THE TREATED WOOD MARKET DEMAND FOR OUR SMC UNITS (Global: 759-1116 units)
We have done an exhaustive Internet search and are using the best available data to size up the U.S. and global developed country market demand for treated wood disposal. Unfortunately, there is no one global source. We have scoured the internet to find the most relevant statistics. Even though many of which are 5, 10, 15 and even 20 years old, we have extrapolated estimates and made assumptions based on industry conversations we’ve had. One organization, the Railroad Ties Association, as the name would suggest, however, does a great job at providing industry statistics.
Below, we break out the total market for treated wood, both in the United States and globally for 5 key target markets and potential units we can sell: Railroad Ties, Utility Poles, Marine Pilings, Grape Stakes, and Medium-Density Fiber Board.
U.S. Estimated Market: 60-100 units; Rest of World Estimated Market: 333-444 units
The most obvious market as railroad companies have a real problem to solve and need to be as ecologically cost-effective as possible. Plus, they have legal residual liability if the creosote seeps into the water supply or causes other environmental damages. This is our first target market.
- The U.S. railroad industry replaces between 15-20 million ties each year.
- This equates to about 1.2M tons of railroad ties for disposal or recycling.
- Class I Railroads outsource tie disposal to 3rd party firms and majority (55% to 60%) sent to nearby power plants, via railcars when possible. A small minority are recycled/reused.
- We estimate about 20%-30% of ties are potentially economically and environmentally available in large clusters for our SMC Unit. Estimated 240K to 400K tons for 60-100 Units
- This does not assume any cleanup of tie piles along rights of way that are not near acceptable power plants or landfills.
- Non-U.S. Market estimated at 2.9M tons based on top 10 countries, % of wood ties used, and track mileage. Assume use of power plants as disposal method is less than U.S. due to stricter environmental regulations and/or greater transport distances. Estimated 1.5M to 2.0M tons available.
U.S. Estimated Market: 90-135 units; Rest of World Estimated Market: 90-135 units
Old utility poles are prized for reuse due to their shear size, but high transport costs provide an opportunity for our mobile solution to go where it’s formerly been cost-prohibitive. The same residual liability exists for utility companies as for railroads.
- About 150 million utility poles exist in the United States. Approximately 3% are replaced yearly.
- Of the 4 million poles to be replaced, a large number are reused or recycled by industry. However, the wood that has been in the ground (about 5-6 feet) must be discarded and sent to be disposed.
- Each utility pole weighs about 1800 pounds.
- We estimate about 400K to 600K tons (10%-15% of the 4 million tons) of treated wood are potentially viable – an estimated 90-135 units.
- No known data exists outside the U.S., but we anticipate world market is as large as the U.S. market.
U.S. Estimated Market: 45-65 units; Rest of World Estimated Market: 45-65 units
There is a big push to convert treated wood docks/piers due to recent studies suggesting long-term harm to the local marine life.
- A U.S. Academy of Science study earmarks 6.4M tons of marine waste each year. We estimate about 10% to be treated wood, or 640,000 tons.
- Of the 640,000 tons, a larger majority of this treated wood results from replacing creosote-treated marine pier pilings deemed unsafe for nearby fish, as well as retiring U.S. naval bases.
- Of this amount, we are taking a conservative 30-50%, or approximately 200-300K tons, as potentially viable for disposal via our SMC units – an estimated 45-65 units.
- We estimate the global market to be at least equal the U.S market, although no known data exists
World Estimated Market: 48-86 units
This is a far larger problem than most people realize. Grape vines in vineyards need wood stakes. These treated wood stakes degrade over time and need to be replaced. The cost to transport is high. Due to our unit’s mobility and lowest cost option, we assume the entire market would be open to our disposal solution.
- Worldwide, there are over 18 million acres of grapes being cultivated. The average acre includes 726 grape stakes. Assuming 2% needs to be replace per year, this equates to 15 vine stakes per acre or 270M stakes.
- Per a widely quoted article about the problem in Australia, 15% of their market contains creosote-treated stakes. We will assume Australia is a representative sample and will use a range of 15% to 25% for the world market
- Given each stake weights at least 10 lbs, we estimate the global replacement market to be 1.4M tons, with a range between 210K to 375K tons as treated wood. This equates to a potential market for 48-86 units.
- These units, we expect, will travel from wine grower to wine grower via 3rd party waste disposal firms.
MEDIUM-DENSITY FIBER BOARDS (MDF Boards)
World Estimated Market: 48-86 units
- Stronger and more-dense than particle board, MDF Boards contain a carcinogen and need to be disposed as treated wood. MDF Boards are prevalently used in the housing industry and are now found everywhere.
- The global annual production of MDF Board is estimated to be 25 million tons.
- Without finding the supporting data, we assume a nominal 2% of annual production will require disposal. This equates to 500K tons. To support this data, we found that the UK, in a recent year, sent 180K tons in a year to landfill.
- Conservatively assuming about 40%-60% could potentially be sent to power plants, this translates to a potential market of between 45-65 SCM units.
ALL OTHER WOOD AND TREATED WOOD SOURCES
A potential market to add to the overall treated wood market demand is roadway guard rails. Based on a study we found, about 1 to 2 million new guard rails are installed in the United States every year and an estimated 1.5% have to be replaced annually, too. Each guard rail weighs 80 lbs. If we assume 500K guard rails are replaced each year, this equates to 20,000 tons available for treated wood disposal firms using our units. (br>
A huge market exists for traditional non-toxic wood products that are sent usually to biomass power plants, as well as to landfills as the last resort. This includes the construction debris that accumulates due to various natural disasters inflicting the United States each year from Hurricane Sandy, to floods along the Mississippi to tornado destruction now commonplace in the Midwest.
We anticipate contacting FEMA and the government to be a large customer once our units perform as expected.
The global markets for wood from construction debris, wood pallets and wood found in ordinary municipal waste (if sorted out) easily exceeds 500M tons.
Overall, the global market for treated wood disposal is massive. Mostly, we focused our estimates on developed countries where both economic and regulatory impetus drives decision making. We have not factored in the fast-growing industrial BRIC countries or the emerging countries and economies in Africa.
As air and water pollution becomes even more of an issue in these developing countries, we expect low-cost solutions like ours, compared to the substantial investments needed for large biomass plant creation, to prevail — opening up larger expansion market opportunities in the upcoming years.