First Graphene Limited (ASX:FGR) Non-Executive Chairman, Warwick Grigor, talks applications from smart concrete, fire retardants, batteries and growing the market for the company's specialist graphene.
Jessica Amir: Hello Jessica Amir here for the Finance News Network, with First Graphene Limited (ASX:FGR) Non-Executive Chairman, Warwick Grigor. Warwick welcome to the Network.
Warwick Grigor: Thank you Jessica.
Jessica Amir: First up, you operate a graphene processing facility in WA. But for new investors who don’t know about the company, just give us a quick introduction?
Warwick Grigor: We started out as a graphite company, known as First Graphite. But when we changed our focus to technology developing IP and graphene, we thought it was appropriate to change the name to First Graphene. Vertically integrated, we produce our graphene from our own raw material, from Sri Lanka. 97 per cent grade graphite and turn it into graphene. We finish it and we prepare it for sales into industry. Market capitalisation is currently about $75 million, having grown from less than $10 million a couple of years ago.
Jessica Amir: Tell us about the work that you’re doing in adding graphene to concrete?
Warwick Grigor: We’re finding that adding less than one per cent graphene to concrete, can double its strength. It can reduce its porosity. It basically makes concrete much better and much more useful, at very little additional cost.
Jessica Amir: Can you tell us what you’re doing in the flame retardant coating space?
Warwick Grigor: We have developed a fire retardant that we call fire stock, because it doesn’t just retard, it stops it. Stops it more effectively than existing fire retardants. We can produce it at one quarter of the cost; it’s non-toxic. And once we get through getting Government approvals, I’m quite sure it’ll be the fire retardant of the future. It’s a no-brainer it’s so good.
Jessica Amir: What are you doing in the battery technology space?
Warwick Grigor: We’re developing a supercapacitor. A supercapacitor is based on physical storage, rather than chemical storage of energy. It means you don’t need lithium, you don’t need cobalt, you don’t need potentially dangerous metals. It’s all about plugging in the supercapacitor to a power source, rapidly charges in 10 or 15 seconds, instead of one hour or two hours and it’s the future. It will mean your mobile phone will last not 1,000 cycles, but 10,000/20,000/30,000 cycles. Your mobile phone is going to be thrown out, because it’s old technology before your battery runs out.
Jessica Amir: Now can you tell us about your graphene processing facility, south of Fremantle?
Warwick Grigor: At Henderson, we have commissioned a 100-tonne per annum production facility. If that was operating at that capacity, we could be earning in the order of $10 million EBITDA. At the moment, we’re all sitting at the starting gate; we’ve got the production ready to go. Now we’re working on building our sales book, which will build up over the next year or two. It’s a process of working with industry, teaching them how to use graphene and going from initial sampling and testing, into evergreen sales contracts.
One of our major competitive advantages is having 97 per cent grade graphite from Sri Lanka. It’s the only country in the world where you can find, or mine that product. There’s actually a shortage of it. So what we’ve done is we’re both buying from the Government mine, and we’ve developed our own mines to give us diversity of supply. Grade is king, 97 per cent grade. Direct shipping you also need, no aboveground processing plant, we just mine it and bag it, and ship it down to Fremantle. It gives us tremendous cost advantage over any other source of graphite.
Jessica Amir: Now to a big picture. Just tell us about your strategy and how that’s progressing Warwick?
Warwick Grigor: If you’re producing a commodity, be it graphite or graphene, they can be commoditised. Look at what is happening with China, manufacturing is commoditised. The real asset class that we want to be building, licences, patents, industrial, intellectual property. By building a portfolio of those through doing the development size and patenting processes, of applying graphene into different materials, it doesn’t matter whether they’re using our graphene or someone else’s graphene.
If they’re using graphene from any source using our licences, we will have a growth curve that will just keep growing. It’s not a cyclical business. Over the next 10/20 years, the more graphene penetrates into the industry, which I think is a given, the growth curve will just keep growing. And we won’t be constrained by a physical size of production, either graphite or graphene. It’s all about developing the IP, selling licences and collecting royalties. That gives us maximum leverage for the amount of capital that we’ve invested. And it’s the best way to look after our shareholders.
Jessica Amir: Lastly Warwick. Why would an investor be adding FGR to their portfolio?
Warwick Grigor: If you’re going to get involved in graphene, you should be getting involved in the company, which offers greatest opportunities at lowest risk. Because we’ve got production facilities now, because we’re the lowest cost, we offer great opportunity and optionality. Anyone else in the business is not as advanced as us, they don’t offer as an exciting risk reward profile. We’re at the starting gate now; graphene is the material of the future. First Graphene has a corporate objective and an ability, to be the leading company in that revolution. That’s what we’re all about, that’s what we offer shareholders.
Jessica Amir: Very compelling. Warwick Grigor, thank you so much.
Warwick Grigor: Thank you Jessica.