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#Nexam: Confident #CEO comments

Nexam Chemical just released its Q4 2014 report. Given the early commercial state of the company, the focus was clearly on management’s comments rather than the actual figures.

Says Nexam’s chairman of the Board, Lennart Holm: “(In 2014) We did not succeed in delivering on the anticipated commercial volumes that were promised, which naturally,is a disappointment for us…We underestimated the inherent sluggishness caused by awareness of the potentially devastating consequences of an erroneous decision regarding materials. We will learn from this as we move forward.

With BASF, we agreed not to extend the exclusive agreement, which, on the positive side, enables us to initiate cooperation with other players that have shown interest in Nexam Chemical ‘s crosslinkers
in Nylon 66. Work on our crosslinkers in Nylon 66 will definitely not be suspended and we anticipate evaluating material in components for the automotive and electrical industries in 2015.
Regarding Armacell, the development project was delayed after Armacell made a strategic decision to change from “virgin PET”
to rPET (recycled green PET) for the manufacture of PET foam. Using rPET as the raw material, the dynamic of both the chemistry and the manufacturing process is changed, which means that
parts of the completed development work, which includes our crosslinking technology, must be redone, with delays as a result. Our cooperation with Armacell is continuing and being intensified, as we have extended our exclusive supply agreement and initiated a new development project for recycled PET that is part-financed by
EUROSTAR.
Although we did not succeed in living up to the expectations that we had for sales, there have been many positive developments in the past year.
Our cooperation with  a major pipe manufacturer has taken decisive steps forward and in 2015, full-scale tests will take place at the customer using products that include our crosslinking. Interest in and sales of our NEXIMID products for applications in polymides grew during the year. The polyimide segment is no huge market for the company in the near future, but provides a key indication that our chemistry works and creates value for the customer. We launched two new products, NEXAMITE PBO and NEXIMID MHT-R, and marketing and sales activities for these are now set to be intensified.”
For the first time we also get a detailed comment by recently appointed CEO Anders Spetz:Even before I started, I was convinced of the relevance of Nexam Chemical’s technology, but now I am even more convinced and astonished by its breadth and depth. Through the technology developed by our R&D team in

recent years, we have established a strong foundation for building a
sustainable business. Another of Nexam Chemical’s strengths that I have discovered during this initial period, is the deep competence and vast knowledge of chemistry and processes that my new coworkers command…. The company is now in its commercialization phase, which requires a comprehensive change in effort with the aim of becoming a fully business-driven operation.
 
The plastics additives market served by Nexam Chemical is constantly expanding and annual growth of 5 percent is anticipated
until 2020. This is driven by the general growth of plastic usage in society and the fact that environmental and sustainability issues are high on the agenda. Recycling represents an extremely important and positive component for Nexam Chemical.
The business model I envision for the further development of the company is based on customers intimacy. Cooperation with the customer to further develop applications in which Nexam Chemical’s technology offers concrete customer value, creating possibilities for growth and profitability for both parties.
By reallocating resources, I anticipate being able to increase the focus on marketing and sales with no material cost increases. We are in the final phase of recruiting a CMO who, together with me, will focus all attention on marketing and customers. We are also strengthening our organization by employing Christian Svensson as CFO.
Already yesterday evening, the company announced that it has postponed its plans to move its listing from First North to NASDAQ OMX Small-cap. This seems like a natural and wise decision given the restructuring in the management team. The new CEO and CFO will have to put their own mark on operations. Any major share price movement will depend on new contracts and orders, which we will hopefully see plenty off during 2015.
Nordic Investor

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