In this second blog, Managing Director Aart van den Beukel discusses new plant expansion through client acquisition.
A focus on business development
With the breakeven point for our waste recycling plant in Ashaiman, Ghana, expected by the end of 2021, our future focus is on replicating Safisana’s model in other locations.
Whilst our early focus needed to be on the technical, operational, and financial support of the Ashaiman plant, we are now putting emphasis on developing new business opportunities and growing the project pipeline for new plants.
With a dedicated team in the Netherlands that has increased in size over the last year, and working with local partners in target countries, we intend to accelerate growth – aiming to have 2 to 3 plants operational by the end of 2025.
New opportunities emerging
With growing interest in circular economy concepts and their application in developing country contexts, alongside urgency to act against the environmental effects of climate change, Safisana has received some interesting new leads.
Safisana has been approached by both commercial (private companies in different sectors) and government clients to conduct feasibility and pre-feasibility studies. These studies assess integrating Safisana’s waste to resource model into the client’s operations and support the fulfilment of core mandates.
The process has enabled us to define a set of key parameters for the feasibility of future projects:
- Location: The location of a waste recycling plant is vital to operational viability – it needs to be close to food processing industries and peri-urban communities to ensure the regular supply of organic waste and faecal sludge.
- Plant size: there’s an optimal size for new plants to ensure high levels of waste, enabling the coverage of operating costs quicker.
- Access to markets for products: the presence of a thriving and accessible market for the products developed is important; in this case compost and renewable energy.
We’re currently exploring new opportunities in Ghana, as well as Ethiopia, Uganda and Mali.
The challenges faced by potential clients
From analysis and experience we better understand the needs of a wide range of clients, and the potential for Safisana to partner with them to address key challenges.
Many local governments and municipalities in low income countries are struggling with wastewater treatment plants (WWTPs) that are too high-tech or expensive to run, are functioning inefficiently or have been abandoned due to a lack of ownership and resources to cover operational costs.
Companies in the food processing sector have low-grade and costly solutions to treat or remove the large amounts of residual organic waste produced from operations. In addition, many existing waste treatment solutions don’t fully enable companies to meet ambitions to reduce carbon footprints, treat waste in a sustainable and closed loop way or add local value. This creates an opportunity for Safisana to support them.
Safisana’s adaptable model
Safisana offers a more resilient model as a solution, that can be adapted to suit needs. One key feature is its integration with existing waste treatment operations or factories producing organic waste.
1. Model for government
Integration can be achieved through co-location with a wastewater or faecal sludge treatment plant (FSTP). Treating waste onsite is more efficient and cost-effective. Co-location reduces the capital costs involved with construction as it improves/upgrades existing infrastructure.
In addition, a Safisana plant could be built new in areas where waste solutions are needed, and the government needs to fulfil its mandate.
2. Model for companies
Safisana’s model fulfils a goal for sustainable destruction of organic waste, whilst generating valuable products for the business or local communities.
Green energy from the model can power the client’s operations at reduced cost/carbon footprint, and high-quality compost can be provided to farmers in the business’ supply chain, or the local agricultural market. As faecal waste is always needed, surrounding communities benefit from improved sanitation services.
In this way, integration of Safisana’s model provides an opportunity for companies to meet Environment, Social and Governance (ESG) and Corporate Social Responsibility (CSR) targets, with a high social as well as economic return on investment.
In both client models, Safisana is paid a fee to be the operator, and brings experience and technical knowledge from running the plant at Ashaiman.
Challenges to scale
Although opportunities are promising, we face a number of challenges in our ambitions to expand:
- There’s a lack of proof points in the sector and developing country contexts, where circular economy concepts have emerged but are still in the pioneer phase.
- Project cycles and decisions-making can be opaque and long, and procurement processes complex and hard to influence. Company client decision making in principle can be quicker but finding the decision-makers for an innovative concept like this can be challenging.
- Bespoke solution makes replication more complex. There’s no one size fits all – each site has unique requirements and technical specifications. Capex financing also differs across new plant opportunities and needs to be assessed case-by-case.
A reflection on these points is that the pathways to scale are still open and come in many forms, which opens up opportunities for Safisana, but also demands a prioritisation of leads.
Our most advanced opportunity is co-location with a WWTP in Bamako, Mali with the local utility, Angesam, as the client. Last year we completed a pre-feasibility study with positive results for the potential of a Safisana plant to make operations more efficient and profitable.
We’re now in the feasibility phase, and by December 2021 aim to have full results. It could lead to a second Safisana-operated plant in Mali, and a key milestone in our expansion plans.
We believe achieving operational cost breakeven at the Ashaiman plant later in 2021 will also serve as a proof point for the viability of Safisana’s model: significantly strengthening the business case to potential clients and unlocking opportunities for future growth.