Compressed coal using our own technology

Project summary

Cover letter

regarding the project for the production of pressed charcoal for use in hookahs and barbecues

Greetings, gentlemen.

With this letter, we would like to introduce ourselves and our project.

Who we are.

My name is Viktor, born in 1985, a chemist by education, and an automated control system engineer and equipment specialist by vocation.

My partner's name is Dmytro, born in 1980, a manager by education, and a specialist by vocation who knows everything and a little more about charcoal, from production to sales features.

Brief background.

Our joint activity began in 2019. My friend Dmitry and I were looking for an interesting project where we could combine our knowledge and experience. Dmitry at that time had been engaged in the production of cubes for smoking hookah using classical technology for several years, while I continued my path in the manufacture, modernization and repair of complex equipment (various automated lines and CNC machines). There were conversations over a cup of coffee about how everyone was doing, but no more. But one day the Heavenly Chancellery decided in its own way, and combined our efforts. This began the thorny path of searching for "never done before" - something that no one had done before.

The essence of the project .

Processing of any carbonized raw materials (charcoal from waste, charcoal from the shells of various nuts, in development - agricultural raw materials, such as sunflower pellets) into pressed forms (mainly cubes, but also bars). It is used for smoking hookah and frying products in a grill and a hotplate. And if everything is more or less clear with a hookah, then the grill option turned out to be a real discovery - the demand for it far exceeds the supply, especially in Europe.

Features.

During this time, a lot of research and experiments have been conducted, and not even a specific recipe has been developed, but our own system for adjusting any raw material to produce a product of the highest quality with predictable characteristics. This cost a lot of effort, time and money (about 250 thousand USD was invested in the project, this is equipment and a lot of experiments), but now we have two ready-made concepts for waste-free production:

Hookah coal:

1. Can be made from any raw material

2. It has no extraneous effects on the taste of tobacco (as one example of feedback, the words of a respected representative of the Arab world - “For the first time I don’t feel any extraneous notes in the smoke, the taste of tobacco is absolutely pure, it doesn’t irritate the throat and doesn’t dry out the mouth - I just don’t believe it.”

3. High productivity, significantly lower cost and absolute predictability compared to classic screw technology.

Charcoal for barbecue:

1. Can be made from any raw material

2. It has a high efficiency (2.2-2.5 times more) compared to conventional coal, and also burns out completely.

3. DOES NOT FLASH (at all) when any fat in any volume gets on the surface of the hot layer, which is nonsense for ordinary coal/products of its processing.

4. It has a much more uniform burning and heat transfer characteristic - there are no more or less hot centers, in the form of coals of different sizes or types of wood. The cube behaves as one continuous heated surface throughout its operation.

5. Regarding the time of this work, the effective value for a 27 mm cube (the most popular today) is at least 4.5-5 hours.

6. It ignites quickly and evenly, is easy to use, is absolutely safe to transport (!), including over long distances, is environmentally friendly, and is predictable

7. For premium HoReCa, a completely odorless (!) production option is possible when kindling and burning. As an example, a review from a master chef at one of the best grill restaurants in Azerbaijan — “I’ve never seen anything like this, 10 out of 10”

Unique advantages.

The biggest advantage of this project is the use of renewable sources of raw materials for production. From the shell of any nut, you can get fuel for boilers (in the form of pellets) at best. Manufacturers, of course, try to produce a hookah cube from walnuts, but in the classic screw technology, this requires adding a significant amount of chemical additives (this is felt both during ignition and smoking). With our technology, a quality product with high user characteristics is produced that the market needs, without major harm to the environment, namely, cutting down trees for their subsequent carbonization (you can use waste from woodworking industries). In other words, instead of destroying a valuable resource (wood), non-core raw materials are converted into another important energy resource (the well-known European concept of Waste-to-value).

Main consumers

The greatest interest is currently observed from representatives of England, Germany and the Benelux countries [naturally with a significant Muslim diaspora, as the largest masters and consumers of grilled products and hookah smokers]. The demand is constant, so now funds are needed specifically to build an adequate production capacity to meet demand. Yes, at the moment there is a request for the supply of at least 44 tons per month specifically to London and Düsseldorf (one truck per warehouse in each city, in other words). But this should be a stable contracted volume each month, which we cannot currently provide (given that London is openly talking about an additional 0.5-1 truck per month, “if you can 100% guarantee it for the whole year)”.

Economy

At the moment, the optimal level of investments depends on the configuration and is: optimum 130-150 thousand USD; saturated optimum 350-400 thousand USD (it has its own strategy, this is a separate topic for communication). This amount includes the manufacture of equipment for carbonization, the production of a briquetting line (with a hot reserve), working capital for the purchase of the required amount of raw materials (a minimum of 3 months' supply).

Production characteristics

1. Time to launch — 14-18 weeks

2. Volumes — 80-120 tons of finished products per month

3. Profitability before income tax - from 250 USD/ton

4. Payback period — will not exceed 24 months from the moment of launch (more realistically 16-18)

Financing stages

1. Start - production of our equipment (at cost) and purchase of third-party equipment (50% advance) - 50%

2. After 7-10 weeks (possibly earlier) - upon equipment readiness - 20%

3. Purchase of raw materials — 30%

Development prospects (currently in progress)

1. Using pellets from agricultural raw materials (then the resource becomes unlimited in principle)

2. Use of pressed coal in metallurgy (there is only one requirement - stable carbon and no sulfur - which is more than realistic for nut products)

3. Production of activated carbon (using mini-activation modules in furnaces, with activated carbon as the main product; the residue from activation, which is 50-60%, is processed using our technology)

Conclusions

1. This project is extraordinary and non-banal — in accordance with the initial concept “no one has done it like this before.”

2. This is not a startup, it is a fully developed process over the years with an understanding of all possible nuances - 99% obtained through our own efforts and costs.

3. Currently, demand and sales channels for most of the products produced have already been formed.

4. High liquidity, fast ROI (100%) and prospects for the development of this topic are offered.

5. We note the simple scalability and the possibility of relocation to any point in Ukraine/the world.

We look forward to fruitful cooperation.

With respect.