Kior announced their quarterly results. They had bigger losses and lower revenues than expected. The stock analysts asked their questions during the earnings call. Then they found “green” linings in the BS that was spoken.
I simply picked up that Kior is still struggling to keep the plant running and has not done any run at full throughput of the pine chips. They operated for 41% of the available time in the quarter and at 50% to 60% of capacity. This is a little less uptime than last quarter that was 43%. The 55% capacity is above the 40% of the previous quarter.
At 100% capacity Kior will feed 500 tons a day of wood chips. In the quarter they fed 10,373 tons of wood chips. In the previous quarter they fed 7,826 tons of wood chips using the above capacity and uptime figures. Therefore they fed an extra 2,547 tons of pine chips quarter to quarter. Pine chips cost about $73 a ton so the added feedstock cost was approximately $185,000.
The CFO stated the following in the earnings call:
We know the added feedstock was only $185,000 and the utilities, maintenance and other costs were a lesser extent in the added $2.3 million. Therefore the big added cost is catalysts. Based on the above the added catalyst cost probably $1.5 to $2.0 million.
This is very disheartening as catalysts should be able to reused over and over but it looks like Kior goes through catalysts in a rapid fashion. The definition of a catalyst is that it is an ingredient that is not consumed in a reaction.
Kior did not provide the data on the actual increase in raw bio-oil out of their FCC unit but this probably was in the range of 75,000 additional gallons quarter on quarter (30 gallons per ton times 2,500 tons). This implies that catalyst costs alone are $20 to $25 per gallon of raw bio-oil. This is a fundamental question the analysts should ask. If the process after a year of lining out still needs $20 to $25 per gallon of catalysts to produce a gallon of bio-oil, then the process itself is flawed.