Introducing Solid Recovered Fuel Energy Farm
Greetings Farmers!
Today, I would like to introduce to you about the ‘SRF CDM Energy Project’ at SEED! What is SRF? SRF refers to ‘Solid Recovered Fuel’ and it can be understood as the intermediary processing for the wastes such as grinding and shredding of vinyl, plastics or waste wood.
Let’s find out more, shall we?
SRF(Solid Refuse Fuel)?
○ Solid fuels collectively referred to as solid fuels which have been converted into fuel through the process of crushing, drying, etc. of combustible materials such as waste synthetic resins, waste paper, waste wood, etc., with a calorific value of 4,000 kcal/kg or more.
— It is considered renewable energy in Korea because it can minimize the generation of waste and maximize the recycling of available resources in waste.
— Produced SRF is mainly used as an auxiliary fuel for power plant, district heating, industrial boiler.
○ In the past, types of solid fuels were divided into RDF (Refuse Derived Fuel), TDF (Tire Derived Fuel), RPF (Refuse Plastic & Paper Fuel) and WCF (Wood Chip Fuel)
— RDF, TDF, and RPF have been integrated into SRF since ’14, and WCF is classified as Bio-SRF.
Business Definition and Features
Business definition
Waste intermediate recycling business
ㆍ the business of creating intermediately processed waste through waste recycling facilities.
Business Characteristics and Benefits
What are the characteristics and the benefits of SEED’s ‘SRF CDM Energy Business’? Let’s find out!
- Stable Supply: 250 Suppliers and Buyers Secured
- Facility Technical Ability: Cooperation and Facilities supplied by
‘Doppstadt’, Germany - Government Funding: Ministry of Environment, Ministry of SMEs and Startups, etc.
- Major Business Outlook: Increased waste generation and disposal costs
- High Entry Barrier: Coupled with government permits and location investments
- Continuous Business Operation: Stable sales independent of economic fluctuations
Basis for Growth
Next, we have the basis for the growth of the SEED’s SRF CDM Energy Business.
- Size of Investment: About 10 Billion Investment(Land, buildings, equipment, etc)
- Production Capacity: Increased Productivity Through State-of-the-art Equipment Investment (4,000 tones/monthly expected)
- Best Equipment: Facility Partnership with Doppstadt, Etc to handle beyond the required level of final disposal businesses
- Land Location: Currently 1.49 Ha (Floor Area Ratio 40%) In the future, the company can secure a base for sales growth, such as an expansion of warehouses
- Stable Sales: Currently 250 Suppliers and Buyers Secured(Cogeneration Plant, Paper, Cement Company, etc.)
Potential Value
The potential of the SRF CDM Energy Business is amazing as you can see!
- Market Expansion → Recycling Increase 10M Ton/Year → Creation of 1.7 Trillion KRW Recycling Market Expected
- Continuous Job Creation → Region-based Job Creation → Prepare the Foundation for Regional Growth of Local Governments
- Landfill Life Extension → 0 Landfill of Recyclable Resources → Landfill Life Extension
- Environment Protection → Minimize Landfill and Incineration Materials → Environmental Pollution Prevention Expected
Industry Characteristics
Rapid Variability of Performance due to the Economy is Small
“The main characteristic of the waste industry is its lack of performance variability.”
- The waste industry is characterized by low-performance volatility despite economic trends due to the steady demand
- As the industry becomes more advanced and the economy grows, the amount of industrial and household waste has to increase
- Waste generation in Korea increased steadily with economic growth except during the 1998 Foreign Exchange Crisis, the 2009 Global Financial Crisis, and the 2013 European Financial Crisis.
(Even during the economic crisis, the reduction in the waste generation was not significant.) - When comparing the sales of listed major waste disposal companies with the leading index of the Korean economy, sales growth is stable regardless of the business cycle.
High Entrance Barrier
“ Waste Industry is highly profitable due to its high entrance barrier ”
- Permit-based industry(government-controlled permit industry):
All the requirements stipulated by relevant laws must be met to establish a waste disposal company. - High-investment industry (large investment needed to build and operate a disposal facility):
Increase in maintenance costs due to changes in society’s perception of environmental preservation and management - Securing Location(difficult to secure locations for business facilities):
Even with permission, local governments and local residents are expected to object.
- Difficult for new companies to enter → Concentration on existing businesses
- Compared to the Profit Margin of KOSDAQ listed companies, Waste-processing companies have a high margin (23.8%)
Unit Cost Continues To Increase
“As the economy continues to grow, the waste generation also increases”
- Expansion of consumption → A continuous increase in waste generation
- Costs occur due to strengthened environmental regulations → Processing cost increases
- How fast the incineration (efficiency) and how clean the emission (eco-friendliness) are the key - The unit price of processing increased due to the Scarcity Principle
-Waste Disposal Industry takes a long time to set up due to strict licensing, environmental assessment, resident persuasion, etc.
- The waste landfill price anticipated continue to rise due to lack of supply compared to demand
SEED SRF CDM Energy Business Process
- Waste Synthetic Resin / Rubber: Supply of cement, paper companies, etc. through crushing and grinding of waste synthetic resin/waste rubber
- Waste Paper & Scrap Metal: Purchasing waste paper and scrap metal and supplying it to Asia Paper, Hyundai, Kia etc
- Plastics: Purchasing plastics and supplying them to customers after 1st Sorting, 2nd Crushing, and Grinding
The picture may look complicated, but the SRF Energy Business that SEED does have 3 business stages. :D
- Collectors and carriers bring in waste
- Manufacture of waste solid fuel (SRF) after crushing/grinding
- Discharge to cement factories, paper companies, etc.
Profitability of ‘SRF CDM Energy Business’
- The processing power of 160 tons per day and 4,000 tons per month.
- Revenue of about 130,000 won/ton occur when bringing in waste
- 80% of the total incoming volume is produced into SRF and released
- Cost of about 15,000–35,000 won/ton occurs when the SRF ships out.
The difference in the amount between the incoming waste revenue and cost of shipping out is the profit!!
SEED SRF CDM Energy Business Partner — “Doppstadt”
SEED has a strategic partnership with Germany’s global company, ‘Doppstadt’!
-Doppstadt has Operations in about 40 countries
-Over 12ha Calbe Large Manufacturing site, Werner Doppstadt Umwelttechnik GmbH & Co. KG, Sales and Services Center, Velbert, included
-More than 40 years of experience and provide more than 4,000 high quality and efficient shredders and screens worldwide
-Leading the global environmental technology field through environmental business model and superior technology
-ISO 9001 Certified Company
Retained Equipment
Equipment Operation Pictures
Equipment Operation Video
<in preparation>
So far, we’ve learned about the SRF CDM Energy Business at SEED!
It’s a business that can generate stable profits with the effects of environmental improvements through the waste intermediate treatment process.
I hope you understand a little bit of the unfamiliar terms of SRF and the waste reprocessing.
SAVING EARTH YOU CAN DO IT WITH SEED.
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