Brown grease recycling partnership formed

Posted Oct. 6, 2010

Green Equity Holdings Inc. recently entered into a letter of intent with Florida-based clean energy solutions provider Strategic Energy Supplies Corp. to jointly build and deploy brown grease waste recycling facilities across the country. The transaction, contingent upon further due diligence review and other conditions, is expected to be finalized by the end of October.

Under terms of the deal, SESC would be tasked to initiate construction of at least three brown grease recycling plants within the first year of entering into the proposed joint venture arrangement. With an ambitious goal of deploying 50 waste brown grease recycling plants nationwide within the next five years, GEH's mission is to become the leading single-source provider of brown grease feedstock in the U.S.

According to GEH, the company will invest $1.5 million for each plant under construction in the first year in exchange for scaled ownership interests in the proposed plants. GEH would have a 70 percent ownership interest in the first plant, a 60 percent ownership interest in the second, and a 50 percent ownership interest in the third and all subsequent plants. Each plant would be capable of producing between 50,000 and 100,000 gallons of brown grease a day. A tipping fee of 10 cents per gallon would be issued to haulers that deliver the waste grease to each recycling plant location.

GEH, the funding arm of the joint venture, anticipates that approximately $6 million of total equity would be needed to develop the first operating plants and to propel the company's reach throughout the U.S., according to Raymond Dias, GEH's CEO and president of Fusion Capital Investment Corp., a majority stakeholder in the company.

"A key aim for this proposed joint venture is to capitalize on the next evolution of utilizing recyclable brown grease to create cost-effective and renewable alternative sources of energy," he said. "It's anticipated that suppliers of trapped brown grease will be able to turn an expense, like transportation and legal disposal of brown grease, into a new revenue stream, with the joint venture partners making a strategic investment in the high-growth green energy sector to increase shareholder value."

GEH plans to outsource all the operational tasks as part of the joint venture, including sales and marketing to SESC. Each plant will utilize SESC's patent-pending Thermal Depolymerization2 grease trap waste technology, which the company said is capable of separating the waste brown grease into three saleable components: oil, nutrient-rich water and organic solids.

Each facility will have the ability to annually produce between 450,000 to 900,000 gallons of oil, 650,000 to 1 million pounds of organic solids and 10 to 20 million gallons of nutrient-rich water. The oil is expected to be marketed as feedstock for biodiesel production, high-grade glycerin or a base for cosmetic products. The organic solids are expected to be marketed and sold as soil additives or fuel sources while the nutrient-rich water is anticipated to be sold to farming operations, golf courses and municipalities.

Each plant is expected to be sited near metropolitan areas between 800,000 to 1 million in population. SESC has identified its first site, but the company wouldn't disclose the specific location.