Iofina PLC (AIM:IOF, OTC:IOFNF) this week provided an update on its performance and future projects, with CEO Dr. Tom Becker outlining the company’s achievements and plans.
The company reported producing 276 metric tons of crystalline iodine in the first half of the year from its six plants in Oklahoma, meeting expectations.
Dr. Becker, in an interview with Proactive, highlighted the anticipated impact of the new IO#10 plant, set to become operational by the end of the third quarter. This plant is expected to add 100-150 metric tons of iodine annually, significantly boosting second-half production.
The company has also secured multi-year supply agreements for iodine-rich water for two of its current plants, ensuring long-term production stability. Progress on the IO#11 plant is advancing, with plans to begin construction this year, further supporting Iofina's growth targets.
Looking ahead, Iofina aims to increase its production to over 1000 metric tons in the next few years.
Here’s what Becker told us.
Proactive: Hello, you're watching Proactive. I'm joined by Iofina’s CEO Dr. Tom Becker. Tom, good to speak with you today. You're out with the first half corporate updates, and it looks like it's been a good period for the company with increased production, strong demand, and strong prices too.
Becker: Yeah, thanks, Stephen. Always great to be on Proactive. We had a good first half of the year pretty much within our expectations. Our production was 276 metric tons of crystalline iodine in the half, and that's within our expected range. Really looking forward to executing our growth plans here moving forward. I think our team did a nice job executing what we expected in the first half of the year while continuing to build our new iodine plant IO#10, which we expect to have online here soon.
Proactive: Of course, because that crystalline iodine was produced from your six plants in Oklahoma. So with the current plants, how will that new plant impact second-half production, Tom?
Becker: We expect second-half production to be significantly higher than the first half of the year due to a number of factors. We always have a little bit of lower production in the first half of the year compared to the second half of the year. The brines that we utilize are at a lower temperature, and it affects our ability to get iodine out of the brines. Efficiencies are a little bit down in the first half, and usually there's a bit less oil and gas produced due to weather conditions, which affects us too. But in the second half of the year, the run rate at our existing plants has been very strong. As I mentioned, we're building a new plant, IO#10, which is expected to add significant production in the second half of the year once it becomes operational. We expect on an annualized basis for this plant to produce another 100-150 metric tons for us each year. Extremely excited about this development and the continued growth of our business.
Proactive: In the meantime, Tom, you've also signed multi-year supply agreements for iodine-rich water, and that's to two of your current plants. Does this enable consistent production? Are you looking at extending this to your other plants?
Becker: We have several partners that provide us with the brine water, which is a byproduct of their oil and gas production. We renegotiated a couple of contracts, which we announced to the market a few months ago. This gives us long-term stability at those particular plants. We're also working with those partners and another brine supply partner on projects that will hopefully add more water to our existing plants. By redoing these contracts, our partners are even more incentivized to bring us more brine water. The better we do at producing iodine, the better off our partners are. It's a good long-term strategy for our business. We'll continue to work with our multiple partners to maximize the amount of brine available and build new plants to increase our production further.
Proactive: With good progress for IO#10 set to open in the third quarter, how about your next plant, IO#11? How's that progressing?
Becker: We've been discussing IO#11 for some time. Recently, we've made even more progress in negotiations for IO#11. We have multiple sites we're considering for future IOsorb plants. We have a preferred site for IO#11 in the core area near IO#9 and IO#10. We've made significant progress and are confident we'll get the deal done with our brine supply partner and start construction this year. We're optimistic about the company's growth, aiming to get our production levels up to over 1000 metric tons in the next few years, and we'll continue to reinvest in our iodine production to meet those goals.
Proactive: As you go into the second half of the year, do you see demand remaining strong and iodine prices as well?
Becker: The first half of the year was as expected from a sales standpoint. When we do our budgets, we consider individual products like crystalline iodine, the derivatives we make at Iofina Chemicals, such as hydrochloric acid and methyl iodide, and other iodine-containing products. We also look at our non-iodine-based compounds that we produce for industries like biocides and semiconductors. The sales mix and expectations for these categories are aligning with our forecasts. In 2023, the iodine market was strong, especially for x-ray contrast media, the largest single use of iodine. Other applications waned a bit, but in 2024 we've seen a rebound in areas like LCD screens and automotive applications. Demand for iodine is stronger now than it has been, and we've seen some slight increases in pricing in the third quarter, which we expect to continue in the second half of the year.