Northstar Clean Technologies Inc. (TSXV:ROOF) is the only publicly traded company that has anything to do with cleaning up North America’s giant asphalt shingle environmental mess
Keith Schaefer, Investing Whisperer | August 26, 2021 | SmallCapPower: Newly-listed Northstar Clean Technologies Inc. (TSXV:ROOF) is ready to solve one of North America’s biggest environmental problems—the tens of billions of pounds of dirty asphalt shingles lying in huge mountains all over the continent.
(The following article was originally published on investingwhisperer.com)
And I think they are going to make a mountain of cash doing it. They make money taking in raw product, and from the finished products they ship out.
Northstar’s Empower facility in Vancouver B.C. is anticipated to be fully operational this year. The Market is desperate for this kind of product—in fact, a large multi-national construction company has said they want every drop–100%–of the asphalt oil offtake.
And that’s just for the first plant. The second plant is being scoped now, and expansion opportunities are EVERYWHERE. The market opportunity in North America is $2 billion plus annually and there isn’t a viable competitor to be seen.
Northstar is the only publicly traded company that has anything to do with cleaning up North America’s giant asphalt shingle environmental mess.
My job is to find you the micro-cap businesses with the biggest blue-sky scenario.
Northstar has the only solution that every city and county landfill needs…..so there’s a lot of big blue-sky potential in the very near term.
Northstar Has a Textbook Circular Economic Solution
Nobody has been able to make a dent in stopping those 11 to 13 million tons of shingle tiles–over 20 BILLION POUNDS–being added each and every year to the already massive piles that are bloating landfills.
Northstar’s technology is capable of not just making a dent—but completely fixing the issue. And most importantly—it’s operating NOW.
Most green tech start-ups I see are an idea that looks great, BUT–hasn’t been tested and requires oodles of additional financing. Northstar’s technology IS great, HAS been fully tested and the company needs no cash (they just raised $12 million).
Northstar plant 1 is in Greater Vancouver, then next comes Plant #2 in another location, then Plant #3 in another location…..and every city in North America needs this solution.
Northstar is creating the first circular economy around roof shingles. Shingles are brought to the plant, ground down and processed with a proprietary technology, and then the component materials are separated for reuse and reselling.
An asphalt shingle and fiber get put into a tile, goes in somebody’s roof, and comes back off. Northstar can literally separate 99% of the components back out and the materials can be used to make a new shingle or asphalt roads or other industrial purposes——FULL CIRCULAR ECONOMY.
This is a perfect ESG circular economy story, just as good as a polyethylene plastic bottle. This is just doing it with shingles.
Northstar has a huge competitive edge with their Bitumen Extraction and Separation Technology (BEST) which uses a proprietary process to separate the liquid asphalt, fiber and aggregate sands from the shingles.
This technology was in the works years before Green Initiatives–and the desire for circular economies–became more mainstream.
This is a case of the solution arriving just as demand explodes.
The timing for Northstar really couldn’t be better. There is huge global stimulus coming out of COVID.
Government decision-makers are focused on the environment with money to spend. There is literally hundreds of billions of dollars looking to invest in world-changing, eco-friendly ventures like this.
FOUR Big Revenue Streams
The Northstar business has FOUR lucrative revenue streams:
- Get paid BIG bucks (tipping fees) to just take the waste shingles off the roofer’s hands
- Resell the asphalt in the shingle
- Resell the fiber in the shingle
- Resell the sand/aggregate in the shingle
I’m probably most excited about revenue stream #1 at this point. A tipping fee is what someone pays when they drop off waste at a landfill.
Where the market is going (think greener; heavy incentives to get greener) those tipping fees are only going up. They already have been for years and the rate of increase is about to accelerate.
The pressure for industry to deal with their waste in an environmentally friendly way is only going to get more intense–especially for something like shingle tiles that involve hydrocarbons–that’s a lot of oil trapped inside of the shingle getting dumped into a city landfill.
Tipping fees are the intake revenue for Northstar. The reselling of the repurposed raw materials (asphalt oil, sand, fiber) that come out of the shingles is Northstar’s outtake revenue.
The asphalt oil will be the killer app. And Northstar already has a major multinational construction firm signed on as a customer to buy the asphalt oil from the Empower facility.
I expect Northstar to get bigger and bigger premium pricing for their products——because again, everyone in the world is trying to incentivize a circular economy.
There are 52 cities that total more than two million houses across North America. Every single one would benefit from this technology. The growing shingle mountains in their landfills are an obvious environmental black eye.
Another potentially large revenue stream is–government support. Northstar has hired a powerful consulting group to help them take advantage of technical and environmental grants. Given there is so much stimulus money and a will to do good for the environment–there’s a big chance to secure a lot of non-dilutive capital here. The list of institutions that are dying to provide capital for ESG-friendly companies is huge.
Right now, there is no solution for an everyday problem that grows by 20 BILLION POUNDS A YEAR. Think about it. YOU probably own a roof with asphalt shingles. Did you ever think what a huge problem they are? This is a large but simple problem with a low- cost solution ready to go.
ROOF’s technology is proprietary. It works great–to the point where a multi-national construction company wants ALL their liquid asphalt from Plant #1. That’s incredible validation for this company.
ROOF is fully funded after their recent $12 million IPO (the stock is still well under $1). EVERYBODY wants to solve this problem–and this problem is EVERYWHERE. It’s over a US$2 billion market annually.
ROOF’s timing is perfect, coming to market when the demand for this kind of circular economy solution is very high. They’re funded, having just raised $12 million, and production is already ramping at their first facility. Management is developing their expansion plans–they want to roll these out across North America as fast as they can.
It’s the B.E.S.T. solution–for industry, municipalities and investors.
Disclosure: Keith Schaefer owns 100,000 shares of Northstar Clean Technologies Inc. (TSXV:ROOF)
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