Special report: Cleantech play Carbonxt — which helps eliminate mercury and other toxic pollution — has commissioned a new manufacturing plant in the US State of Georgia.

The facility, named Black Birch, is now making powdered activated carbon that sells mainly to coal-fired power stations in the US for the removal of mercury and other toxins that are emitted during production.

The plant is expected to increase gross margins across the existing business to 40-45 per cent in the second half of financial year 2019 due to a new source of raw material that has significantly reduced production  costs.

The plant can produce up to 10,000 tons of powdered activated carbon a year. In the short-term it’s only using up to 3000.

Since listing on the ASX in January, Carbonxt (ASX:CG1) has added another product to its stable in the form of activated carbon pellets.

The pellets have opened up further opportunities for the business that include newer more modern power stations using new regenerative activated coke technology (ReACT) technology.

The business has secured a long-term contract to supply its patented pellet product to a power plant using the ReACT technology, and is now producing that product in its facility in the US state of Minnesota.

The business also made the first sale of its pellet product into the industrial sector, marking the business’s first foray into a new market.

The contract is estimated to bring in $400,000 of revenue over 12 months.

The pellet product will also allow the business to target new markets outside the US, including Japan which is building a large number of new power stations that would use the ReACT technology.

One of the primary drivers of coal-fired power stations using the product is the Mercury and Air Toxic Standards issued by the Environmental Protection Agency which mandates power stations must reduce mercury emissions.

Outside the US, the Minamata United Nations convention is imposing more stringent measures on reducing mercury emissions and waste, which will reach countries including Australia.

Carbonxt’s 2018 half-year financial results reported revenue of $3.03 million — a 126 per cent increase on the prior half-year period and gross margins of 28 per cent — up from 4 per cent.

With the further uplift in gross margins anticipated, the company is targeting profitability by the end of this calendar year.

Carbonxt also boasts some high-profile investors on its register including rich lister Laing Walker, who owns about 18 per cent of the company, and property mogul John Beville, who last week increased his holding with some on market buying via his Beville Investments vehicle taking his stake to 6.4 per cent.

 

This special report is brought to you by Carbonxt.

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