Carbonxt (ASX:CG1) seals contract extension until 2030 with largest US customer - Kalkine Media

Highlights

• Carbonxt (ASX:CG1) has won renewal and extension of its supply contract with Wisconsin Public Service for activate carbon (AC) pellets.
• The contract, which first commenced in 2016, has been extended until 2030.
• Carbonxt believes that the contract upgrade provides strong foundation for growth in the US AC pellet market.
• The company is witnessing continued growth in its sales pipeline across the country.

Carbonxt Group Ltd (ASX:CG1) recently updated on a major development concerning a contract from its largest customer in the US, utilities provider Wisconsin Public Service (WPS). The company secured renewal as well as extension of its supply agreement with WPS for activated carbon (AC) pellets.

The development marks the continuation of a highly successful collaboration designed to develop an engineered pellet solution for reducing emissions, the US-focused cleantech company highlighted. The contract upgrade has laid solid foundation for the company to boost its operations in the US AC pellet market. Alongside, CG1’s sales pipeline has been scaling up perpetually.

Longstanding ties between CG1 and WPS

WPS is the company’s largest customer in the US market. Carbonxt has been working with WPS since 2016 to reduce emissions at its Weston Power Plant near Wausau, Wisconsin with suitable emission-reduction solutions.

During the last six years, approximately 12,000 tons of the proprietary pellet technology has been delivered by Carbonxt from its activated carbon pellet manufacturing plant based in Arden Hills, Minnesota. According to Carbonxt, the facility generated more than AU$30 million in revenue during that period. The production unit was built to provide emission-reduction solutions for WPS.

Carbonxt believes that it has successfully utilised the intellectual property (IP) and in-house construction knowledge garnered at Arden Hills for development and manufacturing several AC pellet technologies for industrial clients.

Image Source: ©2022 Kalkine Media®, Data Source: Company Announcement

Specifications of the contract upgrade  

Under the fresh contract between the two firms, Carbonxt will extend the supply terms for its proprietary AC pellet product, as part of WPS’ innovative ReACT emissions control system.

The term of the contract has been extended until 31 December 2030 and the contracted price has been raised by around 20%. The new contract will be effective from 1 January 2023.

Image Source: ©2022 Kalkine Media®, Data Source: Company Announcement

CG1 shares traded at AU$0.10 in the early hours of 21 October 2022 with market capitalisation of AU$21.58 million.