The year is almost over. Old technologies can take longer to die and the timing is unpredictable, according to an article in the Lex column of FTWeekend 15/16 December 2018.
Sony announced that it was stopping production of Betamax tapes in 2015, for example, more than 50 years after it lost a format war with VHS.
Most investors and business academics expect technologies to decline steeply. CDs are good examples. Sales have dropped by 92 per cent since a 2000 peak in the US, though they still dominate in Japan, where streaming has been slow to take off. In the UK only two out of five people regularly buy new ones. In Malaysia CD stores are closing down, given that Spotfiy is free for listeners of songs., including my wife.
But old formats put up a better fight than expected. This creates opportunities and pitfalls for investors. Sales of ebooks, once predicted to overtake printed books, have fallen since 2014. Now the small but fast-growing audio download is worrying publishers.
New technology -cloud services-threatens to make game consoles redundant. But sales of console games are still growing strongly and 5G may support them. Even retro consoles are in vogue. Sony has followed Nntendo in bringing back a 24-year-old machine in miniature.
Affection for timeworn technology can be dismal. A YouGov poll found many British CD listeners felt left out as new song releases bypassed the medium. However, the auditory and tactile pleasures of vinyl have sparked a revival. LP sales in the US more than quadrupled to nearly US$400 million in the seven years to 2017, according to trade body RIAA. Unlike old soldiers, some old technologies neither die nor fade away.
In a recent blog we highlighted meat from plants. The high-fashion industry is also embracing plant-based materials, as explained in an article written by Richard Grassie in the FT Weekend magazine on December 15th, 2018.
Leading this revolution is manwear brand, Brave GentleMen. Its founder, Joshua Katcher, created the company in 2008 with a passion for high-end clothing that does not use animal products- not just animal skins and fur, but also silk (which can involve boiling and gassing 6,600 silkworm larvae per kg of silk), down (which is often plucked from live geese and ducks) and wool (where processes can include anaesthetic-free castration, and mulesing-the removal of skin from the rear quarters of a merino sheep to prevent fly strike).
Joshua Katcher, a pioneer in animal-free high-fashion material
In 2015, Brave GentleMen opened its first store in Brooklyn,New York, US. For double-breasted coats, it used 100 per cent recycled polycotton blends diverted from plastic waste stream and spun into yarn. The coats are lined with vegan “future silk” produced from a variety of polyesters, including plastic bottles.
Joshua Hatcher reported that he is looking forward to a day that he can use laboratory-grown leather in his collections. He said he is in talks with some bio-fabrication start-ups, deciding with to work with. Materials grown in the laboratory would offer a big solution to a great many problems. Laboratory-grown as well as fungi- and plant-based d materials such as mushrooms and pineapple are the future.
Californian technology company, Bolt Threads, is a leading innovator in laboratory-made leather and silk. After studying natural silk proteins, originally from spiders, it inserted genes into yeast and used fermentation process to produce an animal-free silk, which is spun into fibres. This method resulted in the company’s first commercial product in 2017, the limited edition Bolt spun tie.
Artificial silk produced by Bolt Thread Inc
The company has also produced the first consumer synthetic leather called Mylo, created by studying mycelium, the root structure of mushrooms, to give a mushroom-based leather-like material in a laboratory.
Pineapple leaf-based leather by Pinatex
A number of other brands are also offering new alternatives to traditional animal products. Interesting innovations can be found among companies, many of them brands, using fibres from trees, fruits and fungi. One company, Pinatex, created a material from pineapple-leaf fibre. Apple cores, discarded by agribusiness industries, are used by Italian footwear company, Nemanti, for a range that includes a monkstrap weekend shoe.
Conclusion
Visionaries like Joshua Katcher and others have been leading the efforts to use plant-based materials for use in the high-fashion industry.According to the 2017 Pulse of the Fashion Industry report, leather, wool, silk and cotton are the top four materials whose production most damages the environment
We hope, as Joshua Katcher noted, one day all leather will be animal-free. For a long time, animals have been suffering to give us the high-fashion look and feel.
Note: We wish to thank the companies mentioned in the article for permission to use the images.
Tim Harford in his book, Fifty Things that Made the Modern History,listed the S-bend as one crucial invention . He noted that in 1800’s, as London’s population expanded in number, the city’s system for disposing of human waste became woefully inadequate. The main system used then was cesspits, which were prone to leaking, overflowing and generating significant odour. A number of inventors came out with solutions to address this human waste problem. One prominent inventor was Alexander Cummings, who was known for mastery of precision mechanics. However, his well-known invention was a pipe with a curve in it.
Cumming’s Invention
In 1775, Cummings patented the S-bend. This became the missing part to create the flushing toilet, which led to public sanitation as we know it today, according to Tim Harford. Previously, flushing toilet was a failure due to the problem of smell: the pipe that connected the toilet to the sewer,allowing urine and human waste to be flushed away, would also let sewer odours waft back-up, unless an airtight seal could be developed.
Cumming’s solution was simple: bend the pipe. Water settled in the “dip”, stopping smells coming up;flushing the toilet replenished the water. His design had a sliding valve in the outlet above the tap. The design is still used today.
Alexander Cumming
We all should be thankful to Cummings for giving us the personal convenience in managing our daily needs. We noted the modern toilet only touched our live in the early 1970s. Before that we used rivers, small streams, small ponds and open space. Many times, especially in early mornings, there were many people lining up the river in our village. Personal convenience vastly improved when the Malaysian government provided subsidies to Malaysian families to build outdoor toilets using bucket of water to flush the toilet. What a total relief for all of us, especially for women folk.
Now, we have modern indoor toilet in our house. We spend a lot of time sitting on it while surfing the internet, read book or magazine and even answer emails.
A Lot of People Still Do Not Have Toilets
Yet, there are more than 2.3 billion of people still without basic sanitation according to Guy Hutton, a senior adviser for water, sanitation and hygiene with UNICEF, when he was quoted in the Staronline, a Malaysian newspaper on 6.11.2018.
In addition, according to WHO, more than half of the volume of human waste escapes into the environment untreated.
The “toilet” problem has attracted the attention of Bill Gates and his wife, Melinda. The Bill and Melinda Foundation spent US$200 million over seven years funding sanitation research, developing some 20 novel toilets and sludge processing designs and convert bodily waste into clean water and fertilizer.
Modern toilet with many features from Toto
Conclusion
The S-bend and flushing toilet have improved the quality of lives of billion of people worldwide. However, a significant number of the world’s population is still inaccessible to basic sanitation. Thanks, we have philanthropists like Bill Gates and Melinda who saw the need to solve this basic human sanitation.We are afraid that one day, these people have no more open space to bury their waste!
Beyond Meat Inc., a company producing plant-based meat has submitted an application for an initial public offering (IPO) in the US. We have reviewed its prospectus and noted what makes Beyond Meat burger unique.
Plant-based burger produced by Beyond Meat Inc.
Overview
Beyond Meat is one the fastest growing food companies in the US, offering a portfolio of revolutionary plant-based meat. It builds meat directly from plant, an innovation that enables consumers to experience the taste, texture and other sensory attributes of popular animal-based products while enjoying the nutritional benefits of eating plant-based meat products.
Its products are designed to appeal to a broad range of customers, including those who typically eat animal-based meat, which is worth US$1.4 trillion globally. According to the company, it had developed three plant-based product platforms that align with the largest meat categories: beef, pork and poultry. It creates plant-based products using proprietary scientific processes that determine the architecture of the animal-based meat the company seeks to replicate and then assemble it using plant-derived amino acids, lipids, trace minerals and water. The company is focusing to improve its products so that they are, to the human sensory system, indistinguishable from their animal-based counterparts.
Its flagship product is The Beyond Burger, the world’s first 100 per cent plant –based burger merchandised in the meat case of US grocery stores. The Beyond Burger is designed to look, cook and taste like traditional ground beef. The products are currently available is about 28,000 points of distribution primarily in the US as well as several other countries.
Unique Approach to market its Products
Instead of marketing and merchandising The Beyond Burger to vegans and vegetarians (who represent less than 5 per cent of the US population), it requests that its products to be sold in the meat case at grocery stores where meat-loving customers are accustomed to shopping for their proteins. The marketing approach has helped drive greater brand awareness with its customers.
The Beyond Burger is now carried by approximately 11,000 grocery stores in the US. Its products are also now carried by 11,000 restaurants.
The Market for Meat
The company notes that the meat industry is large and global. This meat industry is comprised of fresh and packaged animal-based meat for human consumption. According to data from Fitch Solution Macro Research, the meat industry is the largest category in food and in 2017 generated estimated sales across retail and foodservice channels of about US$270 billion in the US and about US$1,400 million globally.
The company believes that consumer awareness of the perceived negative health, environmental and animal-welfare impacts of animal-based consumption has resulted in a surge in demand for viable plant-based protein alternatives. In the US, the current size of the non-dairy milk category is equivalent to approximately 13 per cent of the size of the milk category. According to Mintel report, the non-dairy milk category in the US was estimated to be US$2.0 million in 2017. The success of the plant-based dairy industry was based on a strategy of creating plant-based dairy products that tasted better than previous non-dairy substitutes, packaged and merchandised adjacent to their dairy equivalent.
The company is applying the same strategy to the plant-based meat category. It expects to grow to be at least the same proportion of the approximately US$ 270 billion meat category in the US, which over time would represent a category size of US$35 billion in the US.
Financials
The company reported that it had experienced net losses since its inception in 2009. In the years ended December 31st, 2016 and 2017, it incurred net losses of US$25.1 million and US$30.4 million, respectively. In the same period, the company recorded revenue of US$16.18 million in 2016 and US$32.58 million, respectively.
The company would be raising additional capital through an IPO.
Conclusion
We support the efforts of the company to develop plant-based meat that tastes better than the meat from animals. The new wealthy consumers in Malaysia, China and Indonesia (with the exception of India) are consuming more meat steaks and burgers, which are imported from Australia, Brazil and the US. This need to supply more animal meat is putting pressure on existing pastures and grasslands for rearing of cattle. Scientists have reported that the raising of cattle for meat and milk would lead to emission of methane to the atmosphere.
We hope in the near future, patrons in high-end restaurants in Asia would be eating plant-based meat without realizing it.
Quick Data on Cattle Inventory
Cattle in a pasture
Based on data published by http://beef2live.com, according to the FAO, the world has 1,468 million head of cattle. Brazil has the largest cattle inventory at 211. 76 million, followed by India with 189 million, China with 113.5 million, the US with 89.3 million, Ethiopia at 54 million, Argentina with 51.1 million and Sudan with 41.9 million. About 104 countries have a cattle inventory in excess of 1 million heads.
Today we noted two contrasting developments, 1) the price of Brent crude oil had fallen below US$60 per barrel, and 2) a company will start deep sea mining of precious metals.
In the 1980’s I worked as a refining planning engineer in ESSO’s refining unit in Port Dickson, Malaysia. During that time, as a refining planning engineer, I was tasked on production planning to refine Tapis crude, which was pumped from oil platforms located offshore in South China Sea.
Like crude oil before, precious metals used to make batteries for electric vehicles will also be mined from sea beds. According to a report in The Times London, Patania II, a 25-tonne robot tractor, will spearhead the latest push to mine precious metals from the ocean floor. Patania II would be lowered 4,500 metres to the Pacific Ocean sea bed between Mexico and Hawaii in April 2019. It will gather nodules of rock on the ocean floor that contain high concentrations of metals used in electric car batteries and renewable energy systems. The companies which are racing to mine the ocean floors are hoping to recover manganese, molybdenum, cobalt, nickel and vanadium. The companies contend that their deep sea mining operations would cause less environmental damage than producing the same mount on land by drilling and blasting millions of tonnes of rocks.
Britain is one of several countries sponsoring sea-bed mining companies that have obtained licenses from the International Seabed Authority (ISA), based in Jamaica, to explore the Clarion Clipperton Zone, an area in the Pacific Ocean covering about six million sq km. This area is thought to hold more of the metals being targeted than all terrestrial metal reserves (see our earlier blog). Access to its mineral reserves is controlled by the ISA because it is beyond the jurisdiction of any nation.
Chris Williams, the managing director of UK Sea Bed Resources, owned by Lockheed Martin of the US, said that his company planned to mine about 9,000 sq km of the zone. “Sea bed mining will form an essential path to the future supply of precious metals for electric vehicles,” he said.
The ISA, however, needs to agree a mining code with environmental safeguards before extraction can begin. A draft has been produced to be agreed in 2020 but some of the ISA’s 168 members have a vested interest in delaying progress to protect their land-based mines from cheaper sea-bed minerals.
Environmental Concerns of Sea-Bed Mining
The mining companies need to complete environmental impact assessments before starting extraction. The pilot operation of the Patania II, owned by Global Sea Mineral Resources (GSR), a subsidiary of the Belgian dredging company Dede, will leave nodules on the sea bed. A research vessel with 50 scientists on board, funded by EU, will study the impact. It is estimated that each nodule typically weighs about 1 kg and contains several different metals, meaning one sea-bed mine could deliver as many commodities as two or three land-based mines.
Polymetallic nodules containing several metals
The industry argues that sea-bed mining would reduce reliance on countries such as DRC, which produces most of the world’s cobalt for batteries.
Michael Lodge, the ISA’s British secretary-general, said that commercial extraction could start in 2023 but that depended on whether investors considered it as commercially viable. He added that some damage is inevitable but sea-bed mining was “the most highly regulated activity that’s never taken place”.
Watch out DRC on future development of sea-bed mining!
Please click below on polymetallic nodules published by the ISA.
In 2010, we published a book, Securing Private Equity in Malaysia, as a guide for entrepreneurs on how to raise money from investors. We believe the book is still relevant today as it was in 2010.
In line with the forthcoming giving season, we want to make the ebook of the publication free to visitors of our website until December 31st, 2018.
We noted an interesting article by Roger Boyes in the London Times on November 14th, 2018. He predicted that the push to produce electric cars worldwide would alter the dynamic of the existing energy-producing countries. The International Energy Agency has forecast that oil use by cars will peak in seven years because of the increasing number of drivers in emerging markets and Asia mega-cities. Then, electric vehicles will start to make a significant impact:300 million electric cars on the road by 2040. This will alter the energy value chain. The source of energy will shift from fossil fuel (crude oil) to mineral-based, namely lithium and cobalt to make powerful rechargeable batteries.
The Applications of Lithium
Spodumene, the main source of lithium
According to US Geological Survey, Mineral Commodity Summaries, January 2018 (The Report), global end-use markets of lithium are estimated as follow :
Batteries, 46 per cent
Ceramics and glass, 27 per cent,
Lubricating greases, 7 per cent,
Polymer production, 5 per cent,
Continuous casting mould flux powders, 4 per cent,
Air treatment, 2 per cent, and
Other uses, 9 per cent.
Prices of Lithium
The Report noted that spot lithium carbonate in China ranged from US$15,000 to US$24,000 per ton throughout 2017 owing to tight supply of spodumene from Australia. The rest of the world experienced more modest price increases owing to supplies available from more diversified sources of lithium. Spodumene is a pyroxene mineral consisting of lithium aluminium inosilicate, LiAl(SiO₃)₂, and is a source of lithium. It occurs as colourless to yellowish, purplish, or lilac kunzite, yellowish-green or emerald-green hiddenite, prismatic crystals, often of great size.
Three spodumene operations in Australia and two brine operations each in Argentina and Chile accounted for the majority of world lithium production. The table below shows mine production and reserves of lithium.
Countries
Mine production in 2017 (Tons)
Estimated reserves (Tons)
US
–
35,000
Argentina
5,500
2,000,000
Australia
18,700
2,700,000
Brazil
200
48,000
Chile
14,100
7,500,000
China
3,000
3,200,000
Portugal
400
60,000
Zimbabwe
1,000
23,000
World total (excluding US)
43,000
16,000,000
Source: The Report
Australia, the main supplier of spodumene
Chile, a major supplier of lithium from brine operations
Owing to continuing exploration, lithium resources have increased substantially worldwide and total more than 53 million tons.
Substitutes
Substitution for lithium compounds is possible in batteries, ceramics, greases, and manufactured glass.
The Applications of Cobalt
Cobalt mineral
According to The Report, Democratic Republic of Congo (DRC) is the leading source of mineral cobalt, supplying more than one-half of world cobalt mine production. With the exception of production in Morocco and artisanally mined cobalt in DRC, most cobalt is mined as a by-product of copper or nickel. In 2017, average annual cobalt prices more than doubled, owing to strong demand from consumers, limited availability of cobalt on the spot market, and an increase in metal purchases by investors.
China is the world’s leading producer of refined cobalt. Much of China’s production was from ore and partially-refined cobalt imported from DRC. China is the world’s leading consumer of cobalt, with nearly 80 per cent of its consumption being used by the rechargeable battery industry.
The table below shows mine production and reserves of cobalt.
Countries
Mine production in 2017 (Tons)
Estimated reserve (Tons)
US
650
23,000
Australia
5,000
1,200,000
Canada
4,300
250,000
DRC
64,000
3,500,000
Cuba
4,200
500,000
Madagascar
3,800
150,000
New Caledonia
2,800
–
Papua New Guinea
3,200
51,000
Philippines
4,000
280,000
Russia
5,600
250,000
South Africa
2,500
29,000
Zambia
2,900
270,000
Other countries
5,900
560,000
World total
110,000
7,100,000
Source: The Report
DRC is the biggest producer of cobalt and having the biggest reserves
The Report noted that terrestrial cobalt resources are about 25 million tons. In addition, more than 125 million tons of cobalt resources have been identified in manganese nodules and crusts on the floor of the Atlantic, Indian and Pacific Oceans.
Substitutes
In some applications, substitution for cobalt would result in a loss in product performance.
Conclusion
The electric car revolution would increase the consumption of cobalt and lithium, and the reduction in the consumption of petrol from crude oil. These mean countries such as Australia, Argentina, Chile and DRC would be the new energy giants in the next decades. What would the existing energy giants such as Saudi Arabia, Russia and Venezuela do with their plentiful reserves of crude oil?
Swiss robotics company ABB has revealed that it’s spending US$150 million to build an advanced robotics factory in Shanghai — one that will use robots to build robots. The company will rely on its YuMi single-arm robots, which it once used to conduct an orchestra, for small parts assembly. It also plans to make extensive use”of its SafeMove2 software in the facility, which it says will allow its YuMi models and other automated machines to safely work in close proximity with human employees.
ABB says its goal is to make the Shanghai facility the most advanced robotics factory in the world. It will even feature a Research and Development center to accelerate the firm’s work in artificial intelligence. In addition, it will widen the types and variants of robots the company can build for Chinese companies, including automakers and electronics manufacturers. China is ABB’s second biggest market after the United States, and the new factory could greatly expand its presence in the market. The company expects to open the 75,000-square-foot facility by late 2020.
The Status of World’s Robots Population
According to the International Federation of Robotics (IFR) 2018 Report, there are three types of robots;
Industrial Robots
Professional service robots, and
Personal/domestic services robots
The IFR 2018 reports noted key drivers for robots, and they include:
Shift to high mix/low volume production
Global competitiveness
Digitalization of manufacturing-Industry 4.0.
Growing consumer market
Energy efficiency-driven technology shift
Regionalized production
Industrial Robots
Automotive industry uses the most number of industrial robots
In 2017, China was the biggest supplier of industrial robots with 138,00 units followed by Japan at 46,000 units. The main customers of industrial robots are the automotive industry and the electrical and electronic industry. However, China was lower in the ranking in the number of installed robots per 10,000 employees in the manufacturing industry in 2017, as shown below:
Country
Installed robots
1
Korea
710
2
Singapore
658
3
Germany
322
4
Japan
308
5
Sweden
240
6
Denmark
230
7
US
200
8
Taiwan
197
9
Belgium
192
10
Italy
190
11
Netherlands
172
12
Austria
167
13
Canada
161
14
Spain
157
15
Slovakia
151
16
Slovenia
144
17
Finland
139
18
France
137
19
Switzerland
129
20
Czech Republic
119
21
China
97
In 2017, there were 2,098,00 industrial robots in world’s factories as compared to 1,632,000 in 2015.
Professional Services Robots
A professional service robot
According to IFR 2018 Report, there were sales of US$6.6 billion of professional service robots in 2017, representing 109,500 units. The main applications were in the logistics, medical, field and defence sectors. AGVs were used in factories, warehouses, logistics centres and hospitals. Medical robots are most valuable with 2,900 units representing sales of US$1.9 billion in 2017. Field robots are mainly milking robots.
Personal/Domestic Service Robots
ASIMO, a leisure robot
Vacuuming and floor cleaning robots are mostly established personal/domestic robots. In 2017, there were 1,200,000 household robots and 400,000 entertainment and leisure robots.
Please find a snapshot of the robotic industry in the report below.
Every month, a meter reader, wearing light blue shirt, will be entering our house compound to read the electricity meter at our house. Then, he will drop the electric bill into our mailbox. This October’s bill reads RM294.
We dream of a day that we will receive a cheque from the meter reader instead of the monthly electricity bill. That day will be coming soon. On October 23rd, 2018, it was reported that an electric car Nissan Leaf, manufactured by Nissan, became the first electric vehicle (EV) to secure regulatory approval as an energy backstop for Germany’s electricity grid.
So-called vehicle-to-grid (V2G) technology is a connection between the EV and the electricity grid through which power (electricity) can flow from the grid to the vehicle and vice versa. That potentially enables car owners to sell electricity to the electricity network supplier. In addition, electricity network supplier companies could use EVs as a backstop if electricity demand rises.
The International Energy Agency estimates that there would be 280 million EVs by 2040 compared with more than 3 million in 2017.
V2G system
Nissan is relying on the CHAdeMO charging standard, which had been jointly developed by several Japanese companies as a competitor to Tesla’s supercharger system and the European-backed combined charging system (CCS). That places Nissan at odds with European carmakers such as BMW and Volkswagen, which are promoting to have the CCS, which is capable of V2G services.
Nissan is ahead of its other competing technologies although Tesla’s supercharger can theoretically offer V2G services according to an industry expert.
Nissan has so far sold about 370,000 EVs and, along with top shareholder Renault, has been very active in exploring how car batteries can be integrated into the electricity supply system.
How Does V2G Technology Benefit Us?
According to ovoenergy.com, we are moving towards a situation where “two-way” chargers can enable homeowners with EVs to sell their power (electricity) back to the electricity network. It is a smart idea when over 90 per cent of cars are parked at any one time—which is a lot of energy just sitting there doing nothing.
Battery Degradation
Lithium ion battery used in EV
Batteries have a finite number of charging cycles, as well as a shelf-life. Therefore, using an EV as grid storage can impact battery longevity. However, studies have shown that battery capacity is a complex function of factors, such as battery chemistry, charging and discharging rate, temperature, state of charge and age.
Most studies with slower discharge rates show only a few per cent of additional degradation.
Conclusion
We believe, with rapid progress in EV and V2G technology, our wish to have the meter reader drops a cheque into my mailbox for supplying power to the national electricity grid would be realized soon. First, we need to book a Nissan Leaf from our local Nissan dealer.
