1) Technology and Engineering Solutions
The Group develops, engineers and implements plant and equipment for the production of bioethanol, biobutanol and biogas that are customised for site specific circumstances and conditions, providing a range of services for the operation and maintenance of production plants and equipment, including energy efficiency services and refurbishment of existing plants.
i. Biofuel – Bioethanol and biobutanol
Ethanol is commonly used in the manufacture of chemicals, cosmetics, and beverages. Butanol is commonly used in the manufacture of chemicals and solvents. Both ethanol and butanol may also be used as fuels.
Bioethanol and biobutanol are commonly made from feedstocks of starchy materials (such as wheat, corn, barley, potato, cassava and sweet potato) and saccharides materials (such as sugar beet, sugar cane and molasses) using a combination of both fermentation and distillation.
The Group has technologies for producing various grades of ethanol, such as normal grade edible ethanol, superfine grade ethanol and fuel ethanol. The Directors believe that the Group’s core competency lies in the design and construction of fermentation, distillation and dehydration systems for ethanol production, which are the critical processes for the production of ethanol.
Some of the main projects that the Group has undertaken in recent years or is currently undertaking are as follows:
| Project | Capacity (t/y) | Date of Completion or Estimated Date of Completion | Contractual Value (RMB‟000) Unless otherwise stated |
| Ethanol distillation equipment for Daquing Bo Run Biological Technology Co Ltd | 9,380 | ||
| Fuel ethanol equipment for Oriental Science Instrument Import & Export Co., Ltd | 60,000 | 25,000 | |
| Superfine-grade alcohol project with five tower multi-effect distillation technology for Jiangsu Huating Wine Industry Co., Ltd. | 167 T/D | October 2010 | 13,000 |
| Distillation equipment for Shenyang Tianming Alcohol Co., Ltd. | 100,000 | November 2010 | 20,000 |
| Super-grade edible alcohol project for Jilin Meihekou City Fukang Alcohol Co., Ltd. | 35,000 | March 2011 | 30,200 |
| Ethanol fuel plant for Romania Biofuel Energy SRL. | 80,000 | June 2011 | Euro180000 |
| Cassava-based edible alcohol project for Guangxi Mingyang Bio-Chemical Science & Technology Co., Ltd. | 100,000 | August 2011 | 43,173 |
| Fine-grade edible ethanol and anhydrous ethanol equipment for PT Indonesia Ethanol Industry | 50,000 edible ethanol 30,000 (anhydrous ethanol) | August 2011 | 20,665 |
ii. Biogas
Biogas refers to either a methane, hydrogen or carbon dioxide rich gas that is produced as organic matter breaks down. This gas is flammable and the plants can supply and sell clean biogas as fuel for domestic use to the local utility gas companies. Providing technology and engineering solutions for the production of biogas is a new venture for the Group. The Group specialises in the production of biogas through the treatment and anaerobic fermentation of waste by-product from the ethanol production process.
ZKTY proposes to structure its customer contracts for its biogas business so that ZKTY will share the customers’ revenue collected from selling the biogas. If ZKTY succeeds in procuring this contract structure with biogas customers, this will also provide the Group with a source of recurring revenues. In addition to domestic and utility company use, biogas can be used in many industries as fuel, materials, intermediates and additives.
As at the date of this Document, the Group has entered into the following arrangements regarding proposed pilot biogas projects:
(1) An agreement with Dongguan Xin’ao Gas Co. Ltd (which is a subsidiary of ENN Energy Holdings Ltd, a Hong Kong listed company) pursuant to which ZKTY will design and construct a bio-gas recovery and purifying plant at a beer brewery located in Dongguan, China.
(2) A letter of intent with Shenzhen City Gas Group, pursuant to which (subject to the parties entering into a formal contract) ZKTY will build a bio-gas recovery and purifying plant at a beer brewery owned by Kingway Beer Group, located in Shenzhen, China, and it is intended that the purified biogas from the plant will be sold to Shenzhen City Gas Group.
Commercial production of biogas is relatively new. However, the Directors believe that ZKTY's background and experience in designing and constructing ethanol production plants will help build a competitive strength for the Group in biogas production.
iii. Energy Management Conservation (“EMC”)
Under its Energy Management Conservation ("EMC") model, the Group offers customers with existing production facilities the ability to reduce energy consumption by modifying the customers’ existing equipment and/or installing ancillary equipment for the customer's existing production infrastructure. Under the EMC model, ZKTY bears the costs of modifying the customer's existing equipment and installing ancillary equipment in return for a share of the customer's targeted net energy saving.
The Group completed its first EMC project in 2009, with the completion of its contract with Yichang Sanxia Limin Biochemical Ltd. Under the contract, the customer is required to pay ZKTY the sum of RMB 220,000 per month for a period of sixty months from January 2010, which sum represents the parties' estimate of the net reduction in the customer's energy consumption costs attributable to the EMC modifications and installations performed by ZKTY. The Company’s total investment for this project was RMB 4,286,703.