Companies: AXS   

Owning the rights to a technique that hardens wood and protects it from rotting and cracking, Accsys offers an economically viable replacement for expensive hardwoods. The process, called acetylation, converts soft woods into a ‘new species’ of wood the company has christened Accoya.

Accsys receives revenues from licence fees it sells for each region and then ongoing royalty fees for the volume of wood produced. Scottish chairman Willy Patterson-Brown says operations are ahead of schedule and ’only a matter of months from revenue generation’. Some potential customers are waiting for Accsys to set up its factory in Holland, which should be profitable in its own right, but ‘a number of companies are looking to get a jump on the market and the big players in wood are talking to us,’ he informs. ‘We have a whole series of sampling programmes with half a dozen of the world’s largest wood companies.’

After two years of trials the UK’s largest sawmilling business, BSW, has signed up to become the exclusive supplier and producer of Accoya in the UK and Ireland. BSW is now promoting Accoya to UK manufacturers in the windows, doors and cladding markets and the partnership is likely to increase acceptance elsewhere. This comes just a few months after Abu Dhabi-based Skanfore signed an option agreement for the licence for the UAE.

The global market relevant to Accsys is estimated to be around 80m cubic metres, with an average selling price of £540 per cubic metre. ‘If we just pick up one or two per cent of the market that would still see our market cap move by a significant multiple.’ There is still around €30m cash to easily cover the factory completion and further R&D on other chemical developments including possible applications in plastics, explosives and pharmaceuticals. Michael O'Brien at Collins Stewart forecasts full year pre-tax profits of £10.5m, £35.6m and £72.3m for '07, '08 and '09. Potentially a very rewarding punt.

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