Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd, Spreadsheet Supplement

This case discusses the trajectory taken by a Singapore-based entrepreneur who embarked on a multimillion business venture to turn food waste into energy. The brainchild of Edwin Khew, a veteran in the waste management business, IUT Global was formed in 2005 to set up and operate Singapore's first organic waste treatment plant. IUT's bio-methanisation plant was an ambitious project. Budgeted at $60 million, the plant was designed to process 800 tonnes of food waste and produce 10 megawatts of electricity most of which would be sold to Singapore's national electricity grid. Investors were optimistic that with their state of the art process technology and a ready customer, the plant would generate a steady income stream once it was set up and running. However, from the start of production although less than 10% of food waste in Singapore was being recycled, IUT encountered problems in the collection of food waste needed to feed its plant. It was unable to collect enough food waste and those collected contained a higher percentage of contaminants than projected. Furthermore, food operators resisted the need to separate food waste from solid waste. Unable to meet its production targets, and after three years of losses, in 2011, IUT entered into liquidation, and with it the closure of Singapore's first large scale food waste-to-energy facility. The case explores the following topics: First mover pitfalls in a sustainable energy venture; Analysis of new venture business plans; Implementation challenges for start-ups; Assumption testing/sensitivity analysis in costing of new ventures.