‘It’s like climbing a mountain; every time you think you’ve reached the summit, you discover you still have some way to go,’ says Hans Cool, Financial Director of Alucha. Managing Director Gijs Jansen nods in agreement: ‘There were thousands of times when we could have called it a day, but our motivation kept us going.’
These two Dutchmen moved to Barcelona in Spain some time ago and have spent the past five years working on an installation to separate the plastic and aluminium from the pulp that is left over when paper fibres have been extracted from drinks cartons.
This facility is currently being built on the premises of Stora Enso Barcelona, one of the world’s largest processors of drinks cartons; around 250 tonnes of cartons arrive here every day, making a grand total of 60 000 tonnes a year. Half of it comes from Spain, 20 000 tonnes from the south of France and another 5000 tonnes apiece from Belgium and Portugal.
The system delivers not only a top quality paper fibre that Stora Enso can use for making cornflakes boxes among other things, but also a mucky porridge of plastic and aluminium. Until recently, this gooey mess was sent to landfill – an expensive business.
Mr Jansen confirms: ‘Every day, six or seven lorry loads head for the tip. It costs Euro 50 a tonne to get rid of that stuff. So Stora Enso has to fork out Euro 1-1.5 million a year.’
Converted into income
But once the Alucha plant is operational, these costs will be converted into income. The facility will be able to process the residue from 30 000 tonnes of drinkscartons each year. ‘That amounts to around 9000 tonnes, containing more than 1000 tonnes of aluminium,’ says Mr Cool.
After recycling, this aluminium – which will be formed into briquettes – will have a purity of around 95%. He continues: ‘Aluminium was selling at dramatically low prices last year. It is raising approaching US$ 2000 a tonne at present. We won’t get as much as that. We have spoken with operators in the sector and they are prepared to pay between 75% and 80% of the market rate.’
‘The recycled aluminium will deliver returns of around US$ 1.5 million, while the plastic residue is converted into oil and gas to generate steam.’
If the price remains stable, that will deliver returns of around US$ 1.5 million instead of a similar amount in losses. But that is not all the installation does: it also converts the plastic residue into oil and gas to generate steam for drying paper in the factory. That will make a substantial difference to Stora Enso’s energy bills.
‘So everybody benefits,’ says Mr Cool. No wonder that both Alucha and Stora Enso are eager to clear away the obstacles that have loomed in recent years. Whether they are on the road to success should become clear in the months ahead.
The technology is the responsibility of Carlos Ludlow Palafox, the third partner in the business. Mr Palafox is also the Chief Technology Officer – but one located at a distance given that he is attached to Cambridge University in the UK as a research associate. It was here that he gained a PhD with distinction in pyrolysis technology.
And pyrolysis lies at the heart of the entire process that Alucha is building. Mr Jansen explains: ‘The plastic/aluminium residue is thermally treated in an oxygen-free reactor. Plastic vaporises when it is heated to a certain temperature. Nothing happens to the aluminium, so we can easily extract it at the other end.’
‘The gases consist of methane and longer, highenergy chains. The gas condenses when you lower the temperature. That’s how you get the oils, which are fine for running the installation, but first we turn them into steam.’
Mr Cool takes up the story: ‘This is what Stora Enso wants. And it’s an easier route for us. This is cutting-edge technology, so we first need to make sure that all parts of the process work. Once everything is up and running, we will take samples to assess the quality of the oils and gases and decide on the next stage.’
‘The concept can then be applied in different ways in other factories. You could, for instance, add an engine and generate electricity. But that’s a lot harder to do than making steam.’
Eyeing second phase
The installation has come a long way to get to its present stage. The washing process is more or less operational, and all eyes are now on the second phase: building the reactor. ‘The washing process has been working since last year and has already generated returns,’ Mr Cool explains.
‘The plastic and aluminium waste is very wet and dirty. It is rinsed and dried in the washing process, so it comes out clean. The volume is reduced at the same time. It can now be used as fuel or for other purposes like making furniture. Stora Enso sells it on and earns some money from it, but the true value of this material will not be realised until the whole factory is ready.’
‘The plastic and aluminium waste is very wet and dirty. It is rinsed and dried in the washing process, so it comes out clean.’
They are now waiting for a storage depot to be built for the cleaned plastic and aluminium pulp. The tanks for storing oil and gas are ready. There is one installation for processing gas. Another tank contains agents to facilitate the pyrolysis in the reactor. There is also a brand new boiler in an adjacent building.
Mr Cool says: ‘We have more or less all the equipment we need for the second phase. It’s the little things that we are waiting for, such as special valves and pressure meters. The delivery time is six weeks. But details are important. You can’t start without them.’
Suddenly, Mr Jansen exclaims with conviction: ‘The installation will be up and running by Christmas.’ Mr Cool reacts with surprise: ‘Oh, do you really think so?’
Mr Jansen responds: ‘It won’t be a question of pressing a button and hey presto! All the systems will have to be tested first. That calls for a whole programme, split into steps, that you take one at a time. It’s a pretty complicated business. But we plan to start in December.’
Mr Cool continues: ‘We spent months on the washing process and we’re still making minor adjustments. These things take time. You don’t get maximum production at the click of a switch.’
One problem is that all sorts of other rubbish are still to be found in the plastic and aluminium pulp, including PET bottles and pieces of the steel wire that holds the bales of cartons together. Mr Cool laments: ‘All of that ends up in the washing process and clogs the system.’
How it all began
Mr Cool and Mr Jansen knew from the start that this recycling process would not be easy to develop. The former observes: ‘Alucha is a combination of two words: aluminium and luchar, the Spanish verb meaning to fight or struggle. We always knew this would be a battle. We were right, but we’ve been on the winning side so far.’
Mr Jansen chips in: ‘The technological development was fast and dynamic. Carlos is the technological mastermind. He was already figuring out ways of processing this kind of waste when he was a student. A friend of his who was on our MBA programme teamed up with another student to write a business plan for the project.’
Mr Cool adds: ‘All the business plans were assessed by a group of investors at the end of the year. And this plan won. But those two students came from very rich Latin American families and had no further interest in recycling. So, being a bit opportunistic, we said: “If you aren’t going to do anything with that plan, we’d like to use it.”
‘Then we looked up Carlos in England. At that time, the process was still in the laboratory phase – test tubes and that sort of stuff. Carlos told us: “If this technology is viable on a large scale, this plan could be interesting, but it will take years to get to that stage, so my advice is to invest your energy in something else.” We said OK, but we wanted to do one thing: scout the market for potential customers.’
Without customers, the whole idea would be a non-starter, acknowledges Mr Cool. Contact was made with the paper factory because this was where the drinks cartons ended up after people threw them into the yellow collections bins located throughout Spain. The management team admitted that they desperately needed a solution for the plastic and aluminium residue.
‘You might be interested to know that this is a colossal problem for us that we have been trying to solve for years.’
He recalls: ‘We bluffed a bit when we met the director; we told him we had a technology that could solve this problem. We talked a bit, then there was a silence and he said: “You might be interested to know that this is a colossal problem for us that we have been trying to solve for years. We’ve already built a trial installation. Perhaps you’d like to see it?” You bet we wanted to see it!’
The visit was hastily arranged for that same afternoon. Mr Cool continues: ‘It was a big installation, more than a hundred times bigger than the one Carlos was working on. But development had ground to a halt because the engineers had retired and the knowledge was no longer available. They had tried out a few things – tests and such like – but they were virtual novices, with no knowledge of the underlying chemistry.’
Carlos also flew over to take a look. ‘His jaw dropped when he saw it because he thought he was the only person working on this kind of technology,’ says Mr Cool. ‘That’s when we started the business in earnest.’
A lousy Christmas
The years that followed were anything but easy. Among many other things, Mr Cool and Mr Jansen had to invest a lot of time and energy in negotiating the financial aspects with Stora Enso. The former comments: ‘There are fixed procedures for everything. This project presented them with a bit of a dilemma. They wanted it but couldn’t figure out where to fit it in or how to pay for it. Eventually, they entered it under venture capital.’
But then came a reorganisation. ‘Suddenly, between one day and the next, there was no more money for the project,’ says Mr Jansen. Recalling the fact that the news was broken to them on Christmas Eve, Mr Cool adds: ‘And what a lousy Christmas it turned out to be. A million and a half had already been invested in developing the technology. The environmental licence had just been granted.’
Mr Jansen continues: ‘We had reckoned on six months for the licence to come through, but it took two years. It was horrendous. It took a whole year to even start processing the application. We had a meeting with some official with a huge pile of papers who started going through everything from scratch – tiny figures that weren’t at all relevant. It then took another year to actually get the licence.’
According to Mr Cool, they were doubly unfortunate because all this happened in the run-up to municipal elections. ‘People were campaigning, so everything was put on hold,’ he explains. ‘And to make matters worse, a new council was voted in. They spent the first few months reading all the files. Only to be expected I suppose, but it led to further complications.’
After Christmas, the search began for new investors. Eventually, the factory decided to finance the project itself. ‘It isn’t exactly their line of business, so it was good of them to stick their neck out,’ Mr Jansen acknowledges. ‘The only condition was that they would own the installation. We would retain the technology rights and claim the royalties – exactly what we had wanted right from the start.’
It will cost a total of Euro 6.5 million to develop this recycling process: this includes a grant of around Euro 1 million from the EC’s LIFE fund.
Recently, Alucha has found other investors, including the Finaves investment company at Spain’s IESE Business School where Mr Jansen and Mr Cool gained their diplomas. ‘We were overjoyed to get financial support in the middle of the economic recession,’ admits the former.
It will cost a total of Euro 6.5 million to develop this recycling process. Another high point was the grant of around Euro 1 million from the European Commission’s LIFE fund which supports environmental projects.
Mr Cool enthuses: ‘170 applications were submitted from Spain alone. Only four were approved, and we were among them. These projects are rigorously assessed. Different academic experts are called in to evaluate the technological viability. Basically, the EC stamp of approval won some credit for the project. And it helped us in our dealings with Stora Enso.’
Alucha was awarded the LIFE grant on condition that it collaborated with three European partners. In the end, Stichting Marktwerking Drankenkartons (SMD) of the Netherlands; aluminium processor Konzelmann of Germany and General Electric Jenbacher of Austria were selected.
Jenbacher specialises in building engines that generate electricity with specific types of gas. Mr Cool says: ‘They are seeing more and more gas production systems that are based on pyrolysis. In addition, they are also exploring ways of adapting engines so that they can run on these gases.’
‘Also, they extracted some gas samples during the try-out phase to find out whether they could be used in their engines. Now it is a question of waiting till the installation is operational. After that, we can move on with the co-development of gas engines.’
And he adds: ‘Konzelmann may buy the recycled aluminium in the future. So far, they have been advising us on key questions: Does the industry want the aluminium in the state that it comes out of the reactor? Does it want a purer version? This company knows the answers.’
For its part, SMD is helping by drawing attention to the project in other EU member states. Mr Jansen elaborates: ‘Once the installation is operational here, we intend to do the same thing in other countries. That is another EU condition. They give you a grant to help you start a factory but you have to make the technology available to the rest of Europe.’ He smiles and says: ‘No problem at all. Only too pleased.’
‘We have also been approached by companies that process other sorts of packaging that contains aluminium and plastic.’
Mr Cool adds: ‘We have spoken with a few companies, but they have all said: “First, show us that it works.” We have also been approached by companies that process other sorts of packaging that contains aluminium and plastic: toothpaste tubes, for example, and the packaging for coffee, crisps, dog and cat food, and dried soup. It is difficult to retrieve this type of packaging from consumers.’
‘However, manufacturers often have a failed batch, when a sizeable part of the production is lost and ends up with companies that buy up failed batches in order to extract the aluminium. These companies give us a call now to say that they have piles of packaging coated with aluminium and plastic and need help with the processing.’
And he concludes: ‘There are lots of things we can try. But first the factory has to get off the ground.’