Can Papyrus turn bananas into eco-friendly paper and furniture?
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Can banana palms replace timber in the construction of paper, packaging, furniture and even building materials?
ASX-listed Papyrus Australia (ASX:PPY) thinks so — and has been working on that challenge since 1995 when founder Ramy Azer came up with an idea to use banana tree fibre as an environmentally friendly alternative to wood-based paper products.
It looked like a good plan when Papyrus listed on the ASX back in 2005.
Papyrus’s shares traded as high as 91c in 2007 after it won a patent for technology that converted banana trunk fibre into banana ply and built manufacturing facilities in Adelaide.
In the intervening years Papyrus has established a manufacturing joint venture in Egypt to produce banana-based veneer and fibre as an alternative to timber-based products.
Egypt was chosen because it is the closest banana-producing country to Europe, with about 50,000 acres of plantations. Papyrus uses banana waste material in its production.
Papyrus plans to perfect production in Egypt before duplicating the process “wherever bananas are grown” once it raises enough money.
But success so far has been elusive.
Papyrus shares lost 92 per cent of their value between 2007 and 2011. Since then they have dwindled to half a cent.
On Tuesday Papyrus released another disappointing full-year report.
Papyrus’s activities last year “were primarily focused on the managing its scarce working capital”, developing on a moulded banana fibre tray project in Australia, and progressing opportunities in Egypt, the company said in its annual report.
The past year “has been challenging, frustrating and eventually rewarding in progress made in Egypt”.
In June, Papyrus opened a factory in the central Egyptian city of Sohag “at a limited daily rate of output which will be increased to full commissioning during the next quarter”.
Papyrus made that achievement on a very slim budget.
The company spent only $119,000 last year. It raised $106,000 but reported no revenue and had only $17,619 in the bank at the end of June.
“The challenge was to maintain all requisite activities on a very limited budget.”
Papyrus aims to “partner with others to demonstrate the technology and its applications” and would continue to reduce costs.
The company has been contacted for comment.