Periodic Reporting for period 1 - STURSKIN (Innovative products by using tanned sturgeon skin)
Periodo di rendicontazione: 2018-08-01 al 2019-01-31
The tannery sector has experienced a partial setback during the crisis of recent years, and a new belief has been affirmed: only those who are inclined to innovate are able to survive, creating value that is worth over time. The growing attention to environmental issues combined with the increasingly extreme search for the uniqueness of fashion items has led Newport to design and develop this new type of leather. In addition to the fascinating unique exotic appearance, this product benefits from an added value that today is a critical success factor in the market: a processing waste from the caviar industry (otherwise destined for incineration) is used and valorised as raw material for a high added value production, in a logic of circular economy that does not stop only to the environmental benefit (which is not sufficient – in fact - for industrial replication) but also points to economic sustainability. In addition, chromium - normally used in the tanning phase and with notoriously negative effects on the environment and human health - has been replaced with natural tanning agents.
In conclusion, the benefit is therefore twofold: for companies the costs of disposal are reduced, turning them into revenues for all the actors of the value chain; for the society, a new product suited to market tastes is offered by reducing the environmental impacts associated with the current disposal of waste and the use of traditional tanning techniques.
From a technical point of view, a series of internal pre-industrial tests were carried out to study and verify the best processing parameters to be subsequently applied on the real production scale. Numerous drum tests have been carried out to refine the usable tanning recipes, trying to identify all the possible critical aspects and sensitivity to the specific tanning process. Processing times were also investigated (especially the critical ones related to the pickling and vegetable tanning phases), allowing a preventive calibration of the production capacity of the new lines, potentially to be activated with the start of the new business. Astandard protocol for the conservation and the transport of skins from the supplier to the tannery was validated. Finally, some sample objects have been designed and realized, in order to test and demonstrate to potential customers the usability of Sturskin leather for certain manufacturing productions, also identifying new outlets of use (thus reducing the problems related to the need to join the leather).
From a financial point of view, a business plan that analyzes the potential of the business has been drawn up. Several topics have been investigated:
• a market analysis has been carried out in order to define the characteristics (in terms of value, volumes and competitiveness on the basis of some benchmark products) of the leather and derivative products markets;
• analyses on the acceptability of the new product by intermediate and final customers have been carried out, hypothesising a marketing strategy able to overcome this potential barrier;
• the value chain has been analysed (Canvas model), focusing on potential problems;
• a risk analysis has been carried out (for example, risk of slowing market uptake) and the related impact and probability mitigation actions;
• an assessment of the management of the IPR has been conducted, outlining some possible strategies in light of the reserved characteristics of the process;
• using the Discounted Cash Flow method, the profitability of the investment in the Sturskin business has been estimated;
• various hypotheses of externalization/internalization of some production phases have been evaluated, analysing the cost-effectiveness of each in relation to its criticality;
• analysis of the sensitivity of the profitability has been carried out basing on the different hypothesis of composition of the capital necessary to start up the business and of changing in the sales price.
The expected results are exciting: the analyses carried out have shown that, dealing with a niche market, it is possible to obtain very high margins. The Sturskin business appears extremely promising, and the economic and financial projections are positive. In the best scenario, the NPV (basing on CF as proposed) expected to be two years after the launch of the product on the market is € 1,148,768, with a PBP of 12 months; in the worst case scenario, the NPV expected at two years is € 217,727, with a PBP of 22 months. Sturskin represents an investment with very high added value, thanks also to the low incidence of initial start up costs and the possibility of implement a lean pull productive model.
In addition to the economic sphere, the project touches the environment field. The choice to produce using a vegetable tanning process is in itself an excellent added value, given the known collateral effects that the metallic tanning have on the environment and on human health. But moreover, the proposed model aims to give new life and value to a material that would otherwise be just a waste of the caviar industry. This waste, usually disposed of through incineration or only partially used in isinglass production, is taken and valorised in a circular economy that reinserts the by-products in the production chain. The by-product from a high added value sector is thus ""saved"", and transformed into a product also with high added value, both from an aesthetic, economic and environmental point of view.