Developing the Feasibility

of Bioprocessing Projects

through Multiple Revenue

Streams

John Lockhart BPA

Stephen Cutting Aurecon

22 November 2017

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The development of Bioprocessing

Australia’s Mackay Bioprocessing

Facility will deliver new integrated

agribusinesses and processing

precinct into Mackay, that offers

economic, export and community

benefits.

Creating an agribusiness future

Project Overview

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The objective of Bioprocessing

Australia’s Central QLD

Bioprocessing Plant

project is to commission a

nominal 2,000 - 6000 tonnes

per annum yeast production

facility in Central Queensland.

Products and Export

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• The project scope includes developing oilseed

processing facilities to produce vegetable oils

and oilseed meals for animal feed revenue

streams.

• Vegetable oils and tallow will feed a biodiesel

plant to generate revenue from QLD’s mandated

fuel market, plus producing glycerine .

• Glycerine provides the feedstock for Torsel

yeast production, currently sold into export

animal nutrition markets.

• Sugar feedstocks will produce high nucleotide

yeast products for additional revenues.

• Competitive advantage is that established

products are to be sold into existing markets,

with supply and off-take agreements able to be

established in long term integrated supply with

local farmers.

Multiple Revenue Streams

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This project includes value

adding local agribusinesses to

produce oilseed meal for the

animal feed industry, a biodiesel

to improve transport emissions,

and processing glycerine and

sugar feedstocks to process

high quality non-GMO yeast

products for animal feeds to

replace hormones, stimulate

growth and add protein.

Value Add

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Canegrowers are looking to

venture into multi-cropping,

achieve improved ground cover

to reduce runoff to the GBR, and

develop new food and feed

markets that are integrated into

the agri-business operations in

the Mackay region.

Step Change for Agribusinesses

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• Existing Cogeneration plants offer

considerable capital savings to

establish the integrated

processing modules.

• Site lease, steam, power, water and

effluent treatment costs will be

deferred to OPEX costs, and be

charged proportionally to

production ramp up

Energy Park Synergies

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This project is driven by a need to increase non-GMO yeast production to

capitalise on expanding domestic and export animal feed markets for:

TorSel® Yeast

• TorSel contains 33% more organic selenium than competitor products

• Sold in levels of 4000ppm (actual level is much higher)

• Proven performer in livestock

• Selenium is added to all feed globally

High nucleotide yeast (HNY)

• Used as a natural flavour and flavour enhancer across the food industry.

• Used in feed as a flavour, source of nucleotides, protein and prebiotic.

Autolysed yeast (AY)

• Used as high protein and palatant – similar to fishmeal

Market Led Project

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Research and Development Assistance

• This project will develop the previous demonstration plant technologies into full scale

production of yeast

• The project also integrates four separate value chains into a single operating entity, on

an existing energy park, using technologies that have not been combined together

before in this configuration.

• The project will qualify for elements of the Federal Government’s R&D Tax Incentive

Scheme and other direct contributions to commercialise developing technologies

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Project Development – BPA MBPF Integrated Site Layout

Yeast Processing Plant

Oil Seed Processing Plant

Biodiesel/ Glycerine Processing Plant

Utilities

Weighbridge

Glycerine, Tallow Import Facilities

Oil Seed MealAnimal Feed Ingredients

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Oil Seed Supply Chain – Central QLD Agriculture Areas

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Integrated Logistics with existing agriculture,

mining and existing road, rail and port facilities

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Import/ Export/ Logistics Requirements

Imports

• Glycerine

• Methanol

• Selenium

• Process

equipment

Export

• Torsel Yeast

• HNY Yeast

QLD Distribution

• Biodiesel

• Animal feeds

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Project Development - Staged Capital Plan• In order to increase the capital efficiency of this project, it is proposed to stage the

project to match the availability of oil seeds in the Mackay districts, as local cane farmers grow soybean and sunflower plants as sugar cane fallow crops. There is also opportunity to increase yeast production progressively if feedstocks can be supplemented from adjacent oilseed production areas in Clermont, Capella, Emerald and Proserpine.

• Stage 1: It is envisaged that Stage 1 of the project will focus on establishing the yeast production equipment, that can produce animal feed products from existing sugar solutions from Racecourse Sugar Mill.

• Stage 2: will be to establish oil seed processing capacity to make vegetable oils, oil seed meals and biodiesel and glycerine feedstocks.

• Stage 3: The next stage is to ramp up the Bioprocessing facility capacity to match the agronomy, harvesting and year round supply potential of Central QLD oil seeds, feedlot meal markets, biodiesel sales and yeast market opportunities.

• An initial injection of seed capital from the Federal ‘Developing Northern Australia’ programs or Queensland State Advance QLD or Biofuels programs, would assist Bioprocessing Australia to bring forward investment in this project.

• This would enable quick gains to kick-off the initial R&D trials and engineering studies to establish the optimum processing configurations, plant and equipment designs and logistics systems for a district wide integrated industry.

• It would also enable site construction to commence once planning and approvals, lease arrangements, capital funding and detailed designs are completed.

STAGE 1 Yeast production from imported glycerine and sugar solutions

STAGE 2 Yeast production from Integrated local supply

STAGE 3 Incremental expansion to match yeast, biodieseland soy meal markets uptake

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Planning, Statutory, Legal, Compliance

Requirements and Approvals

The FS has investigated the statutory environmental and planning constraints of the proposed site and the statutory approvals required for the proposed Bioprocessing Plant. The proposed plant will require local and State environmental and planning approvals under the Planning Act 2016 (Qld), Environmental Protection Act 1994 (Qld) and the Workplace Health and Safety Act 2011 (Qld).Pre-lodgement advice was undertaken with Mackay Regional Council and the relevant State Government agencies.

The key matters raised by the agencies were:• Potential impact on the amenity (visual, noise and odour) of the local area• Demand on existing utilities (water and power)• Stormwater drainage design• Details of air and wastewater emissions • Access arrangements in particular with the future Mackay Ring Road design

All pre-lodgement meetings were positive and no major areas of non-compliance were identified by the project team or the approval agencies. Approvals are achievable within a 3-5 month timeframe.

• Mackay Regional Council

• Department of Local Government, Infrastructure and Planning

• Department of Transport and Main Roads

• Ergon Energy

• Workplace Health and Safety Queensland

• Department of Environment and Heritage Protection

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Feasibility Study

Key Stakeholder Discussions

Positive discussions have been held with the following project stakeholders:

• QLD Department of State Development• Regional Developments Australia• GW3 Mackay Isaac Whitsunday economic development group• Mackay Regional Council• Mackay Sugar Limited• Canegrowers Association and leading cane farmers• Department of Infrastructure, Local Government and Planning• Queensland Transport and Main Roads• Wilmar Logistics• Biofuels Association Australia• North Queensland Bulk Ports• Leichardt Holdings Feedlot• Department Agriculture and Fisheries• Mackay Area Productivity Services (MAPS)• Agritechnology• Thomas Borthwick & Sons Meatworks• Farmicist• HPDezign• Suncoast Renewables

The resounding feedback is that the project is ‘COMPLEMENTARY’ for all stakeholders and adds value at all levels

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Key opportunities for Bioprocessing Facility

• Economies of scale with labour and logistics with larger plant capacity

• Land tenure savings with site lease

• State significant project support

• ‘First in’ Queensland opportunities for funding

• Agri-business crop cycles could be blended across Mackay, western

districts and other regions

• Plant unit size selected to process in campaign runs for various products.

• All process units are able to increase production by operating for more

days in a year

• Potential to co-locate with other food/ feed technologies that use same

utilities and balance of plant

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Detailed Design, Tendering, Procurement and Evaluation

• Detailed design for construction

• Classification of capital cost estimate to AACE Class 2 level,

• P&ID (piping and instrumentation drawing) detailed development, including full instruments and control loop links,

• PFD (detailed process flow diagram) with nominal and maximum process flow balances.

• Intelligent 3D design and 4th dimensional database development of all facility assets

• Asset identification and database of key attributes to handover to CMMS

• Engineering Information system for operational readiness handover

• Tendering

• Procurement Assistance

• Conduct tender evaluation

• Award contracts

Project Execution

• Site project management of construction contract

• Contract and Procurement administration

• Interface to local stakeholders

• Operational readiness and Training

• Commissioning

Tasks to be undertaken in Detailed Design

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Feasibility Study Conclusions• Export markets have been firmly established for Torsel yeast products from the Borenore plant,

but opportunities exist to develop further yeast products with sugar solutions

• Revenue streams from yeast, soymeal, sunflower meal and biodiesel are all entering growth

cycles in market over the next 5 years, so potential exists for increasing sale prices

• Ongoing stakeholder discussions may provide further opportunities to grow additional products,

for increased volume or value-add to boost revenue

• Multiple scope options have been analysed, considering multiple production schedules

• Reductions in the Capital and Operating cost base can be made if lower capacities and less

flexibility and risk management features are employed

• Staging of Capex spend aimed to fast-track yeast revenues for early Cash Flow.

• Major long lead Capex items selected with latent capacity for future production flexibility

• Positive NPV/ Cashflow possible in 7 to 12 year period from start of construction on conservative

base case model

• Further improvements in NPV/ IRR are achievable for different assumptions and parameters

• Opportunities to grow additional revenue streams by increasing feedstock processing and

blending of feedstock products

• Preliminary risk assessments undertaken, with technology and market risks the major areas

• Timing of project development is good, with considerable government promotion for Develop

Northern Australia and Bio futures programs

• Strong community support with integration of existing businesses

• FS financial results show long term returns, even for increased CAPEX.

• There are risks across all revenue streams, but potential upside if markets develop as anticipated

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