Hydrodec
Hydrodec provides advanced oil and chemical process technology, products and services. Evolved from extensive research and development, Hydrodec's advanced technology specialises in environmentally sustainable, small carbon footprint chemical processing and high performance oil refining, in a closed loop, de-minimus emission process.
HydroDec Group lifted by positive trading statement, expansion plans
Hydrodec Group PLC (AIM: HYD) shares got a lift in morning trade after the company announced it is pleased with progress made despite the current recessionary environment and remains confident of reporting a profit from its operations in the current financial year.
The company, which commercialises a patented technology for the re-refining of used transformer oils and creating new Superfine Oil, said forward sales of SUPERfine transformer oil are encouraging and the Canton plant is moving towards 100 percent near term operational capacity.
Investors liked the story, and shares were up more than 13 percent in early trades.
Market conditions are improving and the growing demand for SUPERfine transformer oil has led the board to consider plans for a second US plant or a potential expansion of the Canton plant. These plans are expected to firm up in the second half of 2009 following an evaluation of potential logistical and financing arrangements.
Demonstration trials for the Japanese Environment Ministry will be completed over the coming two weeks in the Young, New South Wales plant. Subject to the performance of the trial, government approval of Hydrodec's technology for commercial application in Japan is on track for the fourth quarter 2009. Negotiations with the Japanese partner are also progressing positively and at a rapid pace.
The global price of crude oil and the transformer oil market both appear to have stabilised and started to recover after the lows of January and February this year.
Committed US Feedstock feedstock supply now exceeds 90 percent of current available plant capacity. HydroDec has identified additional probable feedstock sources that when combined with our committed supply will bring it in excess of 120 percent of the current Canton plant capacity. Feedstock prices have also stabilised and average feedstock cost to Hydrodec has reduced by approximately 40 percent since February.
In line with the company's expectations, production capacity at its US plant is currently running at around 50 percent and the plant is expected to be operating at greater than 80 percent capacity by the end of June.
The board is actively pursuing various financing options with commercial banks & other institutions to secure additional working capital, it added.
Register here to be notified of future Hydrodec articles.