Deal Menu | Joint Venture | Asset-Backed | Off-take Linked | Minority Growth | Pilot Facility
Below is a R&D / Pilot Facilities Investment Structure tailored for Saudi strategic investors (commodity trading arms, family offices, or Vision 2030–aligned entities) who want technical validation, supply assurance, and option value before full-scale deployment.
This is written as a board-level decision memo, not a lab proposal.
R&D / PILOT FACILITIES STRUCTURE
Agarwood & Supercritical CO₂ Extraction (SFE)
(Saudi Strategic Partner × CESI)
1. Strategic Purpose
The R&D / Pilot Facility is designed to:
- De-risk commercial scale-up
- Validate yield, grade consistency, and cost curves
- Customize Saudi-specific oud profiles
- Establish technical and Shariah confidence
- Create a call option on future full-scale capex
This is proof before scale, not academic research.
2. Facility Scope (Pilot-Grade, Commercial-Relevant)
Core Components
- Small-to-mid scale SFE unit (pilot-commercial hybrid)
- Pre-processing and post-extraction systems
- QA/QC lab (GC-MS, density, profile analysis)
- Small-batch blending and profiling capability
Output:
Commercially usable extracts—not lab waste.
3. Capital Profile
| Item | Description |
|---|---|
| Capex Size | Low-to-mid single-digit USD millions |
| Ownership | Asset SPV or JV |
| Duration | 12–24 months |
| Scale | Modular / expandable |
Capital is fully asset-backed, even at pilot stage.
4. Commercial Linkage (Critical Feature)
The pilot is offtake-connected, not isolated.
- Pilot output sold under:
- Test offtake agreements
- Sampling contracts with Saudi buyers
- Pricing aligned with future formula (discounted)
- Data feeds directly into full-scale JV economics
➡ Pilot cash flows partially offset costs.
5. Strategic Rights for Saudi Partner
- First access to all pilot data
- Right to define Saudi-grade specifications
- Priority option to fund scale-up
- IP access to extraction parameters
- Exclusivity on pilot-derived profiles (optional)
This converts R&D spend into strategic leverage.
6. Risk Management
- Limited capital exposure
- Short decision cycle
- Equipment redeployable
- Clear go / no-go milestones
| Risk | Mitigation |
|---|---|
| Yield uncertainty | Pilot validation |
| Grade acceptance | Saudi testing |
| Cost overruns | Fixed-scope pilot |
| Tech risk | Proven SFE platforms |
7. Shariah & Vision 2030 Alignment
- Asset-based experimentation
- No speculative instruments
- Focus on sustainable, halal production
- Knowledge transfer aligned with long-term stewardship
8. Scale-Up Path (Embedded Option)
Upon successful pilot:
- Convert pilot unit into production
- Expand into multi-unit SFE facility
- Roll into full JV or asset-backed SPV
- Apply pilot data to bankable financing
Pilot → Production → Platform
9. Return Logic (Not Pure ROI)
Returns are measured in:
- Risk reduction
- Secured supply confidence
- Preferred economics in scale-up
- Strategic IP and profile ownership
However, target IRR at pilot level (if monetized): 10–14%, with significant upside upon expansion.
10. One-Line Strategic Thesis
A small, asset-backed pilot converts uncertainty into data, data into leverage, and leverage into disciplined scale.