Plastic2Oil Inc (PTOI)

[fourkids_9pets]

and how could i have forgotten this :)


Fuel Output Issues:
With Processor 3 coming online and fuel production increasing to all-time highs for the Company, we encountered growing pains in our logistics department, loading/unloading, and customer demand issues. On more than one occasion in Q3 and Q4, we had to idle Processor 3 because our fuel tanks were filled quickly. When processor 2 and 3 run at our plant simultaneously, our tanks fill very quickly. On some occasions we could not book trucks on short notice and sometimes we’ve had to send fuel to our blending site for temporary storage. The reason for this is that our customers have a very specific amount of fuel they consume every week. They schedule their fuel purchases weeks, and in some cases months, in advance. Our large customers will off-set fuel from other sources if given enough notice in advance. At the same time, we would have to be absolutely certain we would have the fuel in stock to service them as (if they are displacing fuel from other sources). With Processors 2 & 3 running, we produced 45,000 gallons of fuel very quickly. However, many of our fuel buying customers are on their own set production schedules. As a company, we also want to avoid driving up additional cost of goods by shipping our fuel to the blending site for storage. We have worked to resolve this problem by going through acceptance procedures with bulk fuel distributors who can handle surges or excess fuel production. This process becomes less and less problematic as we produce large volumes of fuel more consistently. Our end customers appreciate and reward consistent, on time delivers, of the specific fuels they require. We have come a long way by contracting multiple trucking companies and more customers.


and this ..

Machines Off-Site:
Internally, we have fully documented processor 3, which is our flagship machine for joint ventures and sales. We have a full set of engineering prints, and installation prints (engineering drawings). We have completed process flows, and troubleshooting manuals. We have also had to produce operating manuals and at this time, we are preparing maintenance documentation for third parties. We are supplying due diligence information to prospective buyers and we are gathering and tracking weekly reporting on processor 3 for buyers.


and worth the digestion :)



Our team and technology
We are a technology company, not an operator. There are plenty of companies with decades of experience in wastes, fuels, and operating equipment and plants. That is why many companies who design and develop processes don’t build and internally operate them. I am very confident in system 3 and a seasoned 3rd party would be able to operate our system well.





Competitive Advantage:
Since day one, we were very aware of the problems plaguing other waste plastic into fuel technologies and the fatal barriers they still have to this day. Our greatest strengths against current competitive technology is:

1.
For example, we have no waste water in our process. Other technologies (where the fuel contacts the water) have waste water disposal bills of $100,000 or more per month.

2.
Another significant problem that other technologies have is residue that cannot pass TCLP testing and therefore is considered hazardous waste. The competitors are still plagued with that problem today. Our catalyst and process ensures the residue is inert and safe for the environment.

3.
Fuel output quality is also a significant problem. Halides like chlorine and bromine in fuels render the syn-crude or random hydrocarbon mash fuel nearly worthless. Halides can be as high as 800 ppm in competitive technologies without catalysts. Our fuels were tested for halides and no halides were found. We do not sell to small refineries, we sell to large customers with significant fuel quality requirements, layers of government regulations, and the need for halide free, high flash point, in spec fuels.

Challenges Solved in Last Five Months:

1.
Residue comes out 1-4 barrels every 12 hours consistently every shift, depending again on the fillers in the feedstock. The product is uniform, much better than before, and we knocked it out of the park from a solutions standpoint. To date, we have removed 367 barrels of residue from Processor 3.

2.
We have amassed significant data from Processor 3 that allowed us to adjust the heating distribution across the machine, the cooling demands and flows into a steady state.

3.
New catalyst into Processor 3 and it is functioning well and a liquefied version will be complete soon. The new catalyst was discussed in detail in my ASME published paper “Viable Production of Diesel from Non-Recyclable Waste Plastics.” I recommend those listening today who are new to the Company today to read that paper to better understand the technology and the evolution of this Company.

4.
The support equipment for the system has worked flawlessly.

5.
The high cost feedstock and those practices have been eliminated from the Company.






6.
Fabrication Team à When Rick Heddle came onboard, he set up our fabrication in a manner that he has experience with from his prior business ventures. The team has executed very difficult tasks, very quickly, without error. Their work has been significantly better than this site has ever seen. The new policies, methods and structure implemented have improved the quality of work as a whole by the fabrication department.

7.
Material handlers and feed stock quality à Our material handlers have been trained. They are very good at spotting any material that is not right. We built testing procedures on site for them to be able to test and reject any plastic loads. For example, the old feedstock we received before the transition in August, was 50% rejected at the hopper. We are now at 95% acceptance. Going through these challenges have built a very robust frontline team who know what to look for, how to test the plastic and waste oil, and how to stop any problematic feedstock before it gets near the hopper.

Challenges Remaining & How We are Mitigating Those Risks:

1.
Inexpensive HTF à We are being very careful what vendors/suppliers we take HTF from. We believe we have covered most possible inert fillers, however, we are in the infancy of this and therefore, despite the fact that we tried to correct high cost of goods caused from extremely expensive feedstock from Q1 and Q2 of 2013, we will not be risking the uptime any further to acquire ultra-cheap HTF. Instead, we will focus on reasonable HTF at a much lower price around $1.00-$1.30 per gallon and not risk new sources until we have infrastructure in place to flag possible unknowns.

2.
Staffing à We are seeking and hiring experienced engineers and chemical operators. We currently have half the staff we had before, doing double the amount of work. We are putting together training materials and hiring the appropriate people to run our processors. We need trained JBI employees to be able to train staff and startup processors in remote locations in the future. They need to be fully trained here in Niagara Falls, NY to be able to do so in the future. We need more staff for this purpose.

3.
Winter à The plant environment is different from the very hot summer to the cold winter. While we have things in place to stop pipe freezing and cold areas, in cases, cold related issues can rear its ugly head when least expected. It is a challenge when dealing with low temperatures and high wind lake effects. We are being vigilant to correct any issues that arise.

4.
Recycling à Recycling is a dirty business! Suppliers, brokers, MRF’s, are all looking at a way to maximize their recyclables and get rid of their waste.. free. Because we are interested in the non-recyclables, our challenge is always being on the defensive trying to stop a large bolt, a skid piece of wood, a large spoon, a baseball bat, or some other large object of that kind from getting into the processor. We are continuing to work with new large feedstock sources and be continue to be vigilant even with the most trusted sources.


http://www.sec.gov/Archives/edgar/data/1381105/000121390013007124/f8k121013ex99i_jbiinc.htm


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4kids
all jmo