Aussie startup sees strong demand as it gears up to process straw

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Looking across Tasmanian fields of hemp stubble left over after the plants had been harvested for their protein rich seed, Australian entrepreneur Andi Lucas saw a business opportunity. She’s now looking for funding from private investors to purchase a mobile hemp processing unit to turn straw into hurd and fiber for a wide range of applications.

“The arrival of this equipment in Tasmania will lead to immediate job creation and economic stimulus,” said Lucas, the sole owner of X-Hemp Pty Ltd, a company she formed to introduce the technology to her home state.

Lucas envisions turning out building materials, animal bedding, bast for paper production, and mulch — all from straw that local farmers have been burning through the ten years they have been growing hemp for seed on Tasmania, Australia’s leading hemp producing state. Tasmanian farmers turn out roughly 80% of the country’s total hemp yield.

Based on existing prototype

The technology will be a next-generation machine based on an original created by Connie and Leon Minos, owners at New South Wales-based Ashford Hemp Industries, who developed the working prototype for their own farm, which has also been supplying hurd for a limited number of outside clients, according to Lucas, who also serves as Executive Officer of the Tasmanian Hemp Association. Designed to process up to one 400 kg (~880 lb.) square bale per hour, the processor has an estimated price tag of AUD$185,000 (~€113,240/~US$132,710).

Support from hemp stakeholders has been strong, Lucas said, with local growers already having committed to supply straw on a cost-recovery basis for the first year, and at less-than-market-rate prices through 2023. Three of the largest contracting parties in Tasmania –Ananda Enterprises, ECS Botanics and Midlands – are supporting X-Hemp by allowing their growers to provide straw, which guarantees a first supply of input raw materials. On the sales side, the company has already inked preliminary purchase agreements for building materials, animal bedding and bast fiber in advance of Australia’s upcoming hemp growing season, Lucas said.

Strong local support

Meanwhile, X-Hemp is benefitting from consulting support from Australian hemp veterans Phil Warner, Klara Marosszeky of Australian Hemp Masonry Company, and Lisa Estreich, Hempen Things, and the seven experts who are board members at the Tasmanian Hemp Association, which is fully backing the project.

Working on the CCSS2020 project: Andi Lucas, X-Hemp founder; Klara Marosszeky, Australian Hemp Masonry Company; and Connie Minos, Ashford Hemp Industries.
Working on the CCSS2020 project: Andi Lucas, X-Hemp founder; Klara Marosszeky, Australian Hemp Masonry Company; and Connie Minos, Ashford Hemp Industries.

For financing, Lucas has turned to an open call based on minimum investments of AUD$5,000 (~€3,000/~US$3,500) that offer a 5% rate of return. She’s optimistic about raising AUD$250,000 (~€151,00/~US$178,000) from private investors and a similar amount from state and federal grants and low-interest loans, to reach the total AUD$500,000 (~€302,000/~US$356,000) required for early-stage development of the business.

‘Choppy Choppy Smashy Smashy’

Lucas said the simple-yet-effective machine, lightheartedly dubbed the “Choppy Choppy Smashy Smashy” or CCSS2020, is expected to run close to full capacity from the outset, but that still will not meet anticipated demand. The first machine is to serve as proof-of-concept for a larger investment over the coming years, with the goal to create a scalable mill system to supply what Lucas anticipates will be constantly growing demand. The larger scale, more sophisticated technology will require investment of AUD$3-$5 million, she said.

With anticipated first demand for hurd to build hempcrete houses, Lucas said several clients are ready to build, but have hesitated due to a lack of local supply. Some builders have been importing the material from Europe and North America, incurring expensive shipping costs. She said she expects as many as 12 builders plan hempcrete projects in Tasmania over the next 12-18 months that will require 3.2 tons of hurd per house.

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