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INDOOR SUSTAINABLE AGRICULTURE (ISA). Mountain Sky Group Institute of Ecolonomics August, 2010. World Agriculture Today. In April, 2008, the Washington Post reported food riots breaking out in Egypt, Indonesia, Cameroon, Peru and Haiti due to extreme food shortages.

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indoor sustainable agriculture isa

INDOOR SUSTAINABLE AGRICULTURE (ISA)

Mountain Sky Group

Institute of Ecolonomics

August, 2010

world agriculture today
World Agriculture Today
  • In April, 2008, the Washington Post reported food riots breaking out in Egypt, Indonesia, Cameroon, Peru and Haiti due to extreme food shortages.
  • The Food and Agriculture Organization reports that 1 billion people go to bed every night hungry.
  • The World Bank predicts that global food shortages will occur well before any significant shortages occur for oil, water, or any other commodity.
  • Dominant monoculture farming is consuming such great quantities of water and soil nutrients that fertilizer costs have more than tripled in the last 10 years.
  • Experts agree that traditional row crop, irrigated agriculture cannot sustain the growing world population (9 billion people by 2030).
  • Little about the dominant agricultural practices in the world today is sustainable.
sustainable agriculture
Sustainable Agriculture
  • Sustainable practices emphasize a balance of “the three P’s” – Profit, People and Planet.
  • Sustainable Agriculture preserves vital natural resources including water, nutrients and minerals.
  • Diversified production reduces many typical agricultural risks (disease, pests, etc.).
  • Aquaculture is the fastest growing segment of agriculture in the world.
  • Recirculating aquaculture is sustainable and best adapted to local indoor production.
slide7

World Agriculture Today

Fertilizer costs triple in

Ten years

Food Riots over rice shortages in 2008

Traditional monoculture cannot

Produce enough food

One Billion People will die this year

From hunger

local natural food fad or the future
Local, Natural Food! Fad or the Future?
  • Today, food American’s eat comes from an average distance of 1500 miles.
  • Ten years ago the numbers of organic/natural farms in the United States and India were inconsequential. Today there are 300,000 organic/natural farms in India which is ten times more than there are in the US.
  • As little as two years ago major US grocery chain Safeway had minimal promotion of locally grown food. Today, every Safeway store has well placed point of purchase displays of locally grown, natural foods.
local natural food fad or the future9
Local, Natural Food! Fad or the Future?
  • Recent outbreaks of deadly Salmonella poisoning and other food related health issues have almost always come from imported food.
  • Numerous consumer surveys have proven locally grown food tastes better.
  • Local, natural grown food yields better health for consumers.
  • Locally grown food substantially reduces global warming.
  • Eating locally grown food greatly benefits the local economy.
indoor agriculture
Indoor Agriculture
  • Urban agriculture has been practiced around the world for thousands of years but most of it has been outdoors.
  • Indoor agriculture is a relatively new phenomena (19th century) dominated by greenhouses.
  • The demise of manufacturing in the US and other developing countries has left many abandoned buildings for use in indoor agriculture.
  • Improvement in lighting efficiencies for large indoor spaces (LED’s and Fluorescents) has increased the viability of indoor agriculture.
  • The technical improvements in aquaponics and receirculating aquaculture have made possible an assembly line approach to indoor agriculture.
mountain sky group and sustainable indoor agriculture
Mountain Sky Group and Sustainable Indoor Agriculture
  • Relevant Mountain Sky Group Business Areas
    • Environmental Consulting for Environmentally Impaired Property Issues (Mountain Sky Consulting – MSC)
    • Strategic Business Development Consulting and Management for green/sustainable/ecolonomic businesses (MSC in partnership with IOE)
    • Green real estate development and construction (Mountain Sky Developers – MSD), Four Northern Colorado Projects
    • Environmentally Impaired Property Ownership (Partnering with various entities)
    • Sustainable Agriculture research and proof of concept commercialization (Mountain Sky Ranch and Mountain Sky Alpacas)
    • Aquaculture consulting, research and development (WorldWide Aquaculture)
mountain sky group and sustainable indoor agriculture12
Mountain Sky Group and Sustainable Indoor Agriculture
  • Relevant Mountain Sky Group Partners
    • Institute of Ecolonomics (IOE) www.ecolonomics.org
    • Ecolonomic Realty Group (ERG) www.ecolonomicrealty.com
    • AquaPlanet Group www.aquaplanetonline.com
    • Industrial Realty Group www.irg.cc
    • International Risk Group www.irgco.com
    • Oceans Bounty Partners www.oceansbountyseafarms.com
    • Garden Fresh Farms www.gardenfreshfarms.com
mountain sky group and sustainable indoor agriculture13
Mountain Sky Group and Sustainable Indoor Agriculture
  • Sustainable Agriculture Leadership and Selected Staff
    • Dr. Wayne Dorband– CEO and Chairman, 35+ years experience as an entrepreneur and in aquaculture
    • Mr. Stuart Lichter– CEO Industrial Realty Group, largest private owner of Industrial real estate in US
    • Mr.Eric Kaplan– Principal Industrial Realty Group, 20+ years in finance
    • Mr. Dustin Dorband– Construction manager, directing construction at several indoor agriculture projects
    • Mr. Jerry Corbier– Principal, ERG, 30 years business operating experience
    • Mr. Steve AlvesPrincipal ERG, 10+ years real estate experience
    • Mr. D. Paul Golden – MSG Physicist and Engineer
    • Mr. Travis Hughey– AquaPlanet Partner, aquaponics pioneer
    • Mr. Joey Hundert– Canadian business leader, sustainability leader
    • Mr. Bevan Suits –AquaPlanet Partner, Industrial engineer, writer
mountain sky group and sustainable indoor agriculture14
Mountain Sky Group and Sustainable Indoor Agriculture
  • Representative Current Sustainable Agriculture Projects
    • Largest US super-intensive recirculating shrimp culture Farm (South Carolina – OPB) www.www.com
    • Feasibility Study for Large Canadian (Alberta) sustainable indoor agriculture farm on Paul First Nation Reserve (Alberta, CA – Seven Fires)
    • Proof of Concept Inland Shrimp Production and Research Farm (Colorado – OBP/IOE) www.www.com
    • Broad Scope Aquaponics Research and Development including small scale commercial production greenhouse based farm (Colorado – IOE) www.www.com
mountain sky group and sustainable indoor agriculture15
Mountain Sky Group and Sustainable Indoor Agriculture
  • Current Sustainable Agriculture Projects (cont.)
    • Local Food production education and consulting (Worldwide – AquaPlanet) www.www.com
    • Medium scale urban indoor agriculture farm (MN – Garden Fresh Farms)
    • Aquatic Species Genetic Banking (CO – IOE, Aiken Enterprises) www.www.com
    • Proof of concept sustainable aquaculture project (CO – IOE, D. Paul Golden) www.www.com
    • Large Scale Urban Sustainable Indoor Agriculture Production Projects (MI, CA, OH – IRG, OBP) www.www.com
    • Indiana Sustainable Indoor Agriculture Project (IN – ERG, IRG, OBP) www.www.com
indoor sustainable agriculture isa project
Indoor Sustainable Agriculture (ISA) Project
  • Proof of Concept – Multiple Possible US Locations
    • First Project of this type nationally.
    • Smaller scale projects using similar technology already in operation by MSG
    • MSG has access to sites having a number of characteristics that make them excellent sites for sustainable indoor agriculture
      • Close to a major population center and food market.
      • Low ceilings make building more energy efficient for indoor farming.
      • The building has unusually abundant sources of compressed air, three-phase power, floor drains and outside bay door access. All of which are optimal for indoor agriculture.
      • The campus setting of the site will make it easy to be a showcase proof of concept location.
      • Abundant additional open space at the site allows for easy site improvement (attached greenhouse space).
      • Immediately adjacent retail makes year around farmers market a good option.
indoor sustainable agriculture isa project17
Indoor Sustainable Agriculture (ISA) Project
  • Follow-up Expansion and Duplication
    • Food from this project will have only a small regional impact. Demand for all the food and associated production will satisfy less than 1% of the adjacent urban marketplace (populations 2-4 million).
    • We will have early adopter advantage and will quickly be able to duplicate the success with our first production location in an other more geographically diverse locations.
    • We will be “game changers” for sustainable agriculture like Tesla has been for the plug-in electric car.
    • We will be developing intellectual property and patented technologies that will give us sustainable long-term market advantage.
indoor sustainable agriculture isa project18
Indoor Sustainable Agriculture (ISA) Project
  • ISIA Phases
    • Planning and Design – Underway with an additional 1-2 months needed following funding commitment.
    • Site improvements (greenhouse construction and building modifications) – 6-8 months following design completion.
    • Agricultural system construction - partially concurrent with site improvements – 8-10 months following design completion.
    • System testing and equilibration – 1-2 months following system construction completion.
    • Plant production – Ongoing beginning after system equilibration with harvests beginning 6 weeks after completion of equilibration.
    • Compost production – Ongoing beginning after system equilibration with initial product sales 3 months after completion of system testing.
    • Fish production – Weekly with first harvests beginning ~6 months following system equilibration
    • Shrimp production – Weekly with first harvests beginning ~6 months following system equilibration.
indoor sustainable agriculture isa project19
Indoor Sustainable Agriculture (ISA) Project
  • Project Leadership and Staffing
    • Dr. Wayne Dorband – Project Director
    • Mr. Dustin Dorband – Construction Manager
    • Mr. D. Paul Golden and Mr. Bevan Suits – Systems engineering design and planning
    • Mr. Stu Lichter – Business strategy and oversight
    • Mr. Eric Kaplan – Project Funding
    • MS Level Farm Manager – to be determined
    • Other MSG partners and staff as needed
indoor sustainable agriculture isa project20
Indoor Sustainable Agriculture (ISA) Project
  • Production System Design
    • Utilize the existing infrastructure of former industrial site buildings, possibly adding greenhouse structures to the south sides www.www.com
    • Most buildings already has most of the needed mechanical resources (lighting, power, drainage, etc.)
    • Food and associated by-product production will occur using three independent but inter-related technologies:
      • Aquaponics
      • Super-intensive recirculating aquaculture
      • Vermiculture enhanced composting
      • www.www.com
indoor sustainable agriculture isa project21
Indoor Sustainable Agriculture (ISA) Project
  • Production System Design (cont.)
    • All three production systems have been proven by us and are being used commercially at various locations
    • Attributes of the production technologies:
      • No outside water or nutrient resources required
      • No waste or water discharge
      • No special permitting or zoning required
      • Production efficiencies 10-40 times greater than traditional agriculture production systems
      • All natural/organic
      • Operable by local labor base (farm type labor)
      • Year around production – HUGE BENEFIT
      • Local food production
      • Bio-secure, safe and with many built in risk mitigators
indoor sustainable agriculture isa project22
Indoor Sustainable Agriculture (ISA) Project
  • Competition
    • Food from 1500+ miles away, not fresh, unknown quality.
    • As an early adopter we have no local competition.
    • No local year around sources – we are not threat to traditional agriculture locally.
  • Market
    • Local (within 200 miles)
    • Mostly high end year around buyers (restaurants, retailers, etc.)
    • Some local on-site sales
    • Specialty processing possible – site has commercial kitchen
indoor sustainable agriculture isa project23
Indoor Sustainable Agriculture (ISA) Project
  • Marketing and Advertising
    • Local, regional and national PR campaign
    • Target high end regional buyers
    • Tours and visits during construction
    • Visits to other existing operations (CO, SC)
    • Engage a marketing firm locally
  • Operations
    • Local, on-site day to day management.
    • Direction from MSG professional staff
    • Local labor (30-40 FTE’s)
    • 24/7 on-site system monitoring and maintenance
    • Year around harvesting
    • Fresh delivery or pick-up by customers
    • Continuous new propagation removing risk of catastrophic failures.
indoor sustainable agriculture isa project24
Indoor Sustainable Agriculture (ISA) Project
  • Overview Financial Projections www.www.com
    • Capital costs for site improvement - $1,100,000
    • Capital costs for agriculture production system equipment $1,950,000
    • Projected Annual gross revenues (Following funding):
      • Year 1 - $421,571
      • Year 2 - $3,291,522
      • Year 3 - $3,877,946
      • Year 4 - $4,299,682
    • Projected Annual Net Profit (EBITDA)
      • Year 1 - $ ($250,430)
      • Year 2 - $1,242,668
      • Year 3 - $ 1,464,213
      • Year 4 - $1,833,197
    • Projected annual ROI of ~26% with all cash investment
indoor sustainable agriculture isa project25
Indoor Sustainable Agriculture (ISA) Project
  • Financing Options
    • Local, state, private and federal funding incentives and grants (SBIR grants, Industrial Revenue Bonds, TIF’s, ARRA funding, USDA grants, etc.)
    • USDA Business and Industry Guaranteed Loan Program
      • 80-90% guaranteed by USDA for loans made by traditional lenders with up to 80% of project costs available. Ownership guarantees required. 30 year amortization with terms of 1.0 – 2.0% above prime.
      • MSG has successful experience with this loan program for our South Carolina shrimp project (~$4.0 MM).
      • A lender has already shown specific interest in this project.
    • Private debt and/or equity capital.
  • Exit Strategy
    • Three year plan to an exit
    • Exit will most likely be a Tesla like IPO ($100 MM+) or a “home-run” strategic buy-out by either an investment group or a large company in the food industry. This is an industry changing opportunity!!
indoor sustainable agriculture isa project26
Indoor Sustainable Agriculture (ISA) Project
  • Risk/ MitigaRisktion
    • Technical infeasibility
    • Practical experience (hundreds of years for team members)
    • Lab scale, pilot scale and small scale commercial experience
    • Multiple technologies spreading the risk (several aquaponic technologies, shrimp aquaculure, vermiculture)
    • Market rejection
    • Multiple products (shrimp, several fish species, multiple plant species, multiple compost products) all currently consumed but shipped from thousands of mile away.
    • Catastrophic loss
      • Disease
      • Water quality (temperature, DO, etc.)
      • Pests
    • Bio-secure (indoors, staff cleanliness, risk management)
    • Diverse species
    • Redundant systems (air, temp, power)
    • State of the Art water quality monitoring and alarms
current isa project needs
Current ISA Project Needs
  • Capital for Existing Loan Payoff
    • $1.7 MM
  • Capital for System Design and Construction
    • $2.9 MM (see business planning document for details) www.www.com
  • Capital for Initial Operating Needs
    • $500,000 for the first 6-8 months of operation until positive cash flow is achieved
  • Local Market Knowledge and Connections
conclusions
Conclusions
  • Sustainable Agriculture Will Be the Future of World Agriculture.
  • MSG and ERG see early Adoption as a Winning Strategy.
  • We are looking for Strategic, Financial and Operating Partners.
  • Options Include:
    • Relieve our current debt pressure by providing a repayment moratorium to allow ERG the necessary time to capitalize this project.
    • Become business partners in ISIA by providing financing for the project.
    • Become operationally involved in ISIA though management participation.