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Pulling money out of the muck

MUCK has always been a marvellous way to make money, as two local companies are hoping to prove over the next year. One is planning to make its fortune from turning unwanted grease and low-grade oils into diesel fuel using a radical new "miniaturisation" technique. The other will be testing what it believes to be a smarter way of processing the scraps from your home.

Biodiesel Australia is the grease and oil specialist pursuing the holy grail of finding a way to make money from converting animal fats and vegetable oils into a form of diesel.

There is nothing new in this aim, it is just that none of the current crop of diesel hopefuls have been particularly successful. The common problem is that the raw material, such as canola seed, has to be hauled over long (and expensive) distances to a centralised plant and when farmers are getting a high price for their canola they are just as likely to sell it to someone other than the diesel maker, leaving an empty plant.

Biodiesel has a key difference. It claims to have shrunk the process, designing a flexible and portable system that can be taken to the raw material source – whatever that may be; canola today, grease trap waste the next, or palm and coconut oil on a remote Pacific Island which needs a source of local fuel – making the initial market easy to choose, the Pacific Islands.

As well as miniaturising the technology, Biodiesel has a few other features. It can handle all feedstocks, from the muckiest muck to the highest grade vegetable oils. The process is patented, and produces high yields. Of added interest, Biodiesel is the vehicle being used as the return to Perth business for one-time Porter Western and Macquarie Bank analyst, Andrew McGuckin.

For the past year McGuckin, once "a suit" prone to prowling the boardrooms of Perth, has called a rented shed in Welshpool home and a nearby truck stop as the best (and only) nearby coffee shop. It is quite a comedown but the potential reward from mastering the Biodiesel process is huge and Briefcase hears local investors are queuing up to buy a slice of the business when it starts fund raising and that a matching government research grant might not be out of the question – good luck "Diesel McGuck".

Meanwhile, over at the Shenton Park waste transfer station run by a collective of Perth’s western suburbs councils, a new biological waste process system is close to being installed using a process patented by the listed Organic Resource Technologies (ORT)

Readers are forgiven for having never heard of ORT (Briefcase hadn’t either until over a cuppa at E’Cucina – please take note Truck-Stop McGuck) but it does appear to have a smart process that could cut the cost of handling waste by harnessing the power of bacteria, and keeping everything very simple.

ORT’s DiCom process has been developed by father and son team Richard and Thomas Rudas over the past few years and tested in trials by Murdoch University and the University of Newcastle. It has even gone as far as being operated in a pilot plant phase for three years at a Jandakot site.

To non-engineering types DiCom digests waste, producing methane gas (which is sold), compost (which is also sold) and a dramatically reduced volume of waste for landfill. Like all waste retreatment processes it is said to be a win-win-win situation.

The real trick for DiCom, and ORT as its owner, will be in making the rubbish disappear (or shrink substantially) and produce a profit at the same time. Briefcase, which has no expertise in rubbish (apart from writing the odd bit) withholds judgement but reckons that ORT might be worth a squiz.

A few days ago the stock was trading at an unprincely 13.5 cents which valued the company at around $9.5 million. The 52-week high is 19 cents reached on December 5, the day ORT listed after emerging from a reconstructed mining company shell and a low of 9.5 cents reached on Christmas Eve. Since then, there has been steady interest in modest trade, including a big day on March 5 when more than two million of the 70 million shares on issue were traded – perhaps someone taking an early position (or someone losing the bacterial faith?).

 

YOU have got to hand it to Frank Tate as he leads a one-man defence of the Australian wine industry with his strident, and oft-repeated claim, that there is no wine glut.

Briefcase, which defers totally to Frank when it comes to wine statistics (but reserves its position on consumption ability – a sort of "drink-you-under-the-table-any-day-Frank" type of comment) hopes the man who runs Evans & Tate is correct because if he is, a lot of wine producers will be mightily relieved.

The problem, however, is that the same sense of relief might not spread to the grape growers of Australia, a totally different breed to winemakers. Grape growing is where the pain is fierce, whereas from Frank’s perspective the glut (oops, didn’t mean to use that word) means a potential opportunity to lower his raw material costs.

Whatever the point Frank is making, and he may well be proven right in a few years time when a pile of grape growers have failed and new plantings have stopped, it is awfully hard (impossible, actually) to not see oodles of cheap wine on the market, distress vineyard sales from Margaret River to Mt Barker and professional types in Perth wishing they had never heard of the vineyard their mates talked them into buying.

If these are not signs of a glut, and Frank says they’re not, then perhaps we need to re-phrase the definition of grape glut; how about, excess, surplus, or lake – the last word seems particularly applicable to wine, and "wine lake" a nice European touch to it.

 

"A pessimist is a man who thinks everybody is as nasty as himself and hates them for it." George Bernard Shaw.

 

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