Ata Plus - Borneo Waste Industries Sdn Bhd

Borneo Waste Industries Sdn Bhd

www.borneowasteindustries.com

Borneo Waste Industries Sdn Bhd (BWI) is a waste management service provider based in Sabah, Malaysia. 

  • In April 2018, BWI executed a 30-year concession agreement to develop and operate the Integrated Waste Management Processing Plant (IWMPP) at the Kayu Madang Sanitary Landfill (KMSL), Sabah.
  • BWI aims to recycle up to 90% of waste from the KMSL by processing up to 800 tonnes per day through environmentally sustainable technologies
  • The ECF campaign is an opportunity to realise the value of this investment (or a portion thereof) through an offer for sale on a pro rata basis in a private placement exercise which is anticipated to occur within 12 months following the ECF campaign. 
  • The maximum target to be raised of RM2,999,986 for 6.7% equity in the company is based on a company valuation of RM42,023,516 for this ECF exercise.
  • The company valuation based on a net present value of projected cashflows over the concession period is approximately RM100 million which values the 6.7% equity stake offered to ECF investors at RM6.7 million.
  • In the event the offer for sale in the private private placement exercise does not materialise for whatever reason, investors will have the opportunity to participate in dividends which are expected to be declared in year 3 (or later) onwards of operations. The indicative return on investment based on a project free cash flow to the company is approximately 8 years. The project internal rate of return is approximately 29% based on company financial projections.

Campaign Closed RM 649,774 raised
144% Complete
144% of target 0 days left
Investors18
Min Target RM 450,034
Max TargetRM 2,999,986

Introduction

The aspirations of the project are threefold: economic, environmental and social sustainability.

BWI aims to maximise the recovery of incoming waste into the landfill, to enhance the market for intermediary materials and set a precedent for economically viable waste management projects in Sabah. Other aspirations include prolonging the lifespan of the KMSL as well as managing leachate generation in a sustainable manner.

Project Objectives

  • Divert up to 90% of waste from disposal to the KMSL by processing up to 800 tonnes per day which includes electronic waste (e-waste) and waste from domestic, commercial and industrial sources.
  • Sort the waste and subsequently process these waste with an environmentally sustainable technology to produce useful intermediary products for various industries.
  • Maximise the lifespan of the KMSL and reduce the generation of landfill gases that are harmful to the environment.

What We Do

The Challenge

Current KMSL conditions have created a negative social impact in the form of illegal scavenging activities, foul odour and rodent infestation. BWI will transform the KMSL into a recycling centre, with the aim of alleviating the negative social impacts on the local communities in Sabah.

Our Solution

BWI aims to design, build, finance and operate an Integrated Waste Management Processing Plant (IWMPP) around the theme of environmental sustainability by implementing the following:

  • Diversion of disposal of waste from landfill cells to preserve landfill space, through recycling and recovery activities.
  • Ensure adequate treatment of organic waste, and hence avoid hygienic hazards caused by organic waste degradation.
  • Reduce carbon footprint of waste disposal by eliminating methane emission, reducing wastewater generation, and promoting use of recyclables to substitute virgin materials.
  • Application of Mechanical Biological Treatment (MBT) system as it utilises minimal energy consumption.
  • Application of bio-based treatment in the MBT system to eliminate the use of chemicals and other synthetic materials.

The IWMPP will sort the waste at KMSL and subsequently process these waste with environmentally sustainable technologies to produce useful intermediary products for various industries.

Long-term employment opportunities will be created throughout the 30-year lifespan of the project.


 


Why Are We Different

 

Concession

30-year Concession Agreement

On 16th April 2018, BWI executed a concession agreement with the Dewan Bandaraya Kota Kinabalu (Kota Kinabalu City Hall) to operate and process up to 800 tonnes of waste at the KMSL daily.

 

Tax Incentives

At least 5 years tax exemption and 2% interest rebate

BWI is able to operate with lower financing costs, being eligible for various benefits and incentives such as Pioneer Tax Status, which comprises income tax exemption of at least 70% for a minimum period of 5 years and participation in the Green Technology Financing Scheme, which enjoys a 2% interest rate rebate.

 

Electricity Savings

Saving over RM600,000 p.a. in electricity cost 

Upon the installation of its rooftop solar panels, BWI will participate in the Solar Net Energy Metering Programme, contributing not only to a greener planet but also enhancing profit margins.

 

Recycled Plastics

Recycle waste equivalent to >800,000 plastic bottles daily

BWI effectively prevents over 800,000 plastic bottles equivalent of plastic waste from being disposed at the KMSL daily and generates a sustainable source of plastic products.


Our Revenue Model

With its own manufacturing facilities and established business partnerships, BWI will be producing the following products:

01

RECOVERED PLASTICS

Products such as High Density Polyethylene (HDPE), Polypropylene (PP) and Low Density Polyethylene (LDPE) are sold as pellets, whereas Polyethylene Terephthalate (PET) plastics are sold as flakes.

02

ORGANIC FERTILISER

Organic fertiliser is rich in essential plant nutrients, with a nitrogen, phosphorus and potassium concentration that is greater than 9%.

03

RDF PELLETS

Refuse Derived Fuel (RDF) is a renewable and cheaper substitute for coal, commonly used as fuel in energy intensive processes such as brick or cement manufacturing.

04

OTHER RECYCLABLES

Comprises of recyclable papers and metals that do not undergo further downstream processing at IWMPP and are immediately sold to other downstream manufacturers.

05

BOTTLED CNG

Biogas generated from organic fractions of Municipal Solid Waste (MSW) is compressed and bottled as Compressed Natural Gas (CNG) that can be sold for commercial and industrial use.

06

E-WASTE COMPONENTS

Extracted e-waste components such as circuit boards and chips will be sold to other downstream players for further recycling.

07

WASTE-TO-ENERGY (WTE) POWER (OPTION)

RDF pellets are fed into a gasification plant to produce power that is sold to the grid.

 

The Sale of:

Product Price Per Tonne
1. Recovered Plastics PET Flakes RM 1,300
PP Pellets/HDPE Flakes RM 1,344
LDPE Pellets RM 432
2. Organic Fertiliser RM 1,100
3. RDF Pellets RM 175
4. Other Recyclables Newspaper RM 380
Cardboard RM 330
Ferrous Metal RM 1,500
Aluminium RM 4,200
5. Bottled CNG RM 2,000
6. E-Waste Components RM 2,000
7. WTE Power (Option) Based on applicable FIT rates

Our Market Opportunity

We will be selling to long term customers globally (recyclers, power purchasers, horticulturists, etc) or through the open market in Malaysia & Asia.

Sabah Population

Sabah’s population is projected to grow at a compounded annual growth rate (CAGR) of 1.7% to reach 5.6 mil by 2033.

As Sabah’s population gradually concentrates in urban regions surrounding Kota Kinabalu, greater amounts of waste are expected to be delivered to the KMSL.

MSW Sabah

Sabah is projected to generate 3,867 tonnes of Municipal Solid Waste (MSW) per day by 2020, demonstrating a CAGR of 5.3%. 

The trajectory of Sabah’s growth in terms of population and spending power would induce greater amount of consumption of discretionary and non-discretionary goods, in turn creating larger amount of waste. 


Our Strategy

Implementation of the Project

The overall implementation of the project is divided into two main phases as detailed below:

MANUAL SORTING OPERATIONS

Oct '18
 

Commenced manual sorting operations at KMSL for period of 24 months. Cash flows generated will be channeled to fund initial working capital.

BASE FACILITIES

  • Material recovery facility
  • Anaerobic digestion plant
  • Recovered plastics plant
  • Bottled CNG plant
  • E-waste recycling centre
  • RDF pellet plant
Jul '20
 

Construction expected to commence

Aug '21
 

Construction expected to be complete

Sep '21
 

Expected to begin operating

WTE PLANT (OPTION)

  • Installation of gasification plant
Jan '22
 

Construction expeted to commence

Jan '24
 

Expected to start generating power for sale to the grid

ORGANIC FERTILISER

  • Organic fertiliser plant
Jul '22
 

Construction expected to commence

Mar '23
 

Construction expected to be complete

Apr '23
 

Expected to begin operating

Oct '23
 

Doubling production capacity with additional 37 TPD manufacturing line

ROOFTOP SOLAR

  • Installation of rooftop solar panels
Nov '23
 

Construction expected to begin

May '24
 

Expected to start generating solar energy for electricity requirements

 

The IWMPP will be developed over a period of 4 years, from 2020 to 2024

IWMPP Phase 1 IWMPP Phase 2


Our Achievements

 

BWI executed a 30-year concession agreement with DBKK to develop and operate the IWMPP at the KMSL from April 2018 to April 2048.

 

Projected Financials

Projected Financial Performance (RM, mil)

Projected Financial Performance

EBITDA Revenue

 

Revenue CAGR: approx. 4.9%

EBITDA CAGR: approx. 5.9%

Average GP Margin: approx. 64.3%

Average PAT Margin: approx. 38.8%

 

IWMPP Cash Flow Over 30-Year Concession (RM, mil)

IWMPP Cash Flow

 

Revenue

Net Operating Cash Flow

Free Cash Flow to Shareholders

 

Base Facilities is projected to be BWI’s largest revenue contributor over the concession period. In contrast, the organic fertiliser plant will be the largest contributor of free cash flows to BWI’s shareholders.


Indicatcive Usage of Funds

BWI Use of Funds

 

 

Site Preparation Costs

 

Pre-Operating Expenses, Working Capital & Repayments  

 

IWMPP’s Professional Fees


The Team

Raven Sockanathan

Founder & CEO

Raven holds a B.Sc. in Economics from the University of Michigan, Ann Arbor, USA and a B.A. in Theology from St. Paul’s Theological College Malaysia. He started his career in Hanifiah Raslan & Mohamad’s audit department and thereafter transitioned into Corporate Finance with Bumiputera Merchant Bankers Bhd. He has held various executive directorships locally and internationally in areas of trade finance & counter trade, water utility privatisation, loyalty programs, healthcare, oil & gas, and renewable energy. He was a two term former president of the Malaysian Association of the Philippines and a committee member of the Royal Selangor Golf Club for four years.

Ramkumar

Technical Director

Ramkumar holds a B.E. in Mechanical Engineering from University of Mysore, India. He has over 22 years of experience in environmental engineering specialising in Environmental Impact Assessment Studies, industrial process evaluation, process automation and controls, project management, solid waste management incl. incineration and air emission control. He is also the MD and Principal Consultant of GSR Environmental Consultancy Sdn. Bhd. with primary responsibility in project management and engineering. He was part of the consortium involved in the proposed Integrated Solid Waste Management Facility in Bahrain.

Chandrasekhar Arun

Project Director

Arun is a Class 1 Marine Chief Engineer. His career commenced as a seagoing marine engineer with Neptune Orient Lines, Singapore and thereafter he took on a Technical Ship Management role. Mr. Arun has held various senior management roles in Maju Group, MBF Holdings Berhad, and Muar Ban Lee Group. His 28 years of project management experience spans multiple countries, multiple project types and project budgets in excess of RM200 mil. Mr. Arun is the owner of Trunk Busters Sdn. Bhd. which manufactures patented Pulveriser machines.

Sitharthan Maran

Administrative & Finance Manager

Sitharthan holds a Bachelor of Science (Hons) Degree in Applied Accounting from Oxford Brookes University, United Kingdom. He has more than 10 years of experience in accounting, finance, taxation, secretarial and human resource management. Mr. Sitharthan is a member of the Malaysian Institute of Accountants and the Association of Chartered Certified Accountants, United Kingdom.

Hj Idris Bin Ali

Corporate Relations Director

Hj Idris holds an Executive Dipl. in Engineering Business Management and a Certificate in Accounting from the London Chamber of Commerce. He began his career as an Accounts & Administrative Manager in Progressive Insurance Bhd, subsequently moving to Takaful Nasional Bhd where he served as branch manager. He later progressed as Assistant Vice President in Maybank Group-Etiqa Insurance Bhd. He is currently a member of the Australian and NZ Institute of Insurance and Finance. At present, Hj Idris holds directorships in several private companies.

Christopher B. Charles

Financial Planner

Christopher holds a Diploma in Accountancy from University Technology MARA Sarawak, Malaysia. He has more than 20 years of experience in accounting, finance, and consultancy. He held several management roles in Orient Integrated Sdn. Bhd., RG Gas & Chemical (M) Sdn. Bhd., and Well Green Energy Sdn. Bhd. prior to joining BWI. Christopher is a member of the Association of Chartered Certified Accountants, United Kingdom.

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