The project idea is to develop peat deposits in the Russian Far East. The final products are peat-based natural fertlizers (30,000 tons/year) and peat fuel pellets (10,000 tons/year). The fertiizer is demanded in Japan (given Fukusima), and the fuel pellets are demanded in Korea. Funding is needed for purchasing equipment and technology.
Our company started development of peat deposits in the territory of Primorye Russian Far East. It is a start-up company, a respective License was issued to us in 2007.
To date, all design documentation is ready for the start of peat extraction. Approved reserves amount to 430 000 tons. The factory can produce up to 30,000 tons of peat per year (for agricultural purposes ) plus up to 10,000 tons of peat fuel pellets. Both types of products are either green technologies or used for green (agro) purposes.
The elementary composition of our peat is as follows: nitrogen – 2,29%, phosphorus – 0,45%, potassium – 0,42%. The ash content is 17,82%, and the moisture – 80,36% on total weight. pH level is 4,3. Therefore, our product is a pure natural fertilizer for making growing, suitable for vegetables, horticultural plants, trees, etc. It can now be extremely useful for restoration, reclamation and recultivation of lands and soil, damaged by salted seawater from tsunami, or by any other causes, including radiation. As you certainly understand this product shall be highly demanded in Japan these days. Japan and Korea are considered as key markets.
We already have a set of requests for peat fertilizers from Japanese and Koreans companies. We also have one potential customer form New Zealand, and an inquiry from Korean enterprise for fuel briquettes (pellets).
The peat delivered to end buyers shall be packed under the polyethylene film (Big-Bag / FIBC - Flexible Intermediate Bulk Container alike), placed on a EURO pallet (dimensions from 1.20m x 0.80m to 1.10 x 1.20 m), height of 2.2 - 2.4 m, volume of 4.5-6m3.
Investments are needed to purchase equipment and technology. The total amount demanded is USD 4.3 mio.
Payback period (РВР): 2,6 years
Loan repayment (RP): 4,0 years
1. The deposit is located just 15 km away from the federal highway. There are field roads, which lead directly to the deposit: i.e. sufficient infrastructure is already available at no expense to the project participants. Only equipment purchase requires funding.
2. The production base for processing and production of the finished product is located in the vicinity of the deposit itself just 500 meters away from the nearest road.
3. The production base is only 500 km away from Vladivostok seaport thus saving costs on transportation of final product. Vladivostok seaport is around 800 km from major ports of Japan and 700 km from ports of Korea. Thus transportation costs shall be much lower compared to peat from North America or Baltic states.
There is an opportunity to successfully enter the Japanese market - it's close to us geographically, it has problems with soil due to recent tsunami and Fukusima contamination.
The Korean market is also attractive. Koreans are switching to peat pellets as a fuel source as they wish to reduce CO2 emissions in accordance with the Kyoto protocol.
There are Canadian competitors in the peat sector, however, our climate is much favorable compared to Canada where was a rainy summer in 2011 resulting in poor harvest of peat.
Geographic location, closeness of Japan and Korea as key markets are making us feel confident in our project.
Buildings and facilities: USD 119 365,60
Construction works: USD 62 277,70
Equipment purchase: USD1 184 986,02
Equipment installation: USD118 498,59
Machinery purchase: USD2 799 961,28
TOTAL: USD 4 285 089,20