Converted Organics goes public on promise

Converted Organics of New Jersey, a company planning to manufacture and commercialize organic fertilizers made from food waste, has gone public on the NASDAQ, trading under symbol COINU.

But it's going to take the company some time to start shipping product. Its first production plant is at least 12-15 months away.

"It seems an eternity, but that's just the time it takes to build the facility," Edward J. Gildea, President and CEO of Converted Organics told the Cleantech Group today, in a narrowly-ranging interview given the company's current quiet period.

According to the company, food waste represents a large category of solid waste, but in general it's not recycled. Less than two percent of food wastes in the U.S. are managed through composting, given its difficulty in scaling.

Converted Organics is planning to use food waste digesters, much like those used in biofuel production, to convert food waste into an organic biostimulant, a natural fertilizing product used in organic farming. According to research by a Canadian university, the compound also has fungicide properties and reduces nitrogen run-off.

"It's not very different than the process by which yogurts are created," said Gildea. "You add a bacteria or culture, and expose it to heat and air."

The company licensed technology for its forthcoming plant from International Bio Recovery (IBR) in North Vancouver, British Columbia. IBR develops equipment based on Enhanced Autogenous Thermophilic Aerobic Digestion (EATAD), originally developed and used in Europe. The process uses closed digester tanks in which the process of natural composting is accelerated. What would normally takes weeks to decompose only takes days, according to IBR, and without odor.

Converted Organics drew its original inspiration from an RFP issued by the City of New York for a solution to organic waste generated by Hunt's Point, the marketplace where most of the produce coming into Manhattan is first processed. While not yet awarded, the principals of the company said they saw an opportunity beyond simply that one New York contract.

Converted's initial plant in Woodbridge, New Jersey is to be the first commercial scale EATAD plant in North America. It is to be based in an area already zoned and licensed for recycling. While permitted for processing 500 tonnes a day, Converted says it plans to initially process some 250 tons of organic waste a day.

In addition to going public last week, Converted also announced the simultaneous closing of a tax-exempt New Jersey Economic Development Authority Solid Waste Revenue Bond deal in the principal amount of $17.5 million.

In order to close that money, Converted's Gildea said they have begun to reach out to potential customers. "Several companies have given indications of interest, although we do not yet have firm contracts," he acknowledged to the Cleantech Group.

Converted Organics is down somewhat from its $5.50 IPO of last week, trading this morning at $5.05 on volume of half a million shares.