Methes Energies is responsible for a series of biodeisel production facilities in Canada (roughly 16.9M gallons/year total capacity), as well as manufacturing and marketing top-of-the-line, continuous flow, fully-automated turnkey biodiesel processing units and multi‐stage filtration/absorption cold soak systems to prevent biodiesel crystallization. They even handle the proprietary control software for their processors which enables the company to do remote quality oversight of clientele production.
The company’s Denami line of biodiesel processors, available in their big daddy 3000 model (700 gallons/hour continuous flow) and smaller 600 model (158 GPH) formats, are extremely compact and well designed. These all stainless steel units have a built-in methanol recovery system and come rigged with a complete touchscreen-based PLC (programmable logic controller) systems architecture. The company doesn’t just help clients ensure their production is top-notch though, they handle hardware repairs and upgrades, as well as advising clients on how to best tune their overall throughput, with learned guidance on things like the best ways/types of feedstock variation for creating an optimum final product. Their turnkey Denami processors come with a full lifetime warranty and the company does on-site personnel training for the units as well as client feedstock evaluation/validation, making these systems a sure fire way for biodiesel producers to easily stay competitive as the industry continues growing. The company provides a whole range of services for new and existing clients as well, ranging from consultation, through sales and on into troubleshooting or more nuanced aspects of a client’s production objectives (off-spec biodiesel production and the like).
The company’s own facilities in Ontario, a 1.3 MGY showcase/R&D facility in Mississauga and their much larger 13 MGY plant in Sombra, are run via wholly-owned subsidiary, Methes Energies Canada Inc. This approximately 14.3 MGY production footprint has recently been accelerated towards capacity with the closing of a $1.5M working capital facility (reported Aug 16), allowing for the ready uptake of additional feedstock and round-the-clock operation of the primary Denami 3000 processors at the facility. The company has done a full review of their Sombra expansion plans and found that current hardware, once retrofitted to flow at double capacity, will be able to meet the 26 MGY production target; a huge efficiency savings over putting in more production units. MEIL also plans to install a distillation column at Sombra to further improve processing quality of the biodiesel, taking full advantage of their working capital facility to refine revenue generation metrics.
Ever since the Canadian government implemented a 2% national biodiesel mandate back in early 2011 there has been steadily increasing demand throughout target markets in North America and the company has just recently managed to ship out a new record from their Sombra plant, as 18 rail cars loaded with biodiesel left the facility in October (over 485k gallons), shattering their previous monthly record of 8 cars back in April of this year. This huge jump in sales and production was directly attributable to strong demand fundamentals and securing of the working capital facility. Success which has led management to initiate further discussions with their current Toronto-based lender about further expansion of the facility to accommodate even more production.
MEIL is on track for similarly robust production numbers in Q4 and stands to make as much product in the last quarter of this year as in the whole of fiscal 2012, an astounding growth story. The company is intent on fully leveraging their momentum and has made significant progress in becoming an accredited BQ-9000® Producer with the U.S. National Biodiesel Accreditation Program too, a program which combines ASTM standard (one of the biggest voluntary standards developing organizations on earth and the leading authority) for biodiesel, ASTM D6751, and a quality systems program that covers the gamut of usage logistics from testing, to shipping and storage. This key accreditation signifies passage of a rigorous inspection and review process by an independent auditor, ensuring that quality control over production is fully implemented and that fuel produced is almost never inadequate; a further, highly visible sign to markets in the U.S. and Canada that they are getting premium biodiesel when they shop with MEIL.
Ethanol producers across North America are really taking notice of the Denami line in recent months and the 600/3000 units are seeing considerable traction as a modular solution for Ethanol plants, with 2013 marking a major increase in sales as producers realize the benefits of extracting the corn oil from their corn before processing it into Ethanol. In fact, the appeal is strong enough that some producers are even going whole-hog, converting the corn oil to biodiesel in order to grab that extra revenue, something which is making the company’s biodiesel processing hardware more and more attractive, not just in North America, but on the global stage as well. The company is well positioned to become a global supplier of turnkey production hardware and has a solid revenue stream of their own via their biodiesel production footprint to back up this play. Moreover, the easy expansion potential of the production footprint means the company can ramp up fuel sales to support their growing equipment business in concert with demand.
Markets should hear anytime now from MEIL regarding their review of proposals from two different, independent third-party EPA Quality Assurance Plan (QAP) providers, as to which they have selected for navigating the Renewable Identification Number QAP scheme, designed by EPA to speed up imports and enable smaller producers to do business more readily. This move by the company will pave the way for a larger export market to the U.S. and investors should keep an eye out for this announcement, as well as news about the retrofitting at Sombra.
More about Methes Energies International Ltd. is available online at www.Methes.com
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