Swedish Nexam Chemical published its Q1 2016 report today, which did not pose any major surprises but rather confirmed the path CEO Anders Spetz has outlined in the past. Importantly, the company has now taken the first commercial steps in all three strategic product areas. Q1 sales were sequentially lower and variations can be expected between coming quarters during the expansion phase. Several major deliveries were made during the fourth quarter 2015 and the company expects that this will be the case also for the second quarter in 2016.
Says CEO Spetz: “We have continued to actively pursue existing and new customers in the selected application segments with good results. The knowledge that we have gradually built up, improves our ability when it comes to presenting the right formulations to our clients. It is becoming increasingly clear that the best results are obtained when we deliver our products in the form of masterbatch to the customers. Masterbatch is, simply put, a pre-mix of Nexam Chemicals products in a plastic to simplify the production process for the customer. This ensures that the correct dose of our product is added.
In addition to active customer collaborations, we have also completed a share issue that raised SEK 129 million. This capital is a prerequisite for the expansion of the business we see in front of us. We now have the financial strength necessary to execute our strategic plan, not at least how we deliver masterbatch in the future. Together with external experts, we are now evaluating companies with adequate capacity, expertise and resources to complement our current activities, with the goal to deliver the increasing volumes of masterbatch in the future.
It is still too early to draw any conclusions, but the process may result in strategic partnerships as well as acquisitions of manufacturing businesses. All with the objective to be prepared for future volume growth.
Our focus areas:
- Polyethylene pipes
During the first quarter, the customer who has made most progress in introducing NEXAMITE® in its manufacturing process, produced pipe with the products we delivered at the end of last year. The production yielded good results and showed the expected productivity and performance improvements. As a consequence, yet another order of a polyethylene mixture containing a low dose of NEXAMITE® was placed in April. The order is twice as big as the last one, amounting to SEK three million. We are hopeful that this delivery will be followed by more.
- Polyester foam, including PET
At the end of the quarter, we received our first order on NEXAMITE® for industrial production of PET-foam. This came from our partner DIAB and means that we now have received commercial orders in all of our three focus areas. Even if the order value from a financial perspective is small, it is a big step forward in our joint development work with DIAB.
We have now showed that our NEXAMITE®-technology provides major property improvements in PET-foam. The market for PET-foams is in strong growth and more products in new application areas are now manufactured in plastic composites instead of metal.
Our current focus within PET-foam is to develop and ensure the capacity to deliver masterbatch to our customers, which is desired by all customers in the highly concentrated market for PET foams.
- High-performance plastics
Sales of NEXIMID® to high-performance plastics continues at the same pace as the end of last year. So far, sales have largely gone to applications in the aerospace and electronics industries. However, high-performance plastics are not limited to these two areas of application, but can be used in a variety of other segments. During the quarter a number of new customers ordered the product for development projects in various application segments. The initial feedback we have received indicate good results. So also in our, co-financed by EUROSTAR, MATPAX-project that aims to develop polymer materials and manufacturing processes for the production of, for example, thin goods details or metal replacement. A common feature of high-performance plastics is that volumes for each application is relatively small, and development cycles longer and more costly.
to move forward and accelerate the company’s development.“Nordic Investor