Agro-industries can boost their competitiveness by turning waste into new by-products
A recently launched EU project aims to make use of the agrarian waste created by agri-food industries to produce new bioproducts at times when business is less busy. Putting their teams and facilities to good use could cut down the cost of starting a new initiative by 20 percent and bring about savings of EUR 1.2 million over the first ten years.
Taking advantage of the agro-industry’s seasonal work patterns could give rise to new lines of business based on bioproducts. That is the key objective of a new 42-month European project called AGROinLOG. Among its various aims, the project plans to use agrarian waste to produce competitive fuels in the industrial and/or service sector; provide feedstock for manufacturing furniture; or act as a source of chemical products.
The initiative has been earmarked approximately EUR 6 million by the European Commission (EC) under the Horizon 2020 research and innovation programme. Led by Spanish partner, Zaragoza-based Centre of Research for Energy Resources and Consumption (CIRCE) the project consortium comprises of 15 institutions and organisations from 7 European countries. Together, they will strive to create and optimise new logistics chains and reuse the waste generated in food production.
Demonstration of Integrated Biomass Logistic Centres
The main goal of AGROinLOG is the demonstration of Integrated Biomass Logistic Centres (IBLC) for food and non-food products, evaluating their technical, environmental and economic feasibility. The project is based on three agro-industries in the fodder (Spain), olive oil production (Greece) and cereal processing (Sweden).
According to the project, these sectors represent over 10 percent turnover of agro-food industries and 30 percent of those with inherent synergies to integrate food and non-food business taking advantage of their existing equipment, seasonality and established food logistics.
These new business models will be put to the test in three IBLC’s in industries that are willing to deploy new business lines in their facilities to open new markets in bio-commodities such as energy, transport and manufacturing purposes and intermediate bioproducts in transport and biochemicals.
In Spain, the Pascual Sanz agro-industry will be deploying new lines of business at its facilities introducing agrarian sourced pellets onto the energy market to obtaining chemical compounds such as furfural and leuvinic acid from cereal waste or producing boards.
In Greece, NUTRIA a vertically integrated company that produces standardized olive oil, olive pomace oil and seed oils in all varieties of packaging will explore the production of oil, solid biomass, particleboard and chemicals based on olive tree prunings and olive pomace.
In Sweden, Lantmännen, a vertically integrated farmer’s cooperative will look to the grain-milling and animal feed industry for the production of straw-based bio-commodities for the transport sector such as ethanol and bio-oil.
Up to 20 percent cost savings in new business setup
The synergies of applying IBLCs business in existing agro-industries can have a positive impact of over 18 percent in the final product price, giving a clear competitive strength to a wide segment of agro-industries, which can exploit this privileged situation compared to a new biomass supply business built from scratch.
It is envisaged that these new methods will transform waste into a sustainable local resource while at the same time boosting agro-industry competitiveness at times when their workload is lower. These industries will be able to make the most of their existing facilities and teams to pursue a new line of business and thus mitigate the instability caused by their seasonal patterns. And they can do so using the agrarian waste created by their own actions, or from nearby areas and industries.
This way, agro-industries have the opportunity of working on a different activity for up to 20 percent less than it would cost to start it from scratch. In financial terms, the first analyses on pilot agro-industries have shown that the savings achieved could be as high as EUR 1-2 million over the first ten years. In certain cases, that figure could exceed EUR 10 million.