First Graphene (ASX:FGR) expanding applications


by Jessica Amir

First Graphene Limited (ASX:FGR) Non-Executive Chairman, Warwick Grigor talks about increasing the range of applications for the company's PureGRAPH range of specialist graphene.

Jessica Amir: Thanks for tuning into the Finance News Network. I'm Jessica Amir. Today, I'm with First Graphene (ASX:FGR) Non-Executive Chairman Warwick Grigor. Hi, Warwick, and welcome back.

Warwick Grigor: Thank you, Jessica.

Jessica Amir: For those who aren't familiar, First Graphene has been operational for a number of years now, developing graphene-based applications. Where's the business at today?

Warwick Grigor: We're at the pointy end of the business now. Over the last few years, we've developed production capability. We've improved the quality. We are now entering the marketplace and delivering into industry. Shareholders have been crying out for sales. That's where profits come from, and we are starting to deliver that as we speak.

Jessica Amir: Now to your wide array of graphene applications. Just tell us about them.

Warwick Grigor: Well, the two most advanced applications are the fire retardant FireStop. We call it FireStop because it actually stops fires. It is cheaper, non-toxic, and easier to apply than existing fire retardants. That's actually just going through certification now, but we've started selling material for polymer linings for the mining industry, a company in Western Australia, newGen, who supplies Rio (ASX:RIO), BHP (ASX:BHP), Fortescue (ASX:FMG).

What the graphene does there is makes it more absorbent, more flexible, and longer-wearing, so there's savings in labour, in less frequent changes of the polymer, and longer-lasting. We'll probably sell a few tonnes of graphene into that product in 2019, which would make us one of the largest suppliers to any product line in the world. It's quite significant. Elsewhere, we're looking at supplying to the Fiberglass business. We would have news on that over the next month, where that could require five to ten tonnes of graphene a year on our estimates. Other areas, we're making good progress with concrete. We're not selling into concrete yet, but we're getting close to that.

There's FlexeGRAPH, which is a company which is making a new generation of coolants for automotive purposes, for computing purposes. FlexeGRAPH is finding that out. Graphene works better than anything else, both in suspension, in fluids, and ease of handling, so we're opening up a number of verticals which we will be selling into the market in 2019. What shareholders need to understand is, there's no end market as such. You can't just go to the LME and sell graphene. A company has to be developing its own verticals. It might start out small. It might be a few tonnes here or there, but as industry grows, as penetration goes worldwide, you'll get a rapid escalation of sales from that point. It's all about selling into industry. Now, we're delivering into industry. We've got the product. We've got the quality, and industry's now coming to us saying, "Hey, can we use your PureGRAPH in our product?"

Jessica Amir: You also have a number of partnerships and R&D partnerships as well. Just touch on those.

Warwick Grigor: Well, we're dealing with Swinburne, Adelaide, and Flinders, the main universities in Australia, but the real coup that we achieved earlier on this year was an agreement to join the GEIC facility in Manchester. The University of Manchester is the home of graphene. That's where they've got 250 researchers. That's where they've got the most advanced equipment. We've taken a Tier One position on the GEIC center, the Graphene Engineering Innovation Centre (GEIC), that puts us in touch with the cutting edge of industry in the U.K. and Europe. We'll have our own laboratory.

Our method of making graphene, the electrochemical exfoliation method, is being recognised by Manchester as the leader of its type in the world, and they've asked us to put one of our plants in that GEIC facility and they’ll work with us to make it even better than it is, but we'll be rubbing shoulders with much deeper pockets, much more capable research teams.

Jessica Amir: I understand you're getting a secondary listing in London. Tell us about that.

Warwick Grigor: Alternative Investment Market, the AIM market, London, opens up a new avenue for raising capital going forward. The London market is very au fait with graphene. They've got graphene companies over there capitalised at ADU$300 million, compared to First Graphene, which is only AUD$70 million. There's a whole new swath of investors who understand graphene, who are looking for more ways to make money out of graphene.

We worked hard over the last 12 months to get us away from that mining space. We're not a mining company. We're an advanced materials tech company. We want the P/E ratios that they attract 20 to 30 times. Whereas mining companies give us five times P/E ratios. It's the more sophisticated graphene investors in London that are going to help us there.

Jessica Amir: Just lastly, Warwick, before we let you go, where would you like to see the company 12 months from now?

Warwick Grigor: Well, in a year's time, I expect it will be cashflow-positive. We'll be looking forward to growing sales as the year 2019 develops. We will, this time next year, be able to confidently give three year forecasts for sales based on what we've achieved, and I think that if anyone's in any doubt that we're the leading graphene company in the world today, in a year's time, there will be no doubt.

Jessica Amir: Warwick Grigor, thank you so much.

Warwick Grigor: Thanks, Jessica.