The company will initially commit to delivering $20m worth of the total pellet order that is 10,000 metric tons per month or 120,000 metric tons over the next 12 months.
Kleangas Energy will generate around $30m-$40m in total revenue over the next year from the first two orders with second one yielding relatively high profit margins than the first order as payment terms are FOB Los Angeles.
Kleangas Energy claims the customer of the second order sets up perfect for Green Day as once the logistics for delivery are set then the subsidiary can just expand without any addition shipment concerns.
In addition to this, all pricing and terms will be fixed in advance so as production increases Green Day simply increases quantity delivered.
Green Day is currently exploring ways to acquire and/or partner with others to build and expand its own facilities for pellet production.
Kleangas Energy CEO Bo Linton said the first order was just the tip of the iceberg, while the second one confirms the company’s ability to secure and expand on its supply of pellet inventory so that it may continue to accept several more orders moving forward.
"It truly is exciting to be a part of a company that is not only on an aggressive growth trajectory but one that is in such a dynamic industry improving our planet’s environment," added Linton.
