23 July 2014

Hydrodec targets USA

20/04/2007 Robert Tyerman

Recycled transformer oil pioneer Hydrodec plans a £15 million push into the USA, after winning approvals and orders in Australia.

Mark McNamara, chief executive officer of AIM-quoted Hydrodec, described approvals won from the State of Victoria’s two largest electricity distributors for the company’s “Superfine” transformer oil – made from “degraded” waste oil – as a ‘watershed’. A large South Australian utility has also approved Superfine, which recently won a 22p-a-litre federal subsidy under the Australian Oil Product Stewardship programme.

Chaired by long-term backer John Gunn, the former City tycoon who now supports early-stage and often green-tinged ventures, Hydrodec is in line for ‘three big contracts’ that will take half the capacity of its one operating plant in Young, New South Wales, according to McNamara.

He claimed the company should now be able to grab 30 per cent of Australia’s transformer oil market, where transformer maker Schneider Electric has already agreed to use Superfine.

McNamara said all this could take Hydrodec into profitability in the second half of this year, after cutting its losses in 2006 from nearly £6 million to £2.8 million. But the big prize is the US market, where Hydrodec can present Superfine as green – in that it uses up waste oil – as well as being cheap and reducing American dependence on imported oil.

The company has received planning permission for a plant in Ohio and plans a second facility in Mississippi. McNamara said Ohio should start producing in late 2008, with Mississippi on stream early the following year.

The cost would be around £15 million and McNamara suggested there is an offer of a debt and convertible finance package on the table from a major US corporation. A third facility on the West coast of the USA might be considered later on.

‘Hydrodec will grow tenfold in 24 months,’ boasted McNamara. The company, which eschews joint ventures in a bid to guard its patented intellectual property, reckons it has many other uses besides transformer oil.

Floated at 5p in 2004, Hydrodec shares reached 37.5p in March last year, but now trade at 26p, down 0.5p this morning and valuing the company at £48 million. If the orders do come and the financing offers come through, they could find new favour.

Growth Company Investor: free trial

Since 2008, our share tips outperformed the benchmark by 281%. Take a free trial and get access to our recommendations today. Start free trial now.

Directors' Pay on AIM 2014

The most comprehensive review of AIM directors' pay available, and this year includes a record sample of 1,044 AIM-quoted companies. The full report is available to order for £365 + VAT. Click here for more info

Latest small-cap and growth company news

Daily coverage of small-cap company stocks on London's junior markets AIM and PLUS, breaking news, stock research and latest share price information for investors. Full sector coverage with all the latest news on smaller listed companies, updated several times a day with financial reports, trading statements and links to further web resources.

Popular News

Latest News

The company is raising the money to develop its LED range (sample image)

PhotonStar raises £2.2m 18/07/2014

British LED lighting manufacturer PhotonStar LED Group (AIM:PSL) raised £2.2m by way of a placing.

Begbies issues red flag 18/07/2014

Insolvency specialist Begbies Traynor (AIM:BEG) has issued its latest 'red flag' report on the financial health of British businesses.

Check your credit rating - interest rates may soon be rising 18/07/2014

Advertisement

ABF sees Primark boost 10/07/2014

Food and retail giant Associated British Foods (LON:ABF) has issued a trading update in which it notes a surge of sales from budget supremo Primark.

Tags: Food

Swallowfield keeps moving 10/07/2014

Beauty care specialist Swallowfield (AIM:SWL) unveiled an encouraging trading update for the year to June.

Tags: Trading update

Good Energy grabs Wiltshire consent 04/07/2014

Renewable energy supplier Good Energy Group (AIM:GOOD) has obtained planning consent for a solar farm in north WIltshire. 

More News