00:00:03 Chris Sass
Your trusted source for information on the energy transition. This is the insiders guide to Energy podcast.
00:00:15 Chris Sass
Hey, energy insiders. Welcome back to the insiders guide to energy. I'm your host, Chris Sass, and this is another episode of the Insiders Guide to Energy.
00:00:22 Chris Sass
What an exciting week we have. We're going to talk to Aidan Lee, the Co founder and CEO of Crafts yet and what they're doing is kind of interesting. They're taking palm kernels and turning that into graphite. Graphite. As we all know, is one of the components needed in battery technology and nanotechnology.
00:00:41 Chris Sass
She takes one man's trash and he turns it into treasure.
00:00:46 Chris Sass
Aiden, welcome to the program.
00:00:48 Aiden Lee
Yeah. Thank you, Chris. Yeah, I I think you you kick start the such a good way, one man trash one man one way is a little bearable item for the industry. Yeah, I'm madly here. I'm CEO. I'm a co-founder of Crochet Technology and yes we are. We're just recently listed on the NASDAQ.
00:01:08 Aiden Lee
The business model of transferring and recycling the waste from Malaysia to become a valuable products that widely used in electrical vehicles.
00:01:19 Aiden Lee
Thank you, Chris.
00:01:20 Chris Sass
It's a pleasure to have you here, and it's an interesting concept. So we've, you know, with the energy transition, EV's and electrifying everything, there's no one silver bullet that solves all problems. But one of the things that comes up is supply chain and where we're gonna get all the materials. And one of the materials that you need in battery tech is graphite. And so is your company name.
00:01:40 Chris Sass
Suggests you're you're in the graphite business. Maybe you could take a second and explain to our audience what it is that you proposed to do and what you.
00:01:48 Chris Sass
Are doing.
00:01:50 Aiden Lee
Yeah, uh, basically graph jet is recycling the waste. We call it a pump. Corner Shell is such a waste that very rich in Malaysia's second largest palm oil producer come after Indonesia and Malaysia has a lot of we're talking about 5 million tonnes every year.
00:02:09 Aiden Lee
On the pumpkin and shell waste. So basically we transform the waste to become a value added product. We call it graphite. Graphite actually is such a important raw materials and call it the critical raw material as well As for.
00:02:24 Aiden Lee
Now, and because it rank above, lithium is much more important than lithium, because graphite is mainly used in the battery and not material which is the storage system in the battery, which is a negative sign. So you always see in the battery and then it is very important and you know some of the country actually dominate this raw material.
00:02:45 Aiden Lee
497%.
00:02:47 Aiden Lee
Since you know EV has been out of market and and all the competition you know, so graphite is our main raw material right now. Our output which we are focusing on manufacturing graphite from the ways and supplying to all the OEM automakers and and supporting the supply chain to create a better ecosystem.
00:03:07 Chris Sass
Right. So so you have these palm kernels and the shells are the house, they're basically disposed of today and and they have a lot of nutrients and a lot of things in there. And you got to be careful of how you dispose of them, whatever reading, you can't just get rid of these. And so your premise is you worked with a couple of universities in Malaysia and develop some technology. We could take this and.
00:03:22
Yep.
00:03:28 Chris Sass
Basically turned it into a usable material, which is basically extracting that and turning it into graphite. Is that the highest level? What's happening here?
00:03:35 Aiden Lee
Yeah. In terms of researching and the whole process development wise internal technology graph check actually invented the the whole process and technology ourselves and we're working with all the University of Malaysia to run all the tests, run all the verification, all the testimonials with all the.
00:03:55 Aiden Lee
Few experts.
00:03:56 Aiden Lee
Scientists outside graph check technology and basically just to to verify the the the raw materials and to run the test how good the product is, how solid graphite the composition is to mainly use in the batteries or any other application industry.
00:04:15 Chris Sass
Right. And you're competing with open mining or what's the general way that graphite is gathered today? How does the battery industry get its graphite?
00:04:26 Aiden Lee
Yeah. Thank you. Chris, you asked a really good question in terms of opera mining site, we we don't really mind grafite of course, you know there's different sources of getting the graphite in, in the whole supply chain. In the first one, you can be you, you can mine from a natural resources.
00:04:45 Aiden Lee
Uh, inconsistent chances of.
00:04:48 Aiden Lee
Polluted. You know, on the purity impurity of the graphite, the risk is there for many natural mind. And the second source of getting the graphite out is that you're going to produce from a petrol, coke or charcoal, you know, which is the coal. Both are commodities, are very expensive, fluctuating industry.
00:05:08 Aiden Lee
And that's why it makes a graphite with such expensive and such valuables. And of course very difficult to get it and graph check made another way which we use waste.
00:05:19 Aiden Lee
The converted to become a graphite that there's a value.
00:05:23 Chris Sass
All right. And now when we initially spoke, it was around the time I think we were talking about Nevada and your company is making a play to supply the North American battery market, explain a little bit of what you're doing and why that makes.
00:05:39 Chris Sass
That's.
00:05:40 Aiden Lee
Yeah. Basically we we try to expand ourselves in North America and we take this as a big opportunity for the company because you know, last year, December actually China has limits and banned export of graphite to another country including North America including.
00:06:00 Aiden Lee
Asian Country, Japan, Korea and most of the country are panicking where to source the graphite when China is the biggest suppliers, conquering the whole market and we thought that, you know, craft jet being the one of the sources.
00:06:18 Aiden Lee
One of the biggest one of the biggest opportunity for us to be in North America and the 1st and the only one ever to convert the ways to become a graphite and we are the first one also in production by end of June this year in Malaysia and if you talk about avada, you know that that's our big opportunity. We will expand ourselves in North America.
00:06:39 Aiden Lee
We are listed on the NASDAQ and we try to contribute ourselves, you know, putting ourselves on radar, which as much as of our automakers or OEM battery makers, you know, you do not need to go out to China, you need to get out of North America. You could source it in North America. That's what we try to position ourselves.
00:06:58 Chris Sass
So you're saying source it in North America and I think the Devils in the detail, your colonels come from Malaysia. That's that's where the source of the palm oil kernel is. You do some sort of pre processing and then ship stuff to Nevada. Is that how this works?
00:07:16 Aiden Lee
Yeah, but basically how we we we process the whole manufacturing process is that because pumpkin shell is not allowed to export or import to any other big country any other country so.
00:07:30 Aiden Lee
The the challenge is that how are we going to process and, you know, produce in Nevada where we can't import the fixed stock from Malaysia going to the United States. And the way you're going to do it is that we're gonna run a free first process, refine the hope the first process from pumpkin shell to become a hard carbons.
00:07:49 Aiden Lee
And we then will ship the hard carbons to the United States, which is Nevada facility to rerun the process and refine it to become a graphite graphene. So that's that's the way that we do it. And you know, yeah.
00:08:02 Chris Sass
So when I look at let's say Scope 3, emissions from this process or something, we have a long process. So you're basically farming palm oil, which has consequences, and there's growth in palm oil, right? So that that may contribute to deforestation. Then we take that waste that's come from the palm oil and we're transforming it into something. And then we're shipping it across the world.
00:08:22 Chris Sass
It to make a product help me understand how this compares in emissions and scope 3 emissions to maybe other forms of getting graphite you you said from coal or from hydrocarbons or things like that. How does this compare?
00:08:35 Aiden Lee
Yeah. If you're talking about carbon emissions, we are totally, definitely better. I mean, we're able to lower down our objective, you know, which is to to to limit as slow as compared to any other producer in the world. We're talking about every kilogram or 2.95 emission.
00:08:55 Aiden Lee
From craft chat, if you're talking about mining, we're talking about 7:00.
00:08:59 Aiden Lee
In kilogram, we're talking about production skill from coal and petrol, coal in China, we're talking about 10 or or 15 kilogram per kilogram production of graphite and we're talking about graph, it's only running at two point 92.9 and and per kilograms of graphite production. And we are still working towards.
00:09:20 Aiden Lee
Targets to neutralize, I mean the the carbon emission by getting more renewable energy to power up the whole power plant. I mean the the whole manufacturing plant.
00:09:30 Chris Sass
And the the markets you're you're focused on, you started your like you said in June, your first production or goes takes place locally and is your your second market that US then is that your growth plan?
00:09:42 Aiden Lee
Yeah, definitely the the, the, the first manufacturing plant, the midsize manufacturing plant will be launched in end of June this year in Malaysia and after that we're going to focus on our, I mean the expansion in North America talking to foreign government, state government and getting the supports in terms of licensing and all.
00:10:00 Aiden Lee
Plan and uh, that's our second plan to grow our business in North America and of course not just North America, in Europe, in Saudi, Asia, we also you know, put our feet in to to talk to a few conglomerates, you know local local gambling company to to form a relationship strategies partnership.
00:10:20 Aiden Lee
To to to see how fast we could scale ourselves up to meet the shortage of the the graphite in the market.
00:10:28 Chris Sass
Now with the the current bumps in the US EV acceptance in the market going on and you're being a publicly traded company or working with SPAC and having having a public end to your company, how is that impacting you are, are investors looking short term for you? Are they looking quarter over quarter or is there some sort of longer term view for you is?
00:10:48 Chris Sass
Is the market being kind and understanding that there's going to be demand no matter what?
00:10:52 Aiden Lee
Yeah, I I think electric vehicles industries in terms of long term being the first pollute, I mean the most polluted, you know statistics around the world and every every country in Korean, Europe, North America and South Asia try to work towards net 0.
00:11:13 Aiden Lee
Thing electric vehicles transportation are really the key and very important for the world and for our next generations. And we are just complete our transaction to complete these specs going to the IPO on March 15 and of course now we are trading right now and talking about investors. We are hoping to to.
00:11:33 Aiden Lee
To secure more long term investors strategy investors to join the company. Of course, looking at the long term, the definite industry is growing, graphite industry is growing, the graphite is growing.
00:11:47 Aiden Lee
Not just electrical vehicles. Applications in terms of graphing, it's also widely used in the semiconductors as well. Steel industries, you know. So basically the, the, the, the, the, the application for graphite, graphene is so wide. And in terms of future trends of the whole markets.
00:12:07 Aiden Lee
I think graph just standing very confident that it will be a long term supply.
00:12:11 Aiden Lee
OK. And of course we're talking to few long term investors you know to be part of the team to part of the investors in craft. Then looking at we're going to scale ourselves up as much as we can to to feed the shortage of graphite in the industry. And we're talking about a few million tonnes of graphite shortage in the industry.
00:12:31 Aiden Lee
So that's our aim.
00:12:34 Chris Sass
And I guess the the thing I don't understand is the palm oil business is is?
00:12:38 Chris Sass
Is how much supply of raw material do you have and how big can you grow with what exists today from the palm kernel shells?
00:12:48 Aiden Lee
Sure, sure. Uh. Basically every year Malaysia do have 5 million tonnes of pumpkin and shell waste. In Malaysia, we're talking about just Malaysia, 5 million tonnes. And in terms of efficiency of our manufacturing process will take about 3:00 to 1:00 ratio conversion which is.
00:13:06 Aiden Lee
3 tonnage, I mean, three ton of uh pumpkin shell with I can produce one ton of graphite. So if you're talking about 5 million ton of Malaysia pumpkin shell waste, it would produce and we are running like 1.51 point seven 1.8 million tons of graphite. But you know, I mean this really takes such a long journey.
00:13:27 Aiden Lee
Graph charts in terms of mentally you know the team competency. Of course the investor supports and the financial institutional you know to to, to work with us in the long terms to hit our long term goal on this.
00:13:42 Chris Sass
How much energy does it take to do your process? What what? What is the process? Maybe we can, you know, kind of go a little bit through what you're able to talk about and then what kind of energy does it take to transform this?
00:13:55 Aiden Lee
We're talking about 30 to 40 megawatts maximum. We will have a reserve for another 10 megawatts with about 50 megawatts.
00:14:02 Aiden Lee
For the whole manufacturing process, so definitely energy efficiency wise is very upkeep and and well upkeep and of course we're talking to some renewable players to try to neutralize our carbon emission by taking more renewable energy in our whole manufacturing process as well.
00:14:22 Aiden Lee
You know, if we could could lower that our our 2.9 carbon emission to 1 kilogram to every one kilogram of production of graphite that would be even greater that that's the current goal that we're focusing on. Of course, we're putting ourselves high hope that we could able to new.
00:14:41 Aiden Lee
The whole carbon emission with the whole manufacturing process improvement.
00:14:45 Chris Sass
And then I guess the question I have and and maybe it has to do with Giga plants announced or whatever, but why Nevada?
00:14:54 Aiden Lee
Novartis, you know the how how we started to explode in Nevada is because of the federal governments that give us some of the selections in Nevada and and we eventually found that Nevada, there's quite a numbers of battery automakers, OEMs situated in in Nevada and.
00:15:13 Aiden Lee
We even thought that, you know, only one that would be one of the, you know, strategies location for us to be in.
00:15:20 Aiden Lee
Air and all together in a much more neurons compared to our all supply chains. You know, all customers so that that that's what we thought to be in Nevada and and it's a business friendly location as well in terms of commercial wise.
00:15:35 Chris Sass
So the the amount of material you're importing, would it then go into like Long Beach and then come up by rail to Nevada or how would your material get?
00:15:42 Aiden Lee
Nevada. Yeah, we we're still working on that part on in terms of transportation wise logistically and and you know in terms of metrics, the team are still moving on in discussion with the federal government because the Nevada is so big. We are thinking about whether to stick to Ninja Spring or we're going to a Northern Nevada.
00:16:04 Chris Sass
Awesome. So I guess what are some of the challenges with with the acceptance of your technology, what what are some of the hurdles that you've had to come overcome with folks wanting to take your graphite or getting your introduced into the battery ecosystem?
00:16:22 Aiden Lee
Yeah, I I think I think in terms of awareness of the companies are pretty new. The the companies are from Malaysia and we are pretty new on IPO on the NASDAQ and we're going to build ourselves up in terms of awareness and image reputation industries. The challenge this is one of the challenge and the second challenge.
00:16:42 Aiden Lee
And you know, going through the qualification process for all the OEM model makers.
00:16:48 Aiden Lee
We any industries, you know, especially materials like graphite material like graphene, there's a lot of testing going on, a lot of verification going on. The qualification internally is going on. I think that really takes up a lot of time for us to secure and finalize the the of takes.
00:17:08 Aiden Lee
Agreements and of course, you know in terms of of of take with some of the potentials MNC.
00:17:15 Aiden Lee
The OEM model makers, it's kind of really a big challenge for us because they want us to be like, oh, you can, you just, you know, suppliers, you know or furnishers a number of big numbers of graphite like next month or next year and you know to build a manufacturing plant.
00:17:36 Aiden Lee
Really cope with that supply chain. It will takes like maybe two years or three years because we're talking about 50 thousand 5000 thousand ton or or 500,000 ton or 60,000 tonne every year and our our mid-size plant in in Malaysia, we're only producing 3000 tonnes.
00:17:56 Aiden Lee
Every year.
00:17:57 Aiden Lee
And we are considered one of the biggest outside China running in production with 2000 tonnes graft fried production every year. And if you're looking at the Nevada facility, we're talking about 20 acres of land. We are focusing on a 10,000 tonnes graphite production every year. So if customer come to say the.
00:18:18 Aiden Lee
Ohh hey, graph Jet can can you supply me like 50,000 tonne next year? I said we we couldn't do it. So the the problem is that how are we going to scale up as fast as we can and you know given the timeline the off take the urgency of the market.
00:18:33 Aiden Lee
And of course, given us the Capitals funding side of the challenge that we need to secure and to be stabilized in terms of the whole operation, that's one of the big challenges.
00:18:46 Chris Sass
So is this different than let's say a PPA where I buy energy ahead of time? Since graphite is kind of more, is it just more of a commodity and people are only willing to buy what's available today, or are people investing much like you'd buy a PA in future production and helping you put a facility in to get that?
00:19:03 Chris Sass
Graphic.
00:19:04 Aiden Lee
But yeah, I think you know at the moment we we we don't even we didn't even consider about the PA's in into the whole business model wise but you know to to to scale ourselves out with the joint ventures, some of the partners globally and of course being on the NASDAQ.
00:19:24 Aiden Lee
Platform as a public company right now, and we also focusing to to raise as additional funds from our investor.
00:19:31 Aiden Lee
Just to really scale ourselves up, you know, I think that's the.
00:19:34 Aiden Lee
Best way forward As for now.
00:19:35 Chris Sass
What I'm hearing is you need to build the facilities you need to manufacture it, so you can't basically pre sell. The capacity is and and so you're partnering and building the material up. But there there, isn't it a market to pre sell?
00:19:48 Aiden Lee
Yeah, I I you know, even I could able to presell it. You know the problem is we didn't know that the timing how fast you know how fast we could get ourselves up you know let's say you know some customers say oh I want you to supply me 2000 tons per year.
00:20:04 Aiden Lee
And if it doesn't, would take me 4 years to build and the customer said Ohh it's too long for them, they might as well go back to China. Might as well go back to somebody else, you know, but or maybe just they just just delay the manufacturing plant process. So I I think it's not really a big challenge for us, but it's some kind of good opportunity for us. It depends on how we look at it.
00:20:24 Aiden Lee
And what is the expectation of the customers? That's the most important things part and we mostly delivered what we promised and we want to, you know, give out any empty promise. You know, we're gonna make it for you and you know, by when and by where. I think it's not ethical for me for the comp.
00:20:43 Aiden Lee
So.
00:20:44 Chris Sass
A recent development in the news of the Biden administration included A2 year exclusion on carbon for the the IRA in the US. Is this mean that there's gonna be kind of a space race or a race equivalent to get locally sourced carbon? Is that why the exclusion? Because we just can't meet the demand today.
00:21:04 Aiden Lee
Yeah, I you know.
00:21:09 Aiden Lee
No problem. Uh, basically. You know, this decision come out from Biden's. I'm not sure whether it's a political move related thing, but I think I'm not in the right position to comment on that. But in terms of business industry wide and graphite, that definitely for us, we are doing good because.
00:21:29 Aiden Lee
We will produce our own graphite. We have our own fish stock. We don't rely on any third party or partners to really give us a fixed star or or maybe run the production for us in Malaysia and that's the best thing about it.
00:21:44 Aiden Lee
And a lot of graphite producer in North America or the so-called graphite producer or even in some other country.
00:21:54 Aiden Lee
It may be some thread for them because they probably don't really produce their own graphic and they probably get the source from you know.
00:22:02 Aiden Lee
At China, or maybe in China, to trade and repackage and sell to any automaker in the industry, so for them are very big challenge for us. I think we are very good opportunity, but I think you know evidence has not opened its eyes too much focusing because you know graph check is basically in north.
00:22:21 Aiden Lee
America and we are here to be in North America to supply to all the OEM's to to contribute to the supply chain. Why you should, why you want to exam. You know the the graph file from the IRA. I just don't understand. So it may be some other intention. Yeah. I'm not too sure. But for us, basically overall, you know, in terms of graph.
00:22:41 Aiden Lee
That is why it's very good.
00:22:44 Chris Sass
It doesn't doesn't impact you that much. And then what about recycling a graphite and battery? So as the EV business grows, we're gonna have quite a few batteries to recycle. We've talked to a number of recyclers or planned recyclers on the podcast in the past.
00:22:47 Aiden Lee
No, not now.
00:22:59 Chris Sass
Is is there? Is it reclaimed? Quite a bit? Is the is the anode technology able to be reclaimed and put back into the cycle? Then once these batteries have been used?
00:23:09 Aiden Lee
From from, from my perspective is that if you recycle something the the the purity and the consistency of the battery materials or the raw materials is definitely not there in terms of quality wise, you may recycle up to 70 percent, 80%.
00:23:28 Aiden Lee
But you know, if you're able to source from something like from graph check wise currently.
00:23:32 Aiden Lee
Using as even consistent and better quality and you don't need to recycle it and it's at a better cost. And why do you need to? Recycles the existing raw materials, the batteries and add on because you know the cost definitely will be higher. You know that's a better option here from craft check you know the the question for the OEM battery.
00:23:53 Aiden Lee
Maker. Is that why do we need to get something from a recycled company? Why not just get something brand new from craft? Check you know, just produce purely from?
00:24:03 Aiden Lee
Waste and it's a brand new and not material.
00:24:05 Chris Sass
I guess what?
00:24:05 Chris Sass
I don't understand with your response is at the end of the day, it's still the same components. It's graphite it. It doesn't matter how I got it right? I mean you you happen to to come about it from palm kernels but at the end of the day, if I'm recycling it, am I not also making just graphite and maybe I don't understand something here.
00:24:25 Aiden Lee
OK, sure. Let let me clarify this, that there's different grades of graphite in, in the industries. That is a Grade B, grade C grade, I would say different sizes, different particles, different nanomaterials, different sizes of the graphite, different sizes.
00:24:45 Aiden Lee
Different material, different quality of graphite make different kind of battery and you talk about you're using a low tier graphite, you you're only able to use in a motorbikes electric bike, that's all. You can't go into electrical vehicles trunk.
00:25:02 Aiden Lee
Cars. But you want to go to cars levels on on the battery and the material. You need a top notch quality, consistency and quality has to be secured. Otherwise there's a lot of safety issue inconsistent. Even a phone you know could explode. You talk about small battery.
00:25:22 Aiden Lee
If you're getting on something on some truck or some car with inconsistent battery or no materials, you're having a result you know.
00:25:32 Aiden Lee
You know I.
00:25:32 Chris Sass
Mean. So, so. So you're saying there's different qualities. One thing when you were talking about that, that also came to mind. So I I take at face value that you're putting in the the the palm kernels. What other materials go into the process what other raw materials do you need to create your graphite.
00:25:53 Aiden Lee
Basically, from in terms of fixed stock, it's just pumpkin and shell. And of course during the whole process we'll have our own catalyst. Our own activity is part of our sole proprietor technology invention to make us of graphite. But basically the the main contribution is purely because of the palm kernel shell.
00:26:14 Chris Sass
And now with your eminent plant opening or your your production locally.
00:26:21 Chris Sass
How is that coming is you? You said it's just around the corner. I mean, the date you gave is.
00:26:24 Chris Sass
Very.
00:26:25 Chris Sass
Very close.
00:26:26 Aiden Lee
Yep.
00:26:28 Chris Sass
Tell me what? What to expect when? When do we expecting things to roll and what are the first users going to be of your graphite coming out of the?
00:26:36 Aiden Lee
Sure. Uh, basically we are very excited and uh, this is one of the mid size uh manufacturing fest still going to be launched end of June this year in Malaysia and it's huge and everyone is very excited and even our customers I don't name it but one of the the the one that we are disclosing Toyota in Japan.
00:26:56 Aiden Lee
They are also very excited they're going to be serious to join us for the grand opening in Malaysia and this is.
00:27:04 Aiden Lee
This is very exciting and we thought that this is another milestone for companies achievement and you also will open the world. You know you know to get to know craft check internationally globally.
00:27:17 Chris Sass
Is is the feedstock locked to the palm kernel or are there other biomasses that you could use to replicate this in other market?
00:27:28 Aiden Lee
All right. During the whole research and innovation process before the IPO, we we spent a lot of time in getting some other biomass such as rice has cornstarch.
00:27:42 Aiden Lee
Robos rubbish. And there's many, many even coconut shell that we use it to to.
00:27:50 Aiden Lee
Cycling, including pumpkin shell, of course. Eventually we found out that, you know, pumpkin shell is much more consistent. It's first place and a very high content of carbon, and the second one and the third is because of the fixed stock is Malaysia is the second largest of palm oil. So fixed stock is not something that we don't need to worry about.
00:28:10 Aiden Lee
And the cost of fixed stock is really, really low compared to you know some other producer in China using petrol, coal or coal. We're talking about maybe 10 times more.
00:28:20 Aiden Lee
As if.
00:28:22 Aiden Lee
Yeah, I think that's the advantage of we are using palm in much more stables and consistency is the one thing. The most important part is consistency.
00:28:32 Chris Sass
Thank you, Gennady. And it's been a pleasure having you on the program. We look forward to following you, seeing what happens with your NASDAQ, your stock and the growth of your solution here in North America.
00:28:42 Aiden Lee
Thank you, Chris. Thank you very much.
00:28:45 Chris Sass
Insiders, thanks for listening to another episode of the Insiders Guide to Energy. It's been fun bringing this episode to you. If you enjoy the content we bring and you want to continue hearing this content, there's one favor I have ask of you and it's the biggest thing and biggest compliment you can make for the entire team of 12 of us that bring you this show. It's to hit the like button or to add a comment that lets others know that the show has quality.
00:29:06 Chris Sass
And it also helps us attract new guests for the future episodes. So please take a second and hit the like button. It is greatly appreciated and we'll see you again next time on the insider Guiding Energy Podcast. Bye for now.
