Alexium International Group Limited (ASX:AJX) Executive Chairman Gavin Rezos discusses the company’s unique and environmentally - friendly technologies across the textiles, electronics and building sectors.Alexium was founded six years ago as a speciality chemicals company, with unique technology in applying new functions to services such as water repellency, anti-microbrial and non-stick. We're an ASX 300 company. Our main markets now are in fire retardants and phase-change cooling materials. And we're based in Greenville, South Carolina, with a brand-new 25,000 square foot facility.
So, [our] fire retardant is an environmentally-friendly, performance-enhancing fire retardant. It's replacing toxic chemicals that have been in use for the last 40 years in the industry. They are used in apparel, in beddings, in soft furnishings, uniforms, and now latterly into electronics sector, the epoxies, resins. And phase-changing is a material which if it heats up, the material is cool to touch. And that's been used in bedding and now performance apparel.
It's unique in that we can combine a number of different technologies in the one formulation. So we can combine fire-retardant and phase-change cooling. It's also unique in that we can make petrochemicals like polyester and nylon fire-retardant, and that's pretty much a breakthrough which sustains our 20+ patents.
We have 48 sales agents around the world, with about eight different distributors. In the order book in the US and including some European sales currently, and including potential licensing transactions, it would be about $18 million dollars this year we're targeting.
The global bedding company, the latest contract is with two of their commercial finishers to supply a combination of fire-retardant and phase-changing Alexicool material formulations. The contracts are over three years, with about US$3 million per annum revenue. And on the apparel one, this is with a major global brand. It's for five different brands of theirs. And that's for phase-change cooling material for performance apparel.
The defence sector, it takes a long time to break into that sector, but we are now designated as an environmentally-friendly flame retardant, and it's being trialled by the US Army, and we're also now in discussions with the US Marines.
Recent news about lithium batteries causing fires in electronics has certainly increased demand for information about our products. But we have contracts with companies where we're making circuit boards fire-retardant, and we expect to grow that into epoxies and resins, to include more products in the electronics sector.
Regulatory bans of chemicals, particularly in the US now and branching out into Europe and elsewhere, certainly impacted our growth/demand profile. We expected these bans to occur, and just recently the US EPA has listed brominated products and triss products in the fire-retardant sector, which had been the mainstay of the fire-retardant world for the last 40 years, as toxic chemicals for expedited action.
FY16 was really the first breakout year for commercialisation of our products, and so the highlight was revenues increasing quarter on quarter, finishing with about US$3 million in our first year of commercialisation.
So, the cash position is $11 million at the last reporting period. We don't need to do any equity funding. If we need to fund additional growth in the company, we can do that through debt funding, given the cash flows we have. Next financial year, we expect to have significantly increased our revenues well beyond what we've currently reported.
Twelve months from now, I'd expect to see the company grown significantly, its revenues not just in textile sector, but also electronics sector, defence sector - and growing globally, not just in the US, as well. But, importantly, I'd expect to see a branding situation, where we have Alexium tags on products around the world as a symbol of environmentally-friendly quality.
