are enthusiastic about organic waste recycling
by Mike Breslin
While many sectors of the American economy
struggle to attract investment capital, it appears that investors
– particularly the new breed of sustainable investment funds
– are enthusiastic about the future of recycling organic waste.
This vast commodity stream is largely untapped and promises healthy
returns with the right business model and technologies.
The Environmental Protection Agency (EPA) estimates that we produce
approximately 246 million tons of municipal solid waste (MSW)
per year, of which nearly 60 percent, or 160 million tons can
be roughly categorized as organic waste – wood, food scraps,
vegetative debris, paper and cardboard. In food scraps alone,
the EPA estimates that over 97 percent goes to landfills.
For decades recyclers have been realizing profits from paper
and cardboard, but there is a wealth of other carbon-rich organic
material waiting to be profitably turned into renewable energy,
soils and fertilizers.
One company pioneering organics recycling on a large scale is
Harvest Power, a North American producer of renewable energy
and fertilizers from organic waste. Since its founding in late
2008 as a privately held company, it has been able to attract
a number of blue chip investors and is beginning to reap returns.
In an interview with Paul Sellew, Harvest’s chief executive officer,
he had this to say:
How much capital have you developed since your founding?
“We’ve used a combination of debt, equity and grants approaching
$200 million dollars.”
Why are investors interested in organic recycling?
“I think they view it as a resource that is under-utilized in
our society in a resource-constrained world. It makes sense to
maximize the value of these waste streams/resources through an
approach such as we are bringing to the market.”
What type of investors are you attracting?
“Along with our management team, our first investor was Kleiner
Perkins out of Menlo Park, California. We have also attracted
significant investment from European investors including Munich
Venture Partners, Generation Investment Management and Rabobank,
an international Dutch bank. Then we have a strategic investor
as well with Waste Management.”
Are you a technology and process developer, or a market developer?
“We are basically an owner and operator of organics processing
facilities. Our approach is to maximize the value of organic
waste streams. That’s a combination of producing renewable energy
from them and then using the residual from our renewable energy
technology to further process it into pelletized organic fertilizers
or a compost based soil amendment product.”
What type of customer is interested in your processes?
“Generators of organic wastes –municipalities, food processors,
retail grocery stores, large generators of food waste either
at the commercial or industrial level and certainly at the municipal
level. Right now the vast majority of states and communities
are separating out yard waste, leaves, grass and brush. Food
waste is now where yard waste was 15 years ago, meaning it is
at the beginning of being separated out of the MSW stream. Those
two streams, yard waste and food waste, are principle feedstocks
for our process.”
How many projects have you developed to date?
“We have built the largest composting and organics processing
facility in Canada, outside of Vancouver in Richmond, British
Columbia. There we will operate North America’s largest high
solids anaerobic digestion facility which is also going to be
producing megawatts of renewable energy integrated into our composting
operation. Under construction is our bioenergy facility in London,
Ontario which will be operational by the end of this year or
by the beginning of next year. We own and operate a composting
operation in Tulare County, California, and we also operate a
facility in Tullytown, Pennsylvania in partnership with Waste
Management. There will be a number of other opportunities that
we will be announcing shortly.”
How are organics developing?
“We are going into areas where the organic waste is being separated
out. We are now composting yard and food waste and then where
we have sufficient food waste we are building our renewable energy
facilities – right now we have the two largest in North America
under construction. The energy component of our story is basically
a new model that Harvest is bringing into North America. We anticipate
that the model that we are creating will be duplicated and there
are enormous growth opportunities. You just have to look back
and see the growth of the American composting industry over the
last 15 to 20 years. There are close to 5,000 composting facilities
of various sizes operating today. When I got involved in this
business 25 years ago there were only a few hundred. I think
that food waste, which ironically is produced in about equal
quantities to yard waste, is going to follow the same pattern.
There’s a large scale infrastructure build-out story here around
reprocessing food waste.”
What revenues have you generated and what do projections look
“We are a company that has about 150 employees and we have been
producing about $30 million in revenues per year. We are profitable.
This year we anticipate finishing the year at over $100 million
What is the future of organic recycling?
“I’m bullish. In a way it’s like saying we’ve just discovered
a new natural gas field, or a new oil field. Through technology
we are releasing the energy potential of organics and unlike
solar and wind which is dependent on the sun shining or the wind
blowing we are producing power on a 24/7/365 basis, baseload
power…the best kind.”