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PyroGenesis Canada: DEEP DIVE
OVERVIEW

PyroGenesis is harnessing the power of plasma for high-tech manufacturing

PyroGenesis harnesses the unique properties of thermal plasma to melt and transform metal, carry out high temperature chemical reactions and convert waste into energy
plasma torch
OVERVIEW: PYR The Big Picture
Plasma is highly electrically conductive, making it incredibly useful in high tech manufacturing industries
  • A high-tech company that designs, develops, manufactures and commercializes advanced plasma processes

  • Three commercial business lines positioned for rapid growth through strategic partnerships with multi-billion-dollar entities

  • Revenue growth through internal and external sources


What PyroGenesis does

PyroGenesis Canada Inc (CVE:PYR) (OTCMKTS:PYRNF) is a high-tech company that designs, develops, manufactures and commercializes advanced plasma processes.

Plasma, considered the fourth state of matter, comes from an ancient Greek word that means ‘moldable substance’ or ‘jelly.’ In the plasma state, the ionized gaseous substance is highly electrically conductive, making it incredibly useful in high tech manufacturing industries such as defense, metallurgical, mining, additive manufacturing (including 3D printing), oil & gas, and environmental industries.

The team is comprised of experienced engineers, scientists and technicians working out of its Montreal office and a 3,800-square-metre manufacturing facility.

The company develops and produces innovative plasma torches, plasma waste processes, high-temperature metallurgical processes, and engineering services to the global marketplace. Its three major business lines are military/environmental, toll manufacturing and additive manufacturing.

Essentially, PyroGenesis harnesses the unique properties of thermal plasma to melt and transform metal, carry out high temperature chemical reactions and convert waste into energy.

“We invented plasma atomization, so our ability to make it better comes from the fact that we have the largest concentration of plasma expertise under one roof,” said CEO Peter Pascali.

Outlook

In 2018, the company focused on securing strategic partnerships over revenue-generating opportunities, according to CEO Peter Pascali. It has now positioned each of its commercial business lines for rapid growth by strategically partnering with multi-billion-dollar entities.

These partnerships include the US Navy within the military line, a Japanese trading house as a toll manufacturing client and France’s Aubert & Duval within the additive manufacturing line of business.

With these blue-chip partnerships in hand, PyroGenesis is looking to 2019 as the year that bears the fruit of its commercialization strategy. The company is anticipating signing contracts valued at over $30 million in revenues over the next 18 months, nearly six times 2018 revenues.

Another recent announcement is the decision to spin out the company’s additive manufacturing capabilities. The decision to spin out the division was taken in order to attract an investor base best suited to the additive manufacturing (AM) value proposition, particular business operations, and financial characteristics.

As PyroGenesis noted in a recent statement, “there are large pools of money interested in investing in the AM space, but have no desire to have their funds comingled with unrelated business lines. A spin-off would assure them that such funds would be used for AM alone.”

The company is hoping that the spinout will maximize shareholder value by placing the new company in a better position to generate revenues and develop strategic relationships than if it had remained part of the PyroGenesis stable of technologies.

Another step geared towards unlocking shareholder value uplisting PyroGenesis’s shares to a more senior exchange.

What the CEO says

Revenue growth at PyroGenesis will come from both external and internal sources.

CEO Pascali is confident that investors will soon realize the value of the January 2019 deal with Aubert & Duval to supply the French conglomerate with atomized titanium powder. The deal is mutually exclusive, meaning that PyroGenesis will only sell its powers to the industry through A&D, and A&D will only purchase powder from PyroGenesis.

“When we announced the business partnership (in January), Aubert & Duval’s market capitalization increased by 75 million in one day and almost the same amount the next day,” Pascali said. “Investors clearly saw that they had filled a major hole in their supply chain and analysts attributed this huge growth in its market cap to the deal.”

Pascali said that PyroGenesis has been getting a lot of interest from Europe in terms of private placements, and the company is finding some trading volumes are attributable to European investment.

Internally, the high-tech manufacturer is finding methods to improve its processes and methods of production to drive revenue.

“We are constantly improving our system,” he said. “One way to do this is to increase the production rate so that for the same costs, you’re getting more per hour per employee.

“Increasing the production rate is great for titanium but it also opens up the marketplace.”

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

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