Inetec

Source: Energy Digital

Date :26/07/2007 16:39:02

Inetec makes innovation the key to growth in a rationalising market

Formed in 1997, Inetec has grown into a recognised and respected brand in the waste management field. James Hurley spoke to Managing Director Philip Nicholas and Marketing Manager Ed Mant to discover how the company developed an integrated waste management solution that has the potential to revolutionise the way industrial food waste is handled

Written by James Hurley & Produced by Alex Smith

Large scale food manufacturers produce enormous levels of waste, from the food itself to its infamous non-recyclable packaging. Traditional approaches to dealing with these mountains of commercial waste remain popular. But solutions such as landfill, incineration and even composting all have significant limitations, in terms both of efficiency and environmental impact.

An innovative approach

From an initial recognition of this problem, Inetec has developed an integrated waste management solution to tackle it. Explaining the opportunity that the company saw, Inetec’s Managing Director Philip Nicholas says that the available solutions in the marketplace sat against an emerging trend. “We were looking at niche markets that we could tackle and we saw ready meals and chilled foods production as a growing market. With landfill and animal feed solutions both destined to close, we took a call that the current technologies in that market were not ideally suited to the problem of processing package food waste.

“Incineration, which requires planning, might be OK in municipal waste, but it’s not right for big corporate clients who are increasingly resisting it. Composting is not the green solution that people portray it as, and it’s increasingly viewed as landfill in disguise. We were left with anaerobic digestion which suffers serious limitations, including the fact that it doesn’t like packaging or variability of feed stock.

“All of the technologies in the marketplace were less than ideal. We decided to design and manufacture a fundamentally better solution. We felt that in essence, it had to be physical and not biological because of variability of feed stock, and it had to regard the packaging as part of the asset in the waste and not part of the liability. That was the business call,” he says.

Inetec’s innovative approach transforms industrial food waste into biomass fuel, then electricity. “It’s a different way of approaching the problem,” says Nicholas. “When you get wet food waste which is typically 50 percent water, complete with its packaging, and you don’t know whether it’s going to come in the shape of meat products one day or strawberries and cream the next, you’ve got to have a solution that’s ready to take that dynamic range. Therein lies the problem and we set about trying to find that kind of a solution.”

This solution involves a three stage transformation process. First, un-segregated food waste and packaging is converted into an ‘oily sand like’ biomass fuel. A range of conversion techniques are then available to transform this biomass into gas. Finally, the gas is converted into electricity using gas turbines.

Ed Mant, Inetec’s Marketing Manager explains that the solution has a high efficiency level. “For every one third of electricity you put in to run the mechanics of the machinery, you get two thirds out from the biofuel. The fuel’s approximate energy value is about 40 percent higher than that of wood and approximately halfway between wood and coal,” he says.

On a larger scale

While the majority of Inetec’s solutions are currently focused on on-site solutions for commercial industrial food manufacturers, the company is to begin construction of its first large-scale renewable energy centre power station in October. The project, in Immingham, Lincolnshire, is being operated by EnCycle, a wholly-owned subsidiary of Inetec since November 2006, with the development expected to cost in the region of £69 million.

If successful, the site could be a prototype for an infrastructure of energy centres powered by a waste stream that has traditionally been sent to landfill by the majority of food manufacturers. The scale and vision of the project is impressive; Inetec’s on-site technology can process up to ten tonnes of waste a day in the largest machine, while the site in Immingham will be able to process up to 500 tonnes a day, producing 24MW of energy for supply to the national grid.

“It has taken a lot of time and effort to get to the stage we are at with this project but it is a very exciting time for Inetec at the moment. The Immingham plant could be the gateway to not only a UK infrastructure but a global sized network producing huge quantities of energy while also making use of a resource that nobody else wants,” says Nicholas.

Ed Mant says that in the short term, the on-site solution is likely to remain the preferred solution for 65 percent of Inetec’s customers. “You’ve got to have a lot of waste to make it cost-effective. Only a certain number of companies in the UK produce the volume of waste that would make a dedicated off-site solution worthwhile.”

But there is scope for this balance to change, and the company plans to have another plant online within twelve months, and as many as six operational by 2010. Even if these targets are reached, this would still only represent around 14 percent of the waste produced by UK food manufacturers. The potential for the project is clearly huge. Nicholas, who enjoyed a distinguished career in consulting before helping to form Inetec, underlines the contrast between the limitations of his previous career with the excitement he currently feels.

“One of the features of the consulting world is that your ability to earn income is linked to how much of a fee you can earn in a day from your own time, and if you manage someone else, how much can you earn from their time as a proportion. Generally speaking, you’ve got to work pretty hard for a relatively small amount of money. Making a widget removes this – in theory you can make an unlimited amount of money.

“I have a vision that an emerging environmental technology business could become the new Microsoft. It’s a sector that I’ve been in for 30 years and it has been intensely fragmented – the huge global player has never emerged. But if you look at the money currently coming at it from all angles, it is investment not normally associated with the environmental sector. It’s more like people who would traditionally have invested in large scale property developments.

“Very large private equity funds are jumping on the green bandwagon,” he continues. “Underpinning some sound credentials is blatant commercialisation from people who have very large sums of money. I fully expect this market to rationalise in some way – it’s just a question of when and how these huge funds are spent.”

And all of this is without considering the domestic food waste market. While it’s far from impossible that Inetec’s solution could have applications in municipal waste, Nicholas explains that it looks unlikely for the foreseeable future. “We focus largely on commercial industrial waste at this time. We’re looking at plants that have an operating radius of 50 miles as maximum travel distance. If you think of municipal waste, you have to square up to the fact that this country is embarking on a lot of PFI contracts which wipe out the waste sources for 25 years or more. We’re looking at doing the same in the commercial industrial field and taking a form of waste out of the marketplace. Having built the plants, we could take on elements of the municipal waste which are convenient to us and convenient to a local authority. But it’s not the cornerstone of our business model.”

Growth dynamics

Despite the scale and potential of Inetec’s plans, it currently remains a small company. This will all change dramatically with the new site at Immingham and a number of potential on-site contract wins. “For a company that employs fifteen people to grow into a business that employs almost 1000 people and has an employed capital asset base of the order of £750 million, there are enormous dynamics of growth. With any growth of this scale, the challenge is doing it correctly and then controlling it,” says Phil Nicholas.

With his impressively broad range of experience, Nicholas is well placed to be the one who takes the lead in this process. A qualified chemical engineer by training, he spent his early life in environmental planning, scientific advice and legislation, initially with Welsh Water.

“I’ve been involved in natural systems modelling and engineering modelling which means complex financial engineering projects. I’m fully averse with modelling those systems and you need these tools to be able to understand not just the technical aspects, but also the commercial aspects – you end up running financial and engineering models. It’s when you link the two up you get the power base of work that makes profit,” he explains.

Nicholas has been an expert witness on parliamentary select committees, written primary law and has been involved in master planning and policy formation. “That is very handy because this is a heavily regulated business,” he says. “They are hurdles that you jump over. I understand that regulators have pressures which are different to the pressures of the commercial world. I’ve sat on both sides of that fence.”

The consulting stage of his career gave him extensive exposure to not only UK but also world markets. “I became a business developer for a long time. It not only exposed me to the engineering of major projects and strategic deployment of engineering in the market place but it also got me into the international world of concluding business in different countries, from China to Eastern Europe. I competed for and won £9 million worth of business in Shanghai alone – that gave me vast experience of how to work in different commercial cultures.”

Finally, and arguably most importantly, he spent the final stage of his career before Inetec as an export promoter for the Welsh Gov. “I was analysing overseas markets and looking for domestic businesses to fit those markets. This made me think ‘if I’m good enough to analyse these businesses, why don’t I form one of my own?’ It was a life changing moment.”

With all this international experience, does Nicholas see opportunities to take the Inetec business model into new territories? “Our strategy towards larger markets is to get it right in the UK first. My attitude is that you must get it right in the economic and commercial law framework you understand and only then cut your teeth further a field where problems are much more expensive to fix. The obvious markets for us as a business are the markets immediately local to the UK, especially the English speaking ones, with Ireland being number one in that list.”