- Carbonxt Group has received a million-dollar order for its activated carbon pellets from a Wisconsin-based power station.
- The number of orders is increasing, indicating strong demand for the Company’s cleantech products.
- Increased economic activity and the US government’s approach to environmental issues are driving the demand for the Company’s products.
Carbonxt Group Ltd (ASX:CG1) continues to register solid growth prospects, backed by its specialised activated carbon products.
A new order for its activated carbon pellets has further validated the strong potential as well as strengthened its revenue base. In a significant update, the Company announced the receipt of the US$1 million order from an existing power station customer in Wisconsin, US.
Last month was also quite eventful for the Company, which closed a major capital raising program and secured a one-time grant of US$474,000 from the US government.
CG1 bags new order worth US$1 million
The US-focused cleantech company has received the order for the supply of 500 tons of its activated carbon pellets. As a result of the latest order, the total orders from this customer surpass US$3.0 million.
CG1 will manufacture and supply the pellets from its Arden Hills facility in Minnesota. The order is due for completion over the period of four months beginning next quarter (Q1 FY22).
The Arden Hills facility will be at full operating capability, provided the concentrated period around which the pellets are required to be supplied.
The pellets help in lowering emissions from industrial processes such as power generation by capturing a variety of pollutants, including mercury, sulphur dioxide, and nitrous oxide.
Growing demand for CG1’s cleantech products
This is the first time since the onset of COVID-19 that CG1 is experiencing growing levels of inquiry from its customer base and receiving new orders for powdered-activated carbon products. These orders are mainly from the US power generators that have a larger commitment to lowering emissions.
The increase in customer orders indicates the growing demand for the Company’s cleantech products, which capture various pollutants and minimise emissions. Moreover, CG1 believes that the growing demand from the existing US customers is steered by accelerated economic activity and the new approach of the US government to environmental issues.
Besides this, the development of new solutions is progressing well, aimed at expanding the Company’s addressable market into industries that were not serviced earlier. The initiatives align with CG1’s growth strategy in the US, as the Company plans to accelerate manufacturing operations in Kentucky. The Kentucky facility is anticipated to become operational in the December 2021 quarter.
CG1 anticipates further revenue of around AU$20 million and profit margins of 20-30% at full production.
Source: CG1 Announcement 16/06/2021
Existing and upcoming facilities
At present, CG1 operates three facilities in the US. A fourth facility is expected to enter the construction phase in short term, as it remains subject to permit approval.
AC stands for Activate Carbon, Data Source: CG1 Announcement 16/06/2021
Another recent success of the Company was the recognition from the University of Florida. CG1 was picked as number 10 in the list of the university-recognised Top 100 companies that include at least one alumnus from the University of Florida.
All in all, greater commitment towards the reduction of emissions is expected to drive the cleantech sector towards further growth, thus resulting in opportunities for CG1.
CG1 stock was trading at AU$0.130 at 2:11 PM AEST on 18 June 2021.