The Company's intended principal business is to integrate cattle feeding and finishing with electrical power generation. The main source of revenue for the Company is expected to come from the sale of electrical power and finished cattle.
On December 14, 2006 the Company acquired a commercial-ready facility situated in Oyama, BC, Canada from a Hybrid Fuels Inc. shareholder consortium that financed its construction. This facility includes all equipment and infrastructure necessary to utilize the Company's proprietary technology including a cattle barn, ethanol-producing plant, gasifier/burner (manure/straw burning unit) and a hydroponics barley-grass growing system.
The purpose of this facility is to demonstrate the economic feasibility of the ‘Hybrid Fuels’ system. Once this first facility is operating, the intention is to use it for demonstration and training purposes and to earn revenue from its operation. Our projections indicate that the facility will show sufficient profitability to make it possible for us to get approval for financing subsequent facilities.
The cattle barn at the Oyama facility has been designed to accommodate 200 head of cattle and the hydroponics barley-grass growing system. Once the facility is operational, it is expected that the cattle will be fed starting with 50 head and adding another 50 approximately every four weeks until the barn is at full capacity. As we gain experience with the facility, we intend to operate the barn continuously at full capacity during the subsequent 100-day feeding cycles. Until the Company is operating a beef processing facility it is intended that the cattle will be sold to processors at a price reflective of its high quality.
The cattle barn includes floor space for six individual pens – five occupied pens and one pen remaining empty and free of manure and bedding waste. Cattle are to be moved to a clean pen every five days on a rotational basis. The manure and bedding straw is removed from the pens and destroyed in the gasifier/burner that provides heat energy for the ethanol production and the hydroponics feed system.
In the ethanol plant, grains are fermented and then distilled to produce the wet ethanol. The heat is supplied from the burning of the used bedding straw and manure in the gasifier/burner. The ethanol production process also generates a high protein product, called "distillers mash" and a liquid byproduct called “stillage water.” The mash and liquid is supplemented by barley grass and creates an excellent feed for the cattle. The expected weight gain is an average of four pounds a day per head during the planned 100-120 day feeding cycle.
Once the facility is operating at full capacity, we project that the ethanol production will be approximately 200 US gallons (800 litres) per day. The ethanol is intended to be "de-natured" with approximately 2% diesel fuel so there is no pure ethanol accessible at the facility. Ethanol produced by the first facility is expected to be used in the gasification process. It is anticipated that using ethanol in this process will result in a significant increase in heat energy, ie. BTUs, for the purpose of electrical power generation.
The hydroponics barley-grass growing system is expected to produce a ration of 10-15 pounds per day of fresh grass per animal, year round, regardless of climate. We believe each grass unit represents approximately the equivalent of 400 acres of grass growing land.
Operations are expected to commence once the initial testing of the facility's gasifier/burner, air exchange and feed system are completed and ready for the first delivery of cattle. Management currently anticipates that this will be completed in the quarter ending March 31, 2008. However, it must be emphasized that any delay in the completion of these tasks will also delay commencement of operations. It is difficult to establish the start date of operations since the Company is relying on third parties to complete the facility which includes work by testing consultants and timely provision of equipment and installation. Therefore, completion of these tasks is not entirely under our control.
The Oyama facility will not be run at full capacity until approximately four months have passed from the facility becoming operational. During this four-month period we expect to have sufficient data to estimate revenue streams and expenses to establish comprehensive business plans.
The Company expects to expand the size of the cattle barn in future facilities to accommodate 400 head of cattle for economy of scale. The Company believes the additional heat energy that will be generated as a result of this expansion makes it feasible to develop renewable energy generation systems. It is expected that each facility could produce approximately 400 US gallons (1,600 litres) of ethanol daily, generate up to one megawatt of power, finish up to 1,200 head of cattle annually and provide up to 5 full-time jobs. The hydroponics section of the barn is designed to have the grass growing capacity equivalent to approximately 800 acres of grassland.
It is intended that future facilities will be constructed for the Company by independent contractors on privately-owned farms after a written, contractual agreement is made between the Company and the operator(s).
Efforts to improve every aspect of the whole operation continue with positive results. Management believes the overall Hybrid Fuels program involving progressive and environmental sensitivity towards cattle feeding, maintenance and processing will present a chemical-free product cycle which offers a world class benchmark for the industry.
On December 14, 2006 the Company acquired a commercial-ready facility situated in Oyama, BC, Canada from a Hybrid Fuels Inc. shareholder consortium that financed its construction. This facility includes all equipment and infrastructure necessary to utilize the Company's proprietary technology including a cattle barn, ethanol-producing plant, gasifier/burner (manure/straw burning unit) and a hydroponics barley-grass growing system.
The purpose of this facility is to demonstrate the economic feasibility of the ‘Hybrid Fuels’ system. Once this first facility is operating, the intention is to use it for demonstration and training purposes and to earn revenue from its operation. Our projections indicate that the facility will show sufficient profitability to make it possible for us to get approval for financing subsequent facilities.
The cattle barn at the Oyama facility has been designed to accommodate 200 head of cattle and the hydroponics barley-grass growing system. Once the facility is operational, it is expected that the cattle will be fed starting with 50 head and adding another 50 approximately every four weeks until the barn is at full capacity. As we gain experience with the facility, we intend to operate the barn continuously at full capacity during the subsequent 100-day feeding cycles. Until the Company is operating a beef processing facility it is intended that the cattle will be sold to processors at a price reflective of its high quality.
The cattle barn includes floor space for six individual pens – five occupied pens and one pen remaining empty and free of manure and bedding waste. Cattle are to be moved to a clean pen every five days on a rotational basis. The manure and bedding straw is removed from the pens and destroyed in the gasifier/burner that provides heat energy for the ethanol production and the hydroponics feed system.
In the ethanol plant, grains are fermented and then distilled to produce the wet ethanol. The heat is supplied from the burning of the used bedding straw and manure in the gasifier/burner. The ethanol production process also generates a high protein product, called "distillers mash" and a liquid byproduct called “stillage water.” The mash and liquid is supplemented by barley grass and creates an excellent feed for the cattle. The expected weight gain is an average of four pounds a day per head during the planned 100-120 day feeding cycle.
Once the facility is operating at full capacity, we project that the ethanol production will be approximately 200 US gallons (800 litres) per day. The ethanol is intended to be "de-natured" with approximately 2% diesel fuel so there is no pure ethanol accessible at the facility. Ethanol produced by the first facility is expected to be used in the gasification process. It is anticipated that using ethanol in this process will result in a significant increase in heat energy, ie. BTUs, for the purpose of electrical power generation.
The hydroponics barley-grass growing system is expected to produce a ration of 10-15 pounds per day of fresh grass per animal, year round, regardless of climate. We believe each grass unit represents approximately the equivalent of 400 acres of grass growing land.
Operations are expected to commence once the initial testing of the facility's gasifier/burner, air exchange and feed system are completed and ready for the first delivery of cattle. Management currently anticipates that this will be completed in the quarter ending March 31, 2008. However, it must be emphasized that any delay in the completion of these tasks will also delay commencement of operations. It is difficult to establish the start date of operations since the Company is relying on third parties to complete the facility which includes work by testing consultants and timely provision of equipment and installation. Therefore, completion of these tasks is not entirely under our control.
The Oyama facility will not be run at full capacity until approximately four months have passed from the facility becoming operational. During this four-month period we expect to have sufficient data to estimate revenue streams and expenses to establish comprehensive business plans.
The Company expects to expand the size of the cattle barn in future facilities to accommodate 400 head of cattle for economy of scale. The Company believes the additional heat energy that will be generated as a result of this expansion makes it feasible to develop renewable energy generation systems. It is expected that each facility could produce approximately 400 US gallons (1,600 litres) of ethanol daily, generate up to one megawatt of power, finish up to 1,200 head of cattle annually and provide up to 5 full-time jobs. The hydroponics section of the barn is designed to have the grass growing capacity equivalent to approximately 800 acres of grassland.
It is intended that future facilities will be constructed for the Company by independent contractors on privately-owned farms after a written, contractual agreement is made between the Company and the operator(s).
Efforts to improve every aspect of the whole operation continue with positive results. Management believes the overall Hybrid Fuels program involving progressive and environmental sensitivity towards cattle feeding, maintenance and processing will present a chemical-free product cycle which offers a world class benchmark for the industry.
