18 April 2015

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.

Superb investment toolkit for private investors

SharePad is the new web-based service from ShareScope. Easier to use and more powerful. Perfect for tablets, Macs and Windows PC. Covers ALL your investment requirements.

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 2015

The most comprehensive review of AIM directors' pay available, and this year includes a record sample of 1000+ AIM-quoted companies. The full report is available to order for £385 + 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 active in the Veneto region, whose capital is Venice

Sound getting nearer 17/04/2015

Mediterranean explorer Sound Oil (AIM:SOU) reported that it had won approval for the Environmental Impact Assessment of its proposed field. 

Tags: Mediterranean, Oil and gas

Plexus wins 800k deal 17/04/2015

Oil and gas technology outfit Plexus Holdings (AIM:POS) has won a contract worth $800,000 with the Venezuelan government.

Tags: Latin America, Oil and gas

Transense wins tyres deal 10/04/2015

Sensor specialist Transense Technologies has won a deal to supply tyre-monitoring technology for a fleet of trucks owned by BHP Billiton. 

Tags: Chile, Mining

Flowgroup gains approval 10/04/2015

Smart boiler-maker Flowgroup has won approval for the manufacture of its microCHP Flow boiler.

Tags: Contract wins

Falkland makes discovery 02/04/2015

Explorer Falkland Oil and Gas (AIM:FOGL) has made a discovery at the 14/15b 'Zebedee' well.

Tags: Falkland Islands, Oil and gas

Berkeley busy at plant 02/04/2015

Zambian lead and zinc miner Berkeley Mineral Resources (AIM:BMR) has selected a plant for leach processing. 

Tags: Africa, Mining

More News