Accsys Technologies' subsidiary, Titan Wood Ltd, has won the Dutch National Award for Innovation, and two "Columbus Egg" awards for its pioneering Accoya wood product, and its sustainable production technology. The Dutch Government awards Columbus Eggs for sustainable innovation in the Netherlands, where Titan has a commercial scale plant that produces Accoya.
One of the judges, Dr Wim Quik, said, "Titan Wood's Accoya wood modification process is truly innovative. Thanks to this production technology, Accoya wood has become a real alternative to increasingly scarce tropical timber. The ability to make high performance timber from fast?growing, sustainable wood species will help to protect threatened species and rainforests. Further advantages are that Accoya wood can replace less environmentally friendly materials in demanding exterior applications, and that it requires less frequent maintenance due to its improved durability and dimensional stability." Dr Quik forgot to mention that Accoya is also non-toxic, recyclable and acts as a carbon sink ?oh well, you can't have everything! While we are on the subject of "not having everything", if you thought Accsys Technologies' shares had got away from you as they rose and rose in 2007 ? well, they did eventually succumb to the force of gravity, after the financial sector spooked the general stock market into laying eggs, but they appear to have found support at ?2.40 during the last couple of months.
Just in case Accsys Technologies and its business is still a bit opaque to you, Accsys has developed a way of acetylating, or pickling, softwood on a commercial scale. This means that relatively cheap, quick to grow (sustainable) softwood can be processed to acquire the durability and stability of expensive hardwoods. For all practical purposes, this amounts to a new species of wood, and Accsys Technologies calls their acetylated softwood "Accoya". Accsys operates a demonstration production facility in Holland, and licences other companies to produce and distribute Accoya in other territories.
Europe
In the UK and Ireland, following two years of joint research and development, plus customer trials, Accsys is exclusively represented by BSW Timber (www.bsw.co.uk) the UK's biggest sawmilling business. In Germany and Poland, Accsys is represented by the Roggemann Group (https://www.roggermann.de). Following customer trials using Accoya, Roggemann believes this product could encourage manufacturers of external joinery (windows, doors etc) to switch back to wood after years of drifting into using less environmentally friendly alternatives, such as plastic. In Norway, Accsys is solely represented by OggeTre who are convinced that doors manufactured from Accoya would be less likely to swell during the winter in humid coastal areas. In the Netherlands, Titan Wood (owned outright by Accsys) has a plant with the capacity to produce 30,000 cubic metres of Accoya a year for demonstration purposes, to supply licensees during their start up period, and to make Accoya for European markets. In order to meet demand, Titan is planning to double the capacity of its production facility. All Accoya produced by Titan Wood is manufactured from wood certified by the Forest Stewardship Council and other certified, sustainably-managed sources.
The Middle East
Al Rajhi Holdings, who hold about 6.5% of Accsys's equity, is licensed to produce and distribute Accoya in Kuwait, Bahrain, Qatar, Oman, Saudi Arabia, and the Arab Emirates. Al Rajhi made an initial ?3,000,000 payment towards a ?20,000,000 fee for the rights to operate a production facility with the capacity to produce 150,000 cubic metres of Accoya a year ? and, starting in 2010, the company will also pay ?22 for each cubic metre of Accoya they produce over the next twenty years. Accsys and Al Rajhi Holdings are now focusing on developing the market for Accoya, both within the Middle East and beyond.
China
Diamond Wood China Ltd acquired the rights to manufacture and distribute up to 500,000 cubic metres of Accoya annually in the People's Republic of China; for this they made an initial payment of ?9.5 million, with additional fees totalling ?90 million to be paid over four years - plus ?22 for each cubic metre of Accoya they produce over the next twenty years. Diamond Wood anticipates that it will run out of licensed capacity and will need to increase its production capacity within five years.
The Americas
As Titan Wood only opened an office in Dallas in February this year, the company has nothing to report from the USA as yet. However, Accsys is in discussion with the government of Chile about the possibility of building fifty Accoya bridges; this follows an order for 1,200 cubic metres of Accoya to be used for the structure of two heavy-traffic carrying road bridges for the municipality of Sneek in the northern Netherlands.
The Accoya bridges in Sneek are due for completion in 2009, and each will be forty metres long by twenty metres high, and made out of laminated sections measuring 1.08 by 1.4 metres.
Accoya is made using Titan Wood's proprietary process for wood acetylation which increases the level of acetyl molecules already present throughout the wood. Acetyl is naturally present in wood ? in higher quantities in hard wood than in softwood - and increasing the levels of acetyl throughout a piece of softwood gives it the performance characteristics, including strength, of hard wood. Untreated pine has an acetyl content of 2%, with oak doubling that at 4%. However, the acetyl content of Accoya is higher than oak, which means it achieves the highest rating for durability ? class one. In outdoor use, Accoya can be expected to last at least fifty years above ground level and at least twenty-five years below.
Acetylated wood is protected from rot and has become inedible to most micro--organisms, without having become toxic. Acetylated wood is almost dimensionally stable - swelling and shrinkage are reduced by 75% compared to hardwoods? thus it is far less prone to cracking or warping, so varnishes and paints lest three or four times longer. It is also more resistant to degradation by ultra violet light, which means it keeps its natural appearance for longer.
So where is Accsys Technologies headed? The company has made rapid progress in signing up credible business partners who will produce and market Accoya in Europe, the Middle East and China, so developing a global distribution network looks distinctly do-able. Accsys has ideas for extending its licensable product range, and is already working on acetylated fibre boarding ? this will be a sheet material like chipboard or plywood, and there are rumours of coloured wood ? that is wood that is coloured all the way through. The development of the Brazilian, Russian, Indian and Chinese economies puts long term pressure on the supply and price of durable tropical hardwoods, and the forests they are harvested from. However, in terms of durability, performance price and sustainability, Accoya can match or beat these hardwoods.
If we look at Accsys Technologies' shareholders register we see some heavyweight outfits such as UBS Wealth Management, Al Rajhi Holdings, Saad Investments, and Rathbone Investment Management, so Accsys is already mixing with the grown ups. It seems plausible that one day, a big grown up company may be tempted to make a bid for a company with a licence-able product that offers distinct advantages to a wide range of customers worldwide, at competitive prices, with a pipeline of comparable new products following on behind.
PS In Hispanic cultures the expression "a Columbus egg" is used to describe something that is obvious, or simple, only after it has been explained - for a fuller explanation consult your favourite search engine or free online encyclopaedia.