Company updates from 2022
8 April 2022 - Spring Investor Update
Source: Celtic Renewables
'Firstly we wish to extend a very warm welcome to all our new investors following another hugely successful crowd raise at the end of 2021. The support we received was tremendous and provides further encouragement to the whole Celtic Renewables team to achieve our goals in the global strive to net zero.
It has been a challenging couple of months as, for the first time since the project started, our team had a direct Covid outbreak. With society returning to normal and with Covid numbers at a record high, it was perhaps inescapable, but key members of the team including our Projects Director and our Plant Manager were affected as well as nearly 50% of our operations and commissioning team. Within a small team such as ours, these absences have inevitably had an impact on progress but, as ever, the dedication and effort of the team have been tremendous, and we are pleased to say that strong forward momentum has resumed and the commencement of production operations is in sight.
The commissioning of the plant continues at pace, with systematic dry and wet testing of all components and systems in the plant. Vital support systems which will be crucial for maintaining sterility through the process are fully commissioned and operating well, and we recently achieved a very notable milestone with our first feedstock deliveries of pot ale, draff and reject potatoes – it showed just how far we have come since the first University lab trials.
The final stage of commissioning – large scale fermentation and distillation - is now underway, and once complete we will have our first commercial products. As previously announced, our first customer is Caldic and we have been working with them to finalise the plans and logistics for the sale and delivery of our solvents. As part of this we have jointly agreed to retrofit and brand a dedicated road tanker to deliver the three bio-based solvents: Acetone, Butanol and Ethanol, to Caldic’s UK HQ in South Yorkshire – so one day soon if you travel on the road between Scotland and Yorkshire you may see a Celtic Renewables tanker hauling the products made possible by your investment.
In addition to Caldic, we have product demand such that the output from Grangemouth is many times over-subscribed. It is therefore important that we quickly look to the future to establish larger plants to capitalise on this demand. This work has continued in-depth in parallel to the plant commissioning and we hope to soon be in a position to announce signing a Memorandum of Understanding with a partner to develop a second plant in Scotland, which would be up to eight times larger than our Grangemouth plant.
In addition to this exciting new project, we continue to develop other next stage plant opportunities in the UK & Ireland, and we have also recently signed an MoU with a company in Canada to develop the potential for our technology there, recognising the large distilled spirits, brewing and agriculture industries in Canada, all of which have residues suitable for our process.
We also have increased interest from potential partners in Southeast Asia and South America, as well as from cleantech and infrastructure investors from around the world looking to finance these next-stage projects.
We are delighted to have been recently featured in a film produced for RE.TV, the film arm of HRH Prince Charles’ Sustainable Markets Initiative. This is a key part of his work to highlight the impact of climate change and has attracted a global network of supporters. The link to the 6 min documentary can be accessed on our website, so if you haven’t already seen it grab a cup of coffee and have a look.
This is an incredibly exciting time for everyone at Celtic Renewables as we are tantalisingly close to getting into production. There is still much to do and there are a few more landmark moments to celebrate ahead, but the team and all our partners and supporters are fully committed to bringing our flagship plant to life. We will keep everyone informed as we inch ever closer to production.'
27 July 2022 - Summer Investor Update
Source: Celtic Renewables
We’re pleased to provide our summer update on progress at Celtic Renewables. The last quarter, since our update in early April, has been a mixture of “ups” and “downs”, as is the case with most early-stage scale-up businesses, particularly in these challenging economic times. Overall Celtic Renewables continues to make good progress, despite the challenges the company still faces.
The principal activity has remained the bringing into operation of the first plant at Caledon Green, Grangemouth. You will be aware that the completion of construction and commencement of production at our plant in Caledon Green has not happened within our original target timescale and budget. The impact of this has been manifested in our need to raise additional funds both from you, our crowd investors and from our large private investors earlier this year. We continue to be grateful for all our investors’ support and belief in Celtic Renewables’ unique proposition.
In terms of commissioning the plant, the team continue to make progress with the current focus on perfecting the fermentation aspects of the manufacturing process. This is the key element of Celtic Renewables’ proposition and intellectual property, and it is incredibly exciting for all involved to see the scientific, lab-based, concepts being applied at industrial scale. As anticipated, maintaining sterile conditions for our bacterial fermentations is a key challenge and we are heartened to see our extensive sterilisation protocols allow our biological process to cope with the ‘real world’ situation of a manufacturing facility. Our target is to achieve large-scale fermentations in the coming weeks, which will trigger the final phase of commissioning, of our solvent recovery system (SRS), whereby we now expect to produce products by the end of Q3, which will then be shipped to our first customer, Caldic, and product samples to an array of other potential customers
One of the main impacts of the challenges and delays at the Caledon Green plant has been in relation to the debt financing that we have drawn for the plant construction from both Scottish Enterprise and Abundance Investment. It had originally been our intention to refinance both these facilities from external sources in the middle of this year with the benefit of almost a year of production data to support refinancing discussions. As the plant is not yet fully operational, we are not in a position to secure that external refinancing.
As an alternative, we have proactively engaged with our lenders to restructure their terms and avoid triggering a requirement to repay those loans. Firstly, it is our intention to extend the Scottish Enterprise loan, with the loan remaining in our project subsidiary, and these discussions are well-advanced. Secondly, we have made a proposal to the Abundance investors (c. 1,900 investors) to convert their loan into equity in Celtic Renewables Ltd, the parent company. We are very grateful and pleased that the Abundance investors have agreed to accept this proposal. The restructure of both loans provides the benefit to the group overall of stabilising the financial position of the Caledon Green asset for the remainder of its operational life, which in turn provides a firmer foundation for Celtic Renewables’ growth plans.
The effect of the Abundance loan conversion into equity will be to dilute your existing holding slightly – the collective Crowdcube holding will reduce by c.1.4% of the total share capital table. While this is clearly not ideal and had not been a route that we wanted to take, we do believe that as investors your overall position is improved as a result of this restructure given the stabilisation of the financing of Caledon Green.
We are making good progress with regard to our growth plans. In our most recent update, we made reference to this, but we can now confirm that Celtic Renewables has entered into an agreement with Rothes CoRDe Limited (the owner of the biomass renewable energy plant in Speyside, fuelled by local malt whisky distillery co-products) to invest development time and resources in a proposition for our next plant.
The plant will have a capacity of c.8-10 times greater than that at Caledon Green and will demonstrate the capability of Celtic Renewables’ technology to operate at a larger industrial scale alongside an existing biomass combined heat and power facility at Rothes. The co-location with the biomass facility provides many operational benefits in terms of energy supply and outlet for our by-products, whereby this is a strategic opportunity to demonstrate how our process can complement existing circular economy industries. Celtic Renewables are leading the development of the project with our partners at CoRDe providing funding and site-specific input. The agreed target is to commence construction of the next plant early next year, with the expectation that it will be operational in late 2024 (within 2 years from the start of construction). This exciting development represents an excellent next-stage commercial opportunity for the company, which will generate good long-term revenues leading to group profitability.
The Rothes project meets the company’s strategic objective of expanding our technology, which has been tested and demonstrated at Caledon Green, into larger-scale projects with a view to developing a portfolio of facilities that will underpin Celtic Renewables’ proposition and attract investment for global deployment. We are particularly pleased that our partner for this plant is backed and supplied by major drinks producers, and we believe that the successful execution of this project will quickly lead to future opportunities.
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In the midst of our challenging times, we continue to attract global attention with our unique proposition being recognised for its importance in helping to achieve a Net Zero world. An interview on CNN was widely publicised in the international media - featuring on magazines, radio and TV stations as well as having extensive social media coverage. With the world opening up once more, senior Celtic Renewables representatives gave invited speeches at major international conferences recently held in Scotland, including All Energy and the World Economic Forum for Foreign Direct Investment. Celtic Renewables was the proud recipient of the Sustainability Award at the 2022 Chemical Industry Awards, and company founder Martin Tangney received the prestigious Alumni Achievement Award from his alma mater University College Cork, in Ireland.
Such global interest and recognition is a timely reminder of the importance and value of Celtic Renewables’ ambitions. We remain determined to bring these ambitions to fruition and we thank you for your continued support.