Scott Dyer with BayoTech

(Scott Dyer) I’m Scott Dyer with BayoTech. I am the Business Development Director, Vice President of Business Development for BayoTech. We make nitrogen fertilizer plants. These plants are unique. The plants come in three shipping containers already preassembled, they get plumbed at the destination and within a short period of time you’re making nitrogen fertilizer. Now, you think this isn’t really valuable. The real question is, this is enough to produce about 16 million bushels of corn. Putting the product, putting the manufacturing at the point of consumption, basically, eliminates all the transportation logistics of getting the product from where it’s manufactured to where it’s consumed. In the United States historically we’ve imported about 15% of the nitrogen fertilizer that’s consumed in the United States. We know that number is declining based on the economics and the cost of gas in the United States. However, the majority of the product comes in through New Orleans, it goes up the Mississippi River, gets handled a number of times before it gets to the end destination. Each time that product gets touched; somebody takes the margin in the transportation and cost. The cost difference between natural gas in the gulf versus natural gas anywhere else in the country is very, very marginal. What we’ve done is we’ve taken the process; we’ve re-engineered the reactor to where the reactor can be shrunk to where it can go under a container. Our capital cost for what we’re doing is about $15 million versus $2-3 billion for a large plant. Well, there are pluses with the large plant but that technology does not shrink to the scale that we’re after. Our technology comes from Sandia National Laboratories where they work on nuclear programs and energy efficiency. We licensed the technology out of Sandia. We’ve repurposed it to make hydrogen, ammonia and urea. By doing that we are controlling the capital cost so our capital cost per unit of output is lower than the large plant. But it also allows us, by changing the reactor; it allows us to take that to the point of consumption. Our business model is different than the $2-3 billion plant because, in a $2-3 billion plant there are only about five companies in the world that would make a $2-3 billion investment. Our plants cost $15 million, which means that they can be owned at the local level. When we look at it from the egg supplier, when we look at it from the grower’s standpoint, one of their primary costs to raise their crop is the cost of nitrogen fertilizer. We would allow them to profit by their consumption of nitrogen fertilizer, which makes our offering unique and valuable at a local level. Because if we’re shipping, 50% of our nitrogen fertilizer is coming from offshore, that money goes offshore. In this way, that money can circulate within a local economy bringing jobs and economic opportunities within the local community, which substantially increases the viability of rural America. We’re in the development process, right now. We’re prototyping today in Albuquerque. It will be two years before we have our production system in place. We already have the output sold for 100 of our production facilities. It’s not a matter of whether the product can be sold. We’re not in the business of if you build it they will come. We’ve already taken care of who’s going to consume the product. It goes through the standard distribution network that’s already in place. We’ll be up and operational and in place in two years.

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