First Graphene Limited (ASX:FGR) Executive Director Peter Youd explains the significance of the commencement of production at the company's Commercial Graphene Facility (CGF) at Henderson, WA.
Rachael Jones: Hello, I'm Rachael Jones for the Finance News Network. Joining me over the phone from First Graphene is Executive Director Peter Youd. Hello, Peter. Welcome back.
Peter Youd: Hello, Rachael Jones.
Rachael Jones: Your announcement this week regarding the first commercial production for your Henderson Graphene facility. Can you tell us more about this?
Peter Youd: Well, on the first production is the culmination of a lot of hard work since the Department of Environment and Regulation gave us the work's approval in August last year, and we're actually able to commence construction. Through careful planning and management, we've been able to construct and commission this facility for less than the $1 million we had originally budgeted. And we have also installed our own laboratory for QA testing. This amount is considerably less than most other graphene hopefuls are quoting as their capital expenditure.
The plant capacity as it stands and is operating on a single shift basis to produce approximately 25 tons of graphene per annum. The commissioning of a second production cell and a move to 24/7 production would see that capacity lift to approximately 100 tons per annum. I'd venture to suggest that this makes it the largest capacity plant in Australia, if not the world.
Rachael Jones: Now this is just the beginning for you, but could you give the audience a sense of volumes and value of product that you expect to ship this year?
Peter Youd: Well as your listeners would be aware, graphene is an extraordinary material. The Graphene Council has noted that there's been three major impediments to its growth in commerce. These have been that there be adequate volumes available for industry. The supply be of a consistent quality and be commercially suitable in pricing. The new facility from FGR overcomes all of those three issues. We've created three specific product streams for various applications and with different price points. It's important that graphene is fit for the purpose and not one size would fit all applications. For example, a product used in improving cement would be of a different specification to the product, which is required for our fireretardant development. We're working with several customers. In each case, the requirements are ever so slightly different. This is why our own laboratory and development facility is so important.
Rachael Jones: Now to sales. The first sale came when FGR attend the ID Tech Ex Conference in California last year. What is their end use for the graphene?
Peter Youd: The company that bought that was trialing that product in a cement coating that they make in the United States. Recently, we've received inquiries from a number of companies in Australia in the fields in building and construction materials, pipeline construction, coatings companies, polymer businesses, and marine services. Over the next few weeks, several of them will be visiting the plant to review our capabilities and we'll be working with them to ensure that our products meet their specific requirements.
Rachael Jones: Can you tell us about your sales pipeline?
Peter Youd: Sure. We're working very closely with Traxxaswith a view to developing market mechanisms and securing long term architect agreements into leading global companies and industries. Andy Goodwin is interfacing with customers in the UK. Again, we are preparing to provide material to meet their specification. Like any new material, such as plastics in the 1960's or lasers in the early 2000's, there needs to be take up in the market penetration. Like those products, we believe that once take up starts it will be an avalanche. This is supported by the Graphene Council, which projects demand growing at 60% year on year.
Rachael Jones: Last question, Peter. With the facility up and running, what can investors look out for in terms of news flow over the next quarter?
Peter Youd: Well, as we're working, developing, the sales stream we've also got some exciting development happening at the University of Adelaide and Flinders University. News flow from these during next quarter is looking to be both frequent and exciting. Of course at Swinburne University of Technology we're making steady progress on the development of our super capacitor. We're looking forward to and working on a busy and exciting June quarter.
Rachael Jones: Peter Youd, congratulations on this significant milestone. Thanks for the update.
Peter Youd: My pleasure, Rachael. Thank you.