BHSL is a pioneering, award-winning Limerick company that converts poultry manure back into energy, which it can use to heat the chicken houses and sell electricity back to the grid with the leftover being converted to high potassium and phosphorus fertiliser.
Based in Kantoher Business Park in Limerick, it was established by Jack O’Connor, BHSL’s chief technology officer, who designed the patent-protected system.
As is usually the case when it comes to business startups, necessity really was the mother of invention. After making an investment of over €250,000 in a new poultry shed in the mid-1990s to expand the business, in 1998, local farmers were told that they would no longer be permitted to spread chicken manure on lands in the west Limerick region because extremely high phosphorus and nitrogen levels had led to groundwater pollution.
The instant implementation of this regulation meant their poultry business was no longer viable, so they had to find alternative uses for the manure.
Burning manure
Jack focused on the idea of burning manure to produce energy. This was already being done at power plant level, so he looked at this technology, and miniaturised it, with the vision of one day supplying this technology to individual farmers for on-farm use.
He started the journey with a 1t/day fluidised bed combustion unit on his own farm to prove in principle that the technology worked and found that not only could he use all of the manure as a fuel, but it removed the need for expensive LPG gas. And the abundant heat available gave great conditions in the poultry shed for growing birds.
Jack’s brother Declan had a business background, having worked in finance roles for companies including Kerry Group, Eircom and JC Decaux. He joined Jack and used his business know-how to help build what was then a small family business into what is a thriving global company today.
Bob Murphy (centre) owner of the Double Trouble Farm in Rhodesdale, Maryland, with his sons JB (left) and Bob (right) in front of the BHSL unit recently installed on the 112 acre farm.
He is now managing director while Jack explores new applications for the flagship technology as director of research and development.
Overcoming regulatory barriers has been the biggest challenge since then. In 2012, the UK’s Environment Agency refused approval for the use of BHSL’s technology. This decision would have killed the business and it led to an intensive campaign in Brussels to develop new environmental rules on the burning of poultry manure. As a result, European Regulation 592/2014 came into law in July 2014 across all 28 member states.
They undertook a further campaign in response to changes in regulation in the UK in 2016 which would have removed environmental supports for producers of heat and electricity using BHSL’s technology, damaging the investment case for poultry farmers investing in a BHSL unit.
Policy change
They were able to ensure that the Renewable Heat Incentive policy change was reversed, thereby restoring confidence to potential buyers in the market who had built their investment assumptions on the basis of policy stability. BHSL leveraged its strong relationships within the industry to create the Sustainable Poultry Farming and Energy Coalition that backed its campaign, gaining vocal support from major industry players like John Reed, chair of the British Poultry Council and agricultural director of Cargill’s European poultry business.
As part of this, they have signed a 20-year partnership with Cargill and, as of 2016, had clocked up over 111,000 successful hours of operation on farms in the UK and Ireland.
As it is also the only company that currently meets both the US and EU environmental regulations, it has been able to follow an aggressive expansion policy both sides of the Atlantic, evidenced by the fact that last year it agreed a $4m manure-to-energy pilot project with the state of Maryland, with BHSL investing $3m and the state of Maryland investing the balance.
With 11,000 commercial poultry farms in the US producing 7.5bn chickens each year, BHSL is targeting the country as a key export market, with chief executive Declan O’Connor estimating the potential size of the US market opportunity for BHSL to be “conservatively $500m”.
BHSL has been recruiting high-profile, well-driven people to help take its business forward in the past couple of years. In 2016, it announced the appointment of Denis Brosnan, former founder and CEO of Kerry Group, as chair of the company.
Brosnan is credited as the driving force behind Kerry Group’s transformation into a multinational food and ingredients group.
He took the helm of Kerry Co-op in 1972 and led it to be the first agricultural co-op to float on the Irish stock exchange 1986.
Kerry Group’s scale now makes it one of the top 10 companies in Ireland. Along with the appointment of Brosnan, four new additions join the company. Former ESB chief executive Padraig McManus, retired Supreme Court judge Fidelma Macken, veteran corporate financier David Hickey and Limerick businessman Tom Lynch have also joined BHSL’s board as non-executive directors.
BHSL has started to look at ways that it can expand the range of applications of its patented fluidised bed combustion (FBC) technology, in the first instance to serve the municipal and industrial sectors in extracting value from waste products.
With this in mind, and having raised €12m in two separate equity drives over the past couple of years, earlier this year the company acquired Hydro International, a leading wastewater and effluent treatment firm.
Through integrating Hydro and BHSL’s technologies, they’re able to provide a full treatment solution for customers, combining Hydro’s expertise in removing water and moisture from waste, with BHSL’s ability to generate heat and electricity from the solid residue. The ash remaining following the FBC process provides an additional revenue stream, on top of electricity/heat cost savings, given its high phosphate and potash content, which makes it an ideal fertiliser.
This is only the first step, however, in their strategy to expand into a broader environmental solutions business, focused on extracting value from waste products.
They are working to develop new applications, including sludge, meat and bone meal, and food waste.
It is now building a strong sales pipeline for product delivery in 2017 in export markets such as the US, New Zealand, Poland, Germany, Holland, Italy and Saudi Arabia.
BHSL Hydro (as it is now called) has been recognised for its efforts and has won a number of awards in recent years, such as at The Irish Times Innovation Awards where they won the Best Innovation in the Agri Food sector in October 2017.