Spartel Pty Ltd is an environmental engineering, technology, and consulting business, specialising in the fields of sustainable treatment and management of solid waste, composting, integrated waste management strategies, vermiculture, and contaminated site remediation. The company was established in 1995, following founder Dr Harrie Hofstede’s first successful patent application while working towards his PHD at Murdoch University. While the primary driving force behind Spartel’s success has been its intellectual property, the company also provides a specialised consulting service under Hofstede & Associates, and has developed a line of volume reduction equipment, most notably for the bottle and glass management sector.
As Spartel’s business model requires a significant amount of costly research and development, the creation of cash flow avenues is essential. Spartel accomplishes this through the establishment of numerous businesses, such as BottleCrusher, Hofstede and Associates, and an organic fertiliser production company, which has seen notable growth in recent years. The technologies that Spartel develops with the cash flow provided by these businesses are then proven up and readied for commercial sale, usually being placed in their own separate business in order to leave opportunities available to investors and other expertise to help bring the products to market.
The technologies developed by Spartel all share the reduction of the user’s carbon footprint as a common theme. The BottleCrusher in particular is capable of cutting the costs, frequency, and volume of waste collections by 80%. “Instead of collecting 5 truckloads of empty bottles, you only collect one truck of crushed glass, resulting in a huge reduction of fuel and other costs,” says Dr Hofstede. Spartel’s composting technology reduces methane emissions in organic waste, creating a fraction of the carbon footprint through its composting process. The company’s use of specialist contractors both in the professional and operational fields aid in the achievement of the best possible project outcomes, while reducing the risk taken on large-scale projects and minimising the cash flow demand that such endeavours can generate.
Spartel’s current focus is directed towards the commercialisation and construction of plants for its FABCOM® technology. “We just completed the construction of a plant in Victoria, to process source separated organic waste” says Dr Hofstede. The technology was particularly designed for source-separated organic waste, an alternative to the numerous large-scale Mechanical Biological Treatment plants, which produce very little reusable or recyclable materials. “Even the compost tends to be very contaminated, because it’s been mixed with garbage,” he continues. “The only way to properly recycle organics is to source separate and compost all of the organic waste, and to compost that so that it’s never been mixed with other garbage. This is now an evolving trend in the industry, which is moving more towards source-separated organics. It’s the opportunity we’ve been waiting for, and the development we’ve been waiting for; the technology is ready, and the market is ready.” In addition to the development of the FABCOM® technology, Spartel is also focused on the production of products from the generic compost that is produced by the systems, with the aim of developing the most suitable and beneficial products for agriculture and horticulture operations. “We have solutions for a number of different commercial paths in Australia to add further value to the processed organic waste or local agriculture, and make their local businesses and plants more viable,” Harrie says, noting that the most prominent issue restricting the growth of horticulture is the scarcity of irrigation water. “They just don’t have the water to utilise all the farmland. By using products in the soil that can reduce the amount of water required by 25%, they can grow on 25% more of their land with the water allowance that they have. These are really significant efficiencies that agriculture needs.”
Through partnerships with a number of government and environmental departments, Spartel works to align its technology with current government policy. “The waste management industry was very much created and guided by government policy, both in terms of resource recovery and environmental policy,” Harrie explains. “So the government policies are very much dictating what’s happening in the marketplace for the processing of waste materials. The main drive of the government is to divert waste away from landfill, which we fully support.” When taking on projects, Spartel also engages closely with architects, construction companies, intellectual property lawyers, and manufacturers of the specialised equipment that it has designed. Upon the completion of the FABCOM plants, the company will work with laboratories that focus on product quality control, as well as specialist support companies that monitor and probe quality assurance.
Dr Hofstede feels that Spartel is well positioned to take advantage of the shift towards waste volume reduction at source, pointing out that such practices can create significant new efficiencies, and stand to change the face of waste management, forcing many conventional waste management companies to alter their business model. “We’ve seen quite a widespread introduction of compactors for cardboard and plastics, but we also see the volume reduction of particularly waste bottles,” he says. “They have huge amounts of volume, and very little plastic in them. Collection and transportation of empty bottles is very costly, and there’s a huge opportunity there to reduce volume onsite where the bottles are generated, prior to collection. We have developed technology to assist people who are doing that, and it’s a growing business.” Most waste management companies base their business model on the quantity of bins emptied, charging customers on a per-bin basis. Harrie points out that a group operating under this system would require a constant increase in bins in order to raise the revenue required for growth. “There’s a huge inefficiency in that model in terms of transporting very high volume materials like plastic bottles,” he continues, noting that while the plastic is valuable, very little of it can be transported in each truck, despite the truck being full. “They’re basically plastic coated air bubbles.” In order to reduce volume and create value, the bottles must be shredded in the case of plastic, or crushed in the case of glass. “Instead of collecting 20 bins of bottles a week from a pub, they’d be collecting 4 bins of crushed glass,” Harrie says. “The business model would have to change from increasing the number of bins with low volume material in it to lesser bins, but collecting a higher value material.”
Harrie Hofstede views Spartel as an expression of his own entrepreneurial mind. He revels in every stage of a project, from the development of ideas and proving them up to bringing a project to a commercial stage and putting it into a dedicated company, where other people’s interests are focused on taking it from that point to create a solid business. “To some extent, I feel that my work is done once the product is proven to work,” he says. “It’s the only way that commercialisation can work; you create a technology, idea, solution, or piece of equipment that allows the next stage of the market to generate efficiencies and value in their workplace, and then you have a demand. If you have a demand, then you have a business.” Looking to the future, Harrie intends to begin accelerating the commercialisation of some of Spartel’s businesses, offering opportunities to investors to participate in the journey, with the intention of filling in emerging gaps in the market. “These gaps are emerging due to the maturing of society’s attitude towards waste management, and the maturing of government policies in waste management and pollution control,” Dr Hofstede explains. “This provides companies with the certainty that, if they make an investment in certain areas, the policies will not change and put them out of business.” One of the reasons for Harrie’s drive to accelerate the attraction of investment and expertise to his technologies is his desire to focus on new developments. “That’s where my strength is,” he says, “I’m good at taking it to an advanced point commercially, but at that point I’ll either have to choose to go back and develop some new ideas and technologies, or let it all go and leave it in the hands of dedicated commercialisation people. You need dedicated people to focus on commercialisation of a technology. It needs a single-minded focus, and there’s only so much I can do.”