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Expert case by Dennis

Opportunity Assessment: Alternative Revenue Streams for a Salt Mine

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Case Prompt

Salty Boy Inc. is an underground salt mine in Texas whose new leadership are supporters of the circular economy. Circular economy provides a pathway towards more sustainable production and consumption patterns – CE introduces circularity to many areas of production cycles and encourages using renewable, regenerative inputs (e.g., energy) and minimizing systematic leakage (e.g., waste).

After decades of extracting salt form the earth, Salty Boy’s new leadership find themselves in possession of a network of empty, temperature and moisture stable tunnels located conveniently near major fiberglass waste sources and logistics networks. As a result, Salty Boy sees the potential for an alternative revenue stream. Their rationale is that they have ample and well-located storage capacities in their tunnels that they could use to position themselves well for an emerging recycling trend that could turn fiberglass waste into an eco-friendly and valuable raw material. Salty Boy is looking for your help to assess this potential opportunity. 

Selection of Focus Industries

Your initial research shows that fiberglass is used in several industries with different supply profiles (see Exhibit 1). The projected residual value of the respective fiberglass varies based on factors such as cost of transportation, ease of collection and packaging.

Which of the industries should Salty Boy focus on? Why?

Addressable Market

How big is the addressable market for the Wind Energy industry in the US? What would you recommend Salty Boy?

Alternative Revenue Streams

There are multiple other options the salt caverns could be used (Exhibit 3). How would you segment the different options? Based on which criteria would you evaluate the different options?

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