CERT.NO. 3400 AS/NZS ISO 9001 & ASSOCIATES Our reference: PreFeasibility Study Establish Solid Waste Recycling Plant.DOC 25 Septemmber 1995 PRIVATE & CONFIDENTIAL FINAL REPORT PRE-FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A RECYCLING PLANT PETEMIC TECHNOLOGY PTY LTD "PETEMIC TECHNOLOGY PTY LTD "1 PREFACE This Pre-feasibility Study Final Report sets out, inter alia, an assessment of the proposed establishment of a recycling plant (" the Project ") to be carried out in the vicinity of Caboolture Shire, south-east Queensland, under the auspices of Petemic Technology Pty Ltd (" the Company "2) - an organisation incorporated in the State of Queensland. This Project, initiated by Mr Michael Walsh, General Manager of Petemic Technology Pty Ltd (" the Client ") has been carried out utilising the services of Gary O Garner & Associates (" the Consultant ") 3 as a Regional Economic Development (" RED ") Program Feasibility Study, as arranged through the Sunshine Coast (Mooloolabah) Regional Office of the Department of Business, Industry and Regional Development (" DBIRD "). 1 A.C.N. 064 320 314 2 The term " Company " as used throughout this document is a generic term used to describe the organisation "Petemic Technology Pty Ltd" 3 Gary O Garner & Associates are the “lead consultants” for the Project. Input has also been provided by Mr John Mackenzie of Sloane, Cook & King Pty Ltd (market analysis and environmental considerations); Mr Peter Stone of Chemquip Pty Ltd (various input in relation to technical engineering matters); Ms Helen Gibson (various sections of this Report, and assistance with specific matters relating to local Council requirements, raw materials, site assessment, and strategic planning); and Coller, Shannon, Rill & Scott (licensing requirements). ••• Corporate member: Australian Institute of Agricultural Science ••• Registered Valuer ••• Member: Australian Association of Agricultural Consultants - AGRIBUSINESS & MANAGEMENT CONSULTANTS & VALUERS - PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT PRE-FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A RECYCLING PLANT Page 2 Section TABLE OF CONTENTS TABLE OF CONTENTS PREFACE............................................................................................................................1 TABLE OF CONTENTS .........................................................................................................2 EXECUTIVE SUMMARY & RECOMMENDATIONS ................................................................8 MARKET ANALYSIS .......................................................................................... 8 Recommendation ..................................................................................................... 9 PRODUCTION, EXAMINATION OF ENVIRONMENTAL ISSUES, & SITE ASSESSMENT .......................................................................................... 9 Production, Labour Skills and Other Resources ...................................................... 9 Site Assessment .................................................................................................... 12 Environmental Issues............................................................................................. 13 COMMERCIAL VIABILITY ............................................................................... 14 Recommendation ................................................................................................... 16 LICENSING OF THE TECHNOLOGY............................................................... 16 Protecting The Petemic Technology ...................................................................... 16 Recommendation ................................................................................................... 17 INSTRUCTIONS/TERMS OF REFERENCE ...........................................................................18 TERMS OF REFERENCE................................................................................. 18 Introduction to Consultancy Requirements ............................................................ 18 Study Objectives .................................................................................................... 18 CONSULTANT’S RESPONSE TO THE T.O.R. & GENERAL PROJECT OVERVIEW ............................................................................................. 20 Introduction............................................................................................................. 20 FURTHER BACKGROUND & FEASIBILITY STUDY CONSIDERATIONS ...... 21 PROPOSED ACTIVITIES ................................................................................. 22 Required Evaluation (Brief) .................................................................................... 22 PURPOSE OF CONSULTANCY....................................................................... 23 OBJECTIVES ................................................................................................... 23 PROJECT SUMMARY........................................................................................................25 S.W.O.T. ANALYSIS #1.....................................................................................................26 STRENGTHS.................................................................................................... 26 WEAKNESSES................................................................................................. 26 OPPORTUNITIES............................................................................................. 27 THREATS ......................................................................................................... 27 25 Septemmber 1995 PreFeasibility Study Establish Solid Waste Recycling Plant.DOC PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT PRE-FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A RECYCLING PLANT Page 3 Section TABLE OF CONTENTS S.W.O.T. ANALYSIS #2.....................................................................................................29 STRENGTHS.................................................................................................... 29 WEAKNESSES................................................................................................. 30 OPPORTUNITIES............................................................................................. 31 THREATS ......................................................................................................... 32 STRATEGIC MANAGEMENT PLAN ....................................................................................33 STRATEGIC OBJECTIVES .............................................................................. 33 MISSION STATEMENT .................................................................................... 34 ACTION PLANS ............................................................................................... 34 MARKET PROSPECTS FOR THE PETEMIC SOLID WASTE RECOVERY PROCESS ...............38 THE MARKET SURVEY - COMMENTARY....................................................... 38 INTRODUCTION & OVERVIEW ....................................................................... 38 BACKGROUND................................................................................................ 43 POTENTIAL FUTURE WASTE PRODUCTION ................................................ 44 WASTE DISPOSAL COST ISSUES ................................................................. 46 STRATEGIC OPTIONS IN RELATION TO RAW MATERIAL AND MARKETS ............................................................................................... 50 SUPPLY AND PRICE OF CONSTRUCTION MATERIALS IN THE SHIRE OF CABOOLTURE.................................................................................. 54 SUPPLY AND PRICE OF AGGREGATE AND CONSTRUCTION MATERIALS IN SOUTH-EAST QUEENSLAND ...................................... 57 Regional Supply & Demand ................................................................................... 57 Value of the Industry .............................................................................................. 58 Alternative Sources ................................................................................................ 59 USE OF THE PETEMIC PRODUCT, AND COMPETITIVE ADVANTAGE ........ 60 The Price of the Product or Service ....................................................................... 61 The Quality of the Product or Service .................................................................... 62 The Availability of the Product or Service............................................................... 62 Exclusive Rights or Concessions Which Might Limit the Competitors Rights to Obtain a Raw Material, or Supply a Product or Service to the Marketplace ................................................................................................. 63 CONCLUSIONS................................................................................................ 63 Sales Potential ....................................................................................................... 66 SITE ANALYSIS ................................................................................................................68 PROSPECTIVE SITES ..................................................................................... 68 SITE LOCATION CRITERIA............................................................................. 68 THE NARANGBA INDUSTRIAL ESTATE......................................................... 69 Alternatives to