Grant advances bio-plastics project for Toronto-based developer

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Canadian Industrial Hemp Corporation (CIHC) has been awarded a CA$100,000 (US$ 77,000) grant from the Canadian Agricultural Partnership (CAP) to advance development and commercialization of a system that will predict the engineering properties of custom bio-pellet formulations.

The artificial intelligence (AI) system is designed to allow thermoplastic producers to easily identify bio-pellet formulations which are structurally and aesthetically suitable to replace their existing 100% polymer feedstock, said CIHC Founder & CEO Robert Ziner.

CAP and Agriculture and Agri-Food Canada (AAFC) work with provincial and territorial governments in establishing policy and program priorities for the development of Canada’s farming value chain.

Potential boon for farmers

“We are grateful for this opportunity to advance the utilization of hemp fiber and encourage the growth of more hemp across Canada,” Ziner said of the grant. “With our innovative business model in place, growing hemp will prove to be one of the most attractive economic crop opportunities for farmers across North America.”

Toronto-based CIHC is looking to raise CA$46 million (US$ 35 million) in the USA to build a fully operational AI driven, advanced hemp stalk processing and optimization system.

Ziner says the system will reduce the unit cost of decortication by over 45%. With patents pending, the “Smart Stalk” system is designed to focus on productivity and production flexibility, thereby maximizing the value added to input stalk.

Bio-plastic building materials

Ziner said engineered bio-pellets can be used as thermoplastic feedstock in the manufacture of plastic construction products such as windows and doors, siding, extruded moldings and decking.

The pellets can replace up to 80% of oil-based polymer within bio-composite products made by injection, extrusion, and pultrusion molding processes, Ziner said, while cutting costs and improving finished product quality for plastics manufacturers.

Ziner envisions a major bio-pellet market opportunity in the North American auto industry, mirroring market developments in Europe and Asia for bio-composite internal trim parts. Hemp is seen as lowering both the cost and the weight of a vehicle – critical benefits to the automobile industry. Plastics account for 20% of the weight of most cars.

Beyond bio-pellets

“Beyond the bio-pellet markets, our technology also facilitates CIHC’s ability to better service bast fiber markets,” Ziner said. “Our vision expands the use of bast fibers from textiles and non-wovens to include industrial applications such as pulp and paper, and nano-material,” he added.

Zinter said CIHC is positioned to take advantage of hemp stalk which is currently being wasted because processing that material has not been economically feasible.

While Canadian farmers have focused on growing seed, and now turn their attention to a recently opened domestic CBD market, CIHC is focused strictly on fiber. As much as 144,000 tons of stalk from Canadian grown hemp was wasted in 2017 alone, Ziner noted. Meanwhile, Canada imports as much as CA$20 million (US$15 million) worth of European and Chinese hemp fiber annually.

50,000 tons per year

“Our AI-driven facilities will provide 50,000 tons of throughput per year, enabling Canadian commercial manufacturers to access a consistent, large-scale supply of low-cost, high-quality hemp fiber products without incurring high overseas shipping costs,” Ziner said.

Only five commercial hemp stalk decortication operations exist across Canada, each with less than 4,000 tons of output per year. Such low volume, commodity-focused, labor intensive operations cannot achieve commercial margins, according to Ziner. That’s why there are so few decortication facilities in Canada, and why so few farmers can currently sell their stalk, he said.

‘Huge opportunity’

“Hemp fiber represents a huge opportunity for Canadian farmers,” Ziner emphasized. “While farmers currently burn, or have to pay 10% of their crop revenue to dispose of their hemp stalk, CIHC will pay them for their stalk. And we will pay up to 300% more than is currently paid for stalk grown for seed, if crops are grown and harvested for fiber specifically,” he added.

In September 2018, CIHC’s submission to Canada’s federally-funded, Sustainable Development Technology Corporation (SDTC) was approved for final due diligence review. This will provide a grant in the amount of CA$3 million (US$2 million) to integrate the analytics and operational capabilities of the Smart Stalk System.

Ziner is to appear this week before the Canadian Senate’s Standing Committee on Agriculture and Forestry to talk about the impact hemp can bring to the value-added sector in Canada and how to make Canadian hemp fiber processing more competitive in global markets.

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