Team:York/Business

Business Introduction

Current wastewater treatment

Phosphate is an inorganic molecule that is found throughout the environment. It is an important compound as it is vital in the biochemistry of many organisms.

However, high concentrations of phosphate in the environment can be dangerous and lead to eutrophication. This is a process whereby an algal bloom occurs causing the deoxygenation of water, which can have a huge impact on water based ecosystems. For example, organisms that live in rivers may die because of insufficient oxygen levels.

The reason why this occurs in the environment is because wastewater plants treat water coming from large domestic areas, industrial phosphate factories and agricultural areas which use phosphate fertilisers. This means that when the water is pumped back into the environment it may still contain high levels of phosphate.

The United Kingdom’s Environmental Agency has set out regulations regarding phosphate concentration in treated wastewater before it can be released back into the environment. It currently stands at 3mg/L of phosphate being in the treated water. It is important that wastewater companies comply with these regulations and if not they encounter a fine. However, it has become more difficult to meet these requirements and has led to companies seeing a steady increase in operation costs due to the ongoing demand to stick to regulations. For example, over the past three years there has been a £20.8m increase in the operating cost of Yorkshire Water. Moreover, the Environmental Agency is going to lower the limit of phosphate to 0.1mg/L in the hope that this will reduce levels in water systems further. This will mean that wastewater treatment companies will see operation costs rise again.

Currently, most water treatment companies use ferric sulfate or ferrous chloride to remove phosphate from the wastewater. Yorkshire Water is one company which uses ferric sulfate and importantly it only narrowly passes the regulatory phosphate level in its treated wastewater. In addition, using the ferric sulfate method Yorkshire Water fails to meet the Environmental Agency regulatory levels of iron. This is because the ferric sulfate method releases iron into the treated wastewater. Consequently, Yorkshire Water have to pay a fine which is proportionate to the amount they exceed the regulatory level.

When the Environmental Agency reduces the regulatory levels of phosphate, many companies, including Yorkshire Water will fail to reach this new regulatory level using current chemical methods. If they tried to meet the new regulatory levels of phosphate by using more ferric sulfate, they would further exceed the iron regulatory levels. Thus increasing the fine they receive.

An additional consideration is that the ferric sulfate method is becoming more expensive and very hard to sustain. With these points in mind, there is need for an alternative method to remove phosphate from wastewater.

Our Product

Engineered Bioreactors aims to use a novel bioremediation method to remove the phosphate from wastewater instead of the current chemical methods mentioned above. The process involves an engineered Escherichia coli that will remove and recycle phosphate from wastewater. This new method is highly beneficial for both the environment, as it reduces eutrophication, and financially beneficial for the wastewater companies which will implement it.

WHY ECOLI

The engineered E. Coli can be placed inside a bioreactor through which the wastewater will flow. As the wastewater passes through the bioreactor, the engineered E. Coli will take up any phosphate in the solution. This is possible because the E. Coli can store large amounts of phosphate as it converts it into polyphosphate.

The next part is collecting the phosphate from the bacteria in the bioreactor. Engineered Bioreactors have genetically modification the E. Coli so that under a specific inducer it will form internal gas vesicles. This causes the E. Coli to float to the surface of the wastewater making it easy to extract by a skimming method.

The extracted E. Coli under specific conditions will excrete the phosphate which it has accumulated. The phosphate that is excreted can then be recycled and sold to fertilizer companies generating a profit for Engineered Bioreactors. In addition the bacteria can be placed back into the bioreactor ensuring low operation costs.

The aim is that the bioreactors will be designed so that they can process 250,000L of wastewater daily.

If large wastewater treatment companies implemented our process, it would help them meet both the phosphate and iron regulatory levels. Furthermore, by being able to reuse the bacteria, it provides a more sustainable approach to the removal of phosphate and would also reduce operation costs. The phosphate extracted could be recycled and sold on to fertilizer companies. The profit made by selling the recycled phosphate is only set to rise over time as phosphate is a finite source.

Current Position

Engineered Bioreactors is in the stage of developing and testing the engineered E. Coli. The E. Coli has successfully been engineered so that it has a high phosphate uptake and can store the phosphate internally as polyphosphate.

The next step in the development process is to create and insert the genes and promoters required for gas vesicle formation and phosphate excretion. After these bacteria have been transformed Engineered Bioreactors aims to rigorously test the E. Coli to ensure it is fully functional and efficient.

Competitive Advantage

Currently Engineered Bioreactors is the only company which has developed an engineered bacterium that can be used in the removal of phosphate and to excrete phosphate to be recycled. Therefore, competition with other bioremediation companies is limited. Engineered Bioreactors will patent their engineered E. Coli as well as their bioreactor through the UK Intellectual Property Office. This should reduce the competition from other companies that are developing bioreactors. But it will also allow Engineered Bioreactors to be at the forefront of finding an alternative method to the chemical ones.

Growth Plan

Over the next 6 months, EBR aims to have finished engineering and testing the E. Coli. The 6 months after that period, Engineered Bioreactors will start the planning process for building a prototype bioreactor. Once this is built, the engineered E. Coli will be used in the plant to treat wastewater.

By the end of the following year, Engineered Bioreactors aims to have a bioreactor in 1 of the 600 Yorkshire Water wastewater sites. After the bioreactors have been trialled for 6 months, Yorkshire Water and Engineered Bioreactors will be able to analyse the different sites and compare their results to the ferric sulfate method.

The results should favour the use of the bioreactor using the E. Coli. Therefore within five years of starting the business Engineered Bioreactors aims to have its bioreactor installed in all 5 of the 600 Yorkshire Water treatment plants. Furthermore, Engineered Bioreactors would look into getting Thames Water and other wastewater companies to trial the bioreactor and potentially use the new method.

The long term plan is that Engineered Bioreactors will be able to engineer other E. Coli which will remove other substances such as heavy metals including zinc, copper and mercury. Once these are engineered they would be trialled in the bioreactor already installed in water treatment plants around the country.

Engineered Bioreactors will work closely with all companies involved to ensure reliable results are obtained and that there is confidence in the methods used.

Business strategy

Tactics

Initially Engineered Bioreactors will need to find a laboratory to finish engineering the E. Coli. It is a possibility that the University of York could provide a suitable laboratory. It is also essential that a metal fabricator is contacted to enable the construction of a bioreactor.

After developing and testing a prototype bioreactor which contains the engineered E. Coli, Engineered Bioreactors can look into buying a small factory to start making bioreactors. The bioreactors which are made can be installed into waste water treatment sites.

Objectives

Networking is essential to Engineered Bioreactors success. With this in mind, the company will attempt to establish partnerships with large UK based wastewater treatment companies such as Anglian Water, Scottish Water and Thames Water. These partnerships are an important stage in getting the bioreactors trialled. However, if these companies are unwilling to use on their current sites, we will try to work alongside their development team to trial the bioreactors. This will develop the company’s confidence in bioremediation and lead to them incorporating them in their wastewater sites.

Furthermore, Engineered Bioreactor aims to establish links with UK based fertilizer companies which could be potential customers for the recycled phosphate. In addition, transportation of the phosphate, bioreactor materials and engineered E. Coli to desired place will need to be considered and organised.

Finally, as the business will continue to grow, Engineered Bioreactors will increase its number of employees. The recruited employees will include people with experience in the wastewater treatment industry, researchers to continue improving and engineering the bacteria and people with expertise in marketing and advertising.

Strategic Issues

Firstly, the initial cost of buying or renting a laboratory may be problematic. On top of this engineering and growing the E. Coli would require significant amounts of money initially. However, this can be minimalised by using the University Laboratory to begin with and looking for funding towards the chemicals.

Engineered Bioreactors will mainly compete with companies which that use the ferric sulphate method to remove phosphate from wastewater. However, this can be seen as an advantage to increasing the company’s profits as there are very few other bioremediation companies.

Nevertheless within the next 5 years, Engineered Bioreactors would expect to have some competition from other companies developing bioremediation process. By patenting Engineered Bioreactors modified E. Coli as well as their design for the bioreactor, the competition will be minimal if not eradicated.

Any issues regarding transportation will be dealt with in a safe and efficient manner, whereby Engineered Bioreactors will look for the best environmental solution. This will mean that Engineered Bioreactors will have the minimal impact on the environment regarding contamination and pollution. Advancing this further, Engineered Bioreactors will develop links with fertilizer companies to which they can sell the recycled phosphate too.

Core Values

Engineered Bioreactors aims to develop a method which is safer, more sustainable and better than the chemical methods most companies use to treat wastewater.

Protecting the environment underpins Engineered Bioreactors core values. Therefore the company aims to recycle phosphate in a safe way to ensure the environment is not damaged further from mining.

Furthermore, by helping wastewater companies meet the regulatory levels of phosphate in water, we reduce the chance of environmental eutrophication which can severally damage marine life. As well as phosphate being controlled, by using an alternative method to ferric sulfate the company also ensures iron regulations are upheld too.

Marketing

Critical Success Factors

To provide a cheaper and more sustainable method for removing phosphate.

To patent the bioreactor and engineered E. Coli.

To ensure the engineered E. Coli and bioreactor is fully functional and works at the highest efficiency.

To ensure that the use of the bioreactor will be safe and pose no threat to the water companies employees or customers.

To maintain low operation cost.

To continue to research, so that the engineered E. Coli can continue to be improved and upgraded.

To branch out into other markets and industries such as heavy metal removal from wastewater.

To establishing links with transportation and fertilizer companies.

SWOT Analysis

S- Our marketing strength is that our process will provide a cheaper and more sustainable method for removing phosphate
W- A weakness in our technique is the use of bacteria, which the public may not feel fully comfortable about
O- The opportunity for our business to enter the market has arisen due to the use of ferric sulfate becoming more problematic and that Yorkshire Water does not currently use any bioremediation processes to treat its wastewater
T- One of the threats to our business is other companies trying to find a new chemical, or develop a new technique which can be used to remove phosphate

Competitor Research

Yorkshire Water

Yorkshire Water recovers 1.1 billion litres of water a day, which they process in their 631 wastewater treatment plants.
They are complying with current regulation at approximately 3 mg/L of phosphate in treated wastewater but soon the limit will be lowered to 0.1 mg/L of phosphate in treated wastewater.
Currently, in untreated wastewater, which Yorkshire Water collects from domestic areas and businesses, there is approximately 10mg/L of phosphate.
Therefore, they have to process 11000kg of phosphate per day. To comply with the 3mg/L limit, they have to remove 7700kg of phosphate per day. However to comply with the soon to be implemented regulations, they will have to remove 10010kg of phosphate per day.
Currently, Yorkshire Water use ferrous sulphate to remove phosphate from the wastewater they process. However a spokesman from Yorkshire Water stated that ‘Using ferrous sulphate is expensive and becoming increasingly unavailable/unsustainable’. Furthermore, as a result of using ferric sulfate, Yorkshire Water is failing to meet the iron level limit in treated wastewater. This problem is set to worsen due to the phosphate level limit decreasing; therefore they would have to use more ferric sulfate to comply with the new phosphate level limits. Consequently they are currently seeking new alternative methods for removing phosphate from wastewater.
Over the past 2 years the operation cost of Yorkshire Water has risen by £20.8m
If Yorkshire Water implemented EBR’s bioreactor and engineered E. Coli into all of its wastewater treatment sites, it is estimated 10010kg of phosphate would be collected daily to comply with the new 0.1mg/L limit of phosphate in treated wastewater. Therefore the total of phosphate collected annually would be worth £365,365.

Anglian Water

Anglian Water operates 1,128 water recycling centers (WRCs), collecting and treating used water from 2.5 million households and 125,323 businesses.
For the entire Anglian Water region, they collect approximately 927 million litres of used water every day.
Total phosphate in untreated sewage (untreated) can vary between 7 – 12 mg/l. Typically 8 mg/l if we are considering domestic sewage only. This level can be higher if there are trade effluent discharges containing phosphate in the catchment area.
In their treated water (Final Effluent or FE) the phosphate is around 1.0 mg/l. However, this does vary slightly and depends on which WRCs are used to process the water.
Some of Anglian Water sites do not have any phosphate removal processes because they are not required to due to some sites not having phosphate limits. The phosphate limits which are applied to certain site can vary. However, the majority of sites serving a population equivalent greater than 10,000, which discharge into a sensitive watercourse need to achieve 2 mg/l in FE or 80% removal to meet the Urban Waste Water Treatment Directive requirements. Some other sites would have ‘Habitats Consent’, so have to meet 1 mg/l total phosphate in FE.
Currently, Anglian Water mainly removes phosphate by chemical precipitation using ferric sulfate or ferrous chloride. Some phosphate is removed biologically by ‘Luxury Uptake’ in activated sludge. However, as it is mainly removed chemically, there is an increase in precipitation and subsequent increases in sludge production, treatment and disposal, which increases operation costs. Therefore, Anglian Water is seeking new methods of phosphate removal to lower these rising operation costs.
Anglian water is currently trialing an Enhanced Biological Phosphate Removal technique developed by University of Capetown in one of the WRC sites in Norfolk. Therefore, they are open to trialing new and more efficient processes, so they would be interested in trailing EBR’s bioreactor and engineered E. Coli.
If Anglian Water implemented EBR’s bioreactor and engineered E. Coli into all of its WRC sites it is estimated 3383550kg of phosphate would be collected annually in accordance with 10mg of phosphate being removed per litre of wastewater. This collected phosphate would be worth a minimum of £338,355 according to current markets, and can be sold on to fertilizer companies to be recycled.

Scottish Water

Scottish water has 754 wastewater treatment works and 1,304 public septic tanks.
They process 840 million litres of wastewater daily.
Scottish water only sample for phosphate in raw sewage at a very small number of plants (about 4%) this figure is not representative. However they stated that the average in influent of phosphate is 3mg/l but can peak as high as 30mg/L in 2015. The actual raw sewage phosphate concentration can vary wildly due to influences such as seasonal tourist loading and trade loading. However they also stated that ‘Lowe et al. (2007) found that the average concentration of total phosphate (TP) in raw wastewater was 19.1 mg/l’.
Currently all phosphate removal at Scottish Water sites is precipitated out with Ferric Sulphate.
They have 30 wastewater treatment works with 2mg/L annual average Total Phosphorus consents. In 2015 the cost of ferric sulphate for these sites was £407,498 and through the use of ferric sulphate it cost Scottish Water another £15,575 to correct the pH at the sites where ferric sulphate is used.
Scottish Water like other wastewater companies is currently searching for an alternative method to remove phosphate and is currently trialling a biological method.
If Scottish Water implemented EBR’s bioreactor and engineered E. Coli into all of its wastewater treatment sites, it is estimated 12600kg of phosphate would be collected daily from the wastewater they process. The phosphate collected annually would be worth £459,900

Other Water companies

Wastewater company	Change in operation costs from 2014-2015 (£m)	Litres of waste water processed per day	Number of wastewater treatment plants	Estimate for the total phosphate collected daily (kg)	Value of collected phosphate annually(£)
Thames Water	Increase of £48.8	4,400,000,000	348	44000	1,606,000
Wessex Water	Increase of £5.3	460,000,000	407	4600	167,900
Northern Ireland Water	N/a	320,000,000	656	3200	116,800

(For calculating the estimated total phosphate collected annually, it was assumed that the phosphate content in the collected wastewater was 10 mg/l)

Survey Results

INCLUDE A GRAPH SHOWING THE PUBLICS RESPONSE TO THE SURVEY QUESTION ABOUT USING BIOLOGICAL METHODS INSTEAD OF CHEMICAL METHODS. COMMENT ON THE FINDINGS OF THE SURVEY AND EXPLAIN HOW THEY SUPPORT SETTING UP THE BUSINESS.

Target Market Segment Analysis

Wastewater Treatment Industry: This is EBR’s greatest potential target market. The current global wastewater treatment industry is worth £33.96 billion, which rose 11% from last year (2014) and is predicted to rise to £61.4 billion by 2019. This clearly shows an industry that is growing and is constantly developing. Furthermore, EBR’s products exploit a niche in this market as most wastewater companies do not use biological methods of remediation and instead use chemical methods which are becoming increasingly unstainable, inefficient and causing a rise in operation cost which can be seen from the market research. Also from the market research it is clear that in the wastewater treatment industry would provide the largest amount of phosphate which EBR could collect and sell to generate the largest profit.

Phosphate Mining Industry: EBR’s bioreactor can be set up so that the water which runs off of the plant passes through here before being released into the environment. This will help prevent environmental pollution and extract any phosphate which the plant has not been able to extract. Furthermore, with the possibility of EBR developing an E. Coli to extract heavy metal ions from water, it will allow their bioreactors to be used in heavy metal mining plants such as copper mining.

Chemical Synthesis industry: This target market may not hold as much potential as the wastewater or mining markets; however it still has significant potential. The bioreactor can be connected to the waste outlet of factories which synthesise compounds which contain phosphorus such as phosphoric acid, phosphorous pentachloride and phosphorus trichloride. Therefore, any unreacted phosphate could be collected by the engineered E. Coli and recycled. This will also help lower the amount of phosphate being released into the environment.

Distribution Channels

Currently, the market reach of EBR is national. This is because they have been in contact with large UK based wastewater companies such as Yorkshire Water, Thames Water, Scottish Water and Northern Ireland Water. We reached these potential customers directly via email. However EBR aims to develop links with distributors such as Toro Equipment, which supply wastewater treatment companies with the equipment they require. This will provide a second method of reaching potential customers and should increase the number of sales. Over the next 3 years, EBR aims to develop strong links with the majority of UK based wastewater companies. After 5 years, EBR aims to increase its market reach to the international level and start developing links with large wastewater companies based in Europe and America.

Strategic Alliances

EBR are currently receiving funding from Yorkshire Water and this is the most likely company that will trial EBR’s first bioreactor and engineered E. Coli. EBR’s aims to develop links with fertiliser companies such as Bunn fertiliser and Yara UK. These companies will provide access into the phosphate recycling market. EBR’s Research Department plans to work in partnership with the University of York Biology Department, which will ensure research moves forward at a relatively fast pace and that we will be able to lead the industry.

E-commerce and Technology

EBR plans to set up a website through which customers could buy the bioreactor and engineered E. Coli. Also information explaining how the product works will be found on the website and the steps which have been taken to ensure the safety of the product. By providing this transparency, it should help maintain a positive public opinion of the company, as well as encourage more potential customers to buy the product. Furthermore due to EBR’s links with University of York the researchers are using the latest equipment and technology available so they are able to test the engineered E. Coli at the highest standard, ensuring its reliability.

Tactical Promotion Plan

Promotion of the bioreactor and engineered E. Coli will take place at conferences, which are hosted around the UK, exhibiting the new technology and advances in wastewater treatment. One such conference is the WWEM conference which is hosted annually in the UK. This will help raise awareness of EBR and the products it offers. Furthermore, as the business grows and our product is refined to a higher standard it could be promoted at larger conferences such as European or global wastewater treatment conferences.

EBR’s main advertising message is to explain the benefits, financially and environmentally, of switching to using the engineered bacteria instead of using the chemical methods to remove phosphate that are currently in use. EBR plans to reach its specific target customer base, wastewater treatment companies, by advertising through magazines such as ‘Water & Wastewater Treatment’ a UK based magazine. EBR also aims to directly contact as many wastewater treatment companies as possible to advertise the bioreactor and engineered E. Coli.

As mentioned previously EBR aims to maintain a good PR by having an appropriate level of transparency to ensure the public’s confidence in the safety of the bioreactor and engineered E. Coli. Also, EBR will set up social media accounts on Twitter and Facebook to increase interaction with the public as well as advertise the business.

Credibility and Risk Reduction

As mentioned previously, EBR will focus on maintaining an appropriate amount of transparency to ensure and maintain good public opinion of the products the company offers. To increase the credibility of EBR’s engineered E. Coli they plan to send it to multiple independent labs where it can be further tested and peer reviewed. This will ensure that the engineered E. Coli is accepted by the scientific community. EBR plans to employ an internal control consultant. This will help minimise business risk as it will be their job to review EBR’s process and identify its weaknesses, which can then be rectified. Furthermore, EBR aims to develop a risk management plan which would help prevent any potential risks to the business and its processes.

Financial summary

From the market research it has been calculated that a wastewater treatment plant which processes 1,100,000 litres of wastewater a day spends annually £13,500 on the chemicals used to remove phosphate from the wastewater. This does not take into consideration the extra costs of the process which have to be used to cancel out damaging effects of the use of the chemical methods such as pH correction. Therefore EBR aims to develop a product which could meet the requirements of processing 600,000 litres of water daily and which would cost less than £14,000 to meet the customer’s needs.

Construction Costs

The factory which EBR plans to establish has an estimated cost of £15M. This factor will contain 2, 30m3 industrial fermenters, in which the engineered E. Coli can be grown. Furthermore there will be a research lab with 10 work stations. EBR plans to establish a contract with a metal fabrication company so the production of the bioreactor will take place off site. The cost of buying and installing a 30,000L bioreactor for growing the engineered E. Coli was quoted at $766,000 by LAVAL Lab.

Transportation Costs

EBR plans to form a contract with a chemical transporter company such as Wincanton, who will transport the bioreactors and the engineered E. Coli to the customers. This company will also transport the recycled phosphate to the fertilizer companies.

Staffing Costs

Position	Average salary (£) per annum	Number	Total cost (£)
Technical
Factory Manager	60,000	1	60,000
Chief Engineer	60,000	1	60,000
Engineers	35,000	5	175,000
Head Researcher	50,000	1	50,000
Researchers	40,000	10	400,000
Research Analyst	40,000	5	200,000
Lab Technician	30,000	3	90,000
Maintenance Manager	40,000	1	40,000
Maintenance Technicians	30,000	10	300,000
Shift Operator	35,000	6	210,000
Non-Technical
General labourer	25,000	15	375,000
Total			1,960,000