Pollution control company Carbonxt has commenced trading on the Australian Stock Exchange with the completion of its Initial Public Offering.
Carbonxt, saw the issue of 14.3 million shares at 70c to raise $10m in an offer led by Shaw & Partners.
The company’s core business is the production and sale of proprietary, powdered Activated Carbon (AC) produced for the removal of pollutants and toxins such as mercury from industrial flue gas and waste water emissions. The primary focus being the sale of AC to remove mercury from US coal fired power stations, which is a legal requirement under US regulations.
Carbonxt currently supplies multiple power stations with AC, particularly in the US Midwest and is in commercial trials with another five potential customers. Carbonxt’s product is superior to its competitors in that it does not contain bromine. Bromine acts in a similar way to chlorine and it is the Company’s contention that this may cause serious and costly corrosion issues inside power stations.
Carbonxt’s solution is proven in the market place with FY18 Revenue from US power station customers forecast at A$8.9m, 134% growth over FY17.
With over 400 coal fired power stations in the US, and government mandated mercury emission reduction regulations, the demand for AC in the US is growing at about 9% pa and expected to be in excess of 500,000 tons per annum in 2020.
As such, Carbonxt plants to carve out a bigger share of a market which is approaching $1bn per annum. It will do so by onboarding more utility clients and expanding into other US emission control markets, which are not governed by Mercury and Air Toxic Standards.
The company will use the IPO proceeds to move much of its AC production requirements ‘in-house’ using inexpensive feedstock, giving the company a very significant cost advantage.
The Minamata United Nations convention, which came into force August of last year, is expected to increase demand for Carbonxt’s mercury-stripping technology as more stringent anti-pollution measures are adopted by countries worldwide, including Australia. This means that Carbonxt will have utility in any country with coal fired power stations.
Carbonxt is also developing additional pollution reduction solutions, including a process to manufacture activated carbon from a biomass waste product.