what they will do in 3he future.
Obviously, some one provided the capital to buy the equipment.
However, when you look at the history of press releases naming new projects, changes in capital funding sources, the shift in the messaging and the absence of follow through on any of the aforementioned, one can be reasonably skeptical. Any one remember the Cameroon announcement? What about Sri Lanka which has had civil discord and a nearly bankrupt economy?
And the only way that you can get the revenue is if someone provides capital for the equipment. Either our company raises funds, a client raises funds and buys equipment from us or a government taxes or borrows and buys equipment from us.
From a bankers perspective, revenue does not equate to after tax cash flow. If there is a million dollars per week in revenue but 80 percent is tied up in operating costs afterwhich taxes are paid, there is a much smaller amount available to pay down the debt.
It would be different if the financing was all paid in cash equity. You would not be concerned with capital repayment but the targeted yield is another matter. These types of investors must consider that the price of hydrogen is expected to fall appreciably over the next decade. The demand for oil will fall in the EU as they go more to solar and wind and LNG. The Russian oil will be priced lower to take up supply.
Revenues can only be realized when either CLNV raises funds for its owned and operated projects or its clients raise funds to place an order with CLNV.
We know that Dan is on his third or fourth funding group now. At least three have not yet delivered. The Indian plant was financed through dilution of our own shares.
As for the Nantes deal, it will take a year before the parties can start to shop around the deal for financing.
These things take time. Financing a start up with no real money from the project developer is a big turn off for major infrastructure banks like Mcquarrie, pension funds or family offices. So, we need to almost double our time estimates in seeing capital then add a year before commercialized revenues happen.
Once the contracting parties have done all of their development work, they will go out and try to find the money to build and operate a 100 TPD plant.
It will take a year for the MOU part announced today. Based on the company's experience with financial parties, it could take up to a year to find the cash. So, two years from now we could see a gold plated shovel go into the ground.three years from now we could see a running plant.
Jalaber Diffusion has been around for a while but they are not large. On the recycling scale, they are very small. We are speculating that they can get the permits, feedstock and offtakes to form the basis of attracting patient debt capital. We should not oversell this press release.
There are a number of major facility operators and equipment manufacturers already out there. How can you compete with large well known firms that have the abilitunto build right and with substantial guarantees or operators that emit less pollution than world or domestic standards.
We may have the Rolls Royce solution but an upscale Mercedes may win the day.
Bang on.
No capital funding means no revenue.
The Nantes project has in the best case a year away from completing the terms of the MOU followed by a year of shopping the project around for project finance. This would be followed up by a year of construction for a 100 TPD plant. So, at the beginning of year four would real cash be generated. Between the start up hiccups and repaying the debt with interest, maybe in year five might the JV be able to distribute cash to its owners.
I agree that 20 years is not bad.
However, the firm is very small and has little in annual turnover. Your local Wendy's is bigger.
As for a foot hold in the EU, there are already a number of clean waste to energy plants in operation. The EU bureaucracy is working feverishly and been for years to get rid of single use plastics. The amount of plastic generation and by extension disposals will fall.
I did some Google searches on Jalaber Diffusion. They have been in business for about 19 years and are thought to have about a dozen employees. They are in the recycling business offer machine rentals and processing. According to their published accounts, they have about 600k in paid in capital and 19 years worth of retained earnings of about 4 million.
While they appear reputable, they are in fact a small company with total assets not that much larger than a Wendy's store. So, it is clear that they are not an industry heavy weight. Not even a feather weight. The non binding alliance with our company is a leap of faith for them to get them to the level that they could appear on anyone's radar.
Other than the issuance of shares, what third party funding has materialized to date for any project mentioned in an MOU? India was financed through share dilution. To my recollection, Morocco was not disclosed as who was providing the cash - not CLVN.
Previous financing firms have not delivered and cash reported on our financial statements.
So, when it comes to France, the future of this project comes down to the parties doing their best to present a project that can attract third party capital. It could be a year or so out to get a bankable prospectus circulated to potential funders. We should not get ahead of ourselves.
Nice announcement but there are a couple red flags...
The term sheet is non-binding so if there are issues both parties can merely walk away.
There is one sentence which is effect says that the parties will work together so that they can find a funder for the project. Ergo, no money, no revenue and no profit until all of the work is done and they can find a funder. In the EU, permits are are painfully slow to obtain.
Yours is just one opinion like my own.
There are a few suppliers of the key elements to the various systems. Some are well known and others are not.
Deflection of the salient issue does not help investors at large. Why has management not said what projects are moving ahead and which ones have not. In looking through the posts, some investors are tallying up the press releases for capital spending and derived revenue as a means to encourage investment and steadily higher prices. The failure to say that we are going a different route places risks on management. There is nothing wrong to say that we have had to shop around projects to a range of investment dealers. There is nothing wrong in saying projects A, B, F and G are aborted. What is wrong is to place false expectations in the minds of investors.
True, the company does not release any information from cancelled, indefinitely deferred or deferred projects previously announced by press release. Some can argue that it is not professional while others can say that any negative press release would tank the stock price and thus he ability to dilute the stock further.
The company has provided information (not covered by an NDA) on their changed planning horizons to others who are affected by such scheduling changes. I am a supplier to one of those parties who is derivatively impacted. I am not privy to which sites are in what category of "delay" or whatever.
Ecuador as the first casualty is a logical first guess as there was no follow up in any Spanish press or in local social media. I am pleased that someone has said that it is dead. Management has not.
Unfortunately, management has not said anything about Ecuador or other locations.
I agree that priorities can change but there is an expectation that professional management would mention the change otherwise investors may start tallying up the capital investments and projected income and come to the wrong conclusion.
We have gone through 3 or is it 4 financing firms so far.
As for Ecuador, it is being deferred according to a source that I have.
I have no updates on the DRC or the Cameroons. Any substantiated news?
Sri Lanka is bankrupt and is engaged in civil unrest.
Many people are quoting various government rules ad positions to eliminate plastic usage. So, we go back to paper bags. Can you see major economies digging up landfill sites to recover plastics? That we be more harmful than leaving things as they are. So, if plastics are drying up where is the feedstock coming from other than from lesser developed countries.
Agreed.
While I can respect a difference of opinion, can anyone demonstrate where our leadership team has provided an update on the status of the projects in Ecuador or the DRC or the Cameroons?
The same holds true for Roselle or HDA.
Some may not like the questions but honestly ask yourself what is the status of each of previous key press releases.
The company is in the right place at the right time. However, management is not positioning the message is such a way to attract serious capital and by extension bolster the share price.
For example, after any press release which has announced a new site, a new corporate finance and so forth, there should be a follow up statement saying it is moving ahead, it's paused or it is a dud. Investors would appreciate the truthfulness of management. Management cannot get it right 100 percent of the time. By being proactive you engender trust. By ignoring the past the question is what do you have to hide?
It takes time to build out a proper incineration, pyrolysis or plasma system of any credible size. It also does not come cheaply.
I continue to hold my shares and will try to keep an honest dialogue of what is good, what is questionable and what warrants some serious answers.
Actually, you should be worried about GGII.
It is part of an ongoing trend where a press release is made then nothing is said after 3 or more months. You should ask yourself why? Did the project die or was is a story to promote and flog shares? Prudent management should have said something but elects not to do anything.
Ask about Ecuador? DRC? UAE? The Cameroons?
Ask about Roselle? HSA?
Are they dead on the vine?
Why does management choose not to say anything about the past announcements. Could they not raise the capital? If not, why not? It is okay to say that a funder is not longer involved. It is okay to say that a project could not be developed for local reasons.