Eco Investor September 2015

Unlisted Companies

New Plants for Green Distillation Technologies

Environmentally friendly tyre recycler Green Distillation Technologies (GDT) will soon open its first commercial plant, at Warren in central NSW, and has committed to building a second plant in Tasmania.

Chief executive, Craig Dunn said the Warren plant will start integrity testing on 4 September and if this goes well will commence commercial production. The plant can process 19,000 tonnes of used tyres each year or about 3 per cent of Australia's annual used tyres.

The company eventually aims to have seven plants processing 21 per cent of used tyres, plus expand overseas.

GDT is based in Melbourne but the developer of the technology, Denis Randall, lives in Warren, which is between Dubbo and Nyngan, and the Warren Weekly reports that many Warren residents are investors in the company.

Founded in 2009, GDT has raised $8.2 million in private equity and $6.3 million from government grants, said Mr Dunn.

The company recently commenced a pre-IPO raising for $12.75 million and has already raised $1 million of this. The target is for an IPO in 2017 but Mr Dunn said this is not firm.

The plans to expand overseas include Thailand, where GDT has received a permit to build a plant. This made local news when Warren was recently visited by a Thai delegation to inspect the proof of concept commercial scale module.

Recycling used tyres is a world wide problem with few satisfactory solutions.

GDT's technology is a form of pyrolysis which it calls ‘destructive distillation' as it uses heat to reduce the tyres to their constituent elements. These reform into oils that are distilled, the carbon is turned into high purity powder, and the steel is clean and unchanged.

The company says the process is emissions free. The constituent materials can be recycled, and the recycled oil can also be used for heat in the production process. The oil is seen as a renewable fuel as it has an organic source and is part of the carbon cycle.

Mr Dunn said the company has buyers for the constituent elements. The oil is the biggest component and the market further refines it for use as fuel; there are negotiations underway for the pricing and volume of the carbon; and the steel is sold through an agent in Japan.

In May Eco Investor reported that GDT was Australia's first finalist in the Edison Awards and was a bronze winner when the awards were announced in New York in April. The Edison Awards are said to be the world's top award for innovation.

One investor who recently made a small initial investment said his first impressions of the company were favorable.

Greg Collette said "They use an accepted scientific process (pyrolysis) to break down the tyres, the old tyre feedstock is cheap and plentiful and there are clear markets (though not all signed up) for their products. The process has been proven in practical trials and the first factory starts production early September. Their management are experienced and the Chairman has a good track record.

"Most of all, they solve an until now intractable pollution problem currently covered up in landfill. Their strong potential for both financial and ecological success make them, for me, a worthwhile speculative investment," he said.

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