Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
I’m on it tomorrow itacon. John stated in the video last July the strategy was “make & sell” no licencing. Will be interesting to hear if there is any shift in that, though I doubt it because they know what a massive market competitive advantage we have, and wish to retain full & complete control of that. I hope my submitted question gets answered, which is:
“When would you expect to commit capital spend, to double/significantly increase existing plant capacity from current plant limit (equivalent I believe to ca. $15M sales), thereby further enabling the journey to the 5 year target of $75M sales, and can your existing physical site accommodate such increases?”
Yes Elsol, I’ll be getting out my calculator after results/forward view from the CEO. There will be bumps on the way for sure to my medium term target of 20p, but the great thing about this company is: we make stuff, we make product, product targeted towards industry dislocation(s), pushed on by regulatory and consumer drivers. And it seems our market penetration grows on an almost daily basis (thank you parob et al for the fantastic list).There are threats, of course, but I’m sure John Shaw will have them in his crosshairs.
Hadn’t seen that before AJP - some good stuff in there. What I hope we might hear or glean from next week is a sense of the Factory capacity increase timeline to take us beyond the current $15-$20M. With „$335M Rev Potential from current ingredients“ that’s a LOT of extra factory planning, if even half of those chickens come home to roost, over the next few years. Very exciting & hovering over the buy button, again!
Here‘s a recap, for any new investors on here, of some of the key points made by John Shaw in last July‘s video. Im REALLY looking forward to hearing where we are on our journey.
Key Points:
- "make & sell" ie no licencing
- "recognised leader in bio-based chemicals"
- "only producer of these types of polymers in the world"
- "$335M Rev Potential from current ingredients"
- "$75M Rev Target over next 5-10 years" "on existing formulations"
- non-phosphate detergents: "active projects $20M revenue potential" $5M revenue potential from NA alone on "formulations we're already validated in"
- once in, after lengthy selling cycle (3-4 years), there are "sticky revenues"
- "500-600 samples/year going into labs" supporting customer NPD
- "current capacity upwards of $15M"
- from Q&A part: "currently running 2 shifts with multi-million $ growth potential"
- "low capital spend requirements"
- "very few retail stores in NA that don't have our product"
- NA & Europe main focus (Asia still permits phosphate based detergents & lower consumer use of dishwashers)
Thanks guys that‘s a good start. Elemental per end of 2019 was believed to have around 150 customers. I’d love to develop an understanding of hard sales numbers eg. average revenue per customer - but that might be difficult to do as I don’t believe they publish results.
I see as an important clue/metric, as it might give us a revenue steer for their DMTR channel sales into the US (and vice versa).
One thing is for sure both management teams will have shared with each other a lot of that specific, by account/segment, revenue generating potential which has led to their exciting joint sales & distribution initiative.
I’m not expecting a running commentary on a monthly basis from the board, which can sometimes achieve the opposite of the desired effect (I’ve been burned on VRS on non-revenue announcements which due to their volume lost currency).
So while our CEO will be for sure watching monthly numbers like a hawk as the business develops and grows, I am happy on the comms with quarterly updates, unless of course other RNSable events occur in between, which I wouldn’t rule out, given the space we operate in.
Who knows what’s going on in the background AJP (besides good organic growth) - time will tell. My medium term goal is 20p - if we get there quicker by other means, ok by me. Looks more like a twig shake though, than tree shake - only £13k of shares traded today so far.
Good question AJP! Possibly, but the honest answer is I don’t know. There’s operational stuff we don’t know on pricing, volumes, run-rates by products etc. etc., commercially sensitive a lot of it, which make that precise judgment difficult. But for sure it’s a question of WHEN we break-even & not if. Thereafter it’s a question of how far can profitable growth go...
A big clue for me is when next capital spend to increase plant capacity will occur and will advise if I hear from ITX re. my email enquiry on that point.
Thanks AJ. Here’s another interesting metric for us to consider. Croda global sales ca. £1.4Bn & no. of employees worldwide ca. 4000+ giving ca. £350k/employee.
Given our current staffing that metric would give us a chunky number - but of course there are lots of reasons why the direct comparison cannot yet be made at this precise point in time. In a couple of years though a 100 employee operation, with sales of £35M on that metric, and probably only still scratching the surface of the exponential growth we strive for, should be on the radar.
Not sure if Jim Gordon‘s name had popped up before, but his credentials (formerly Unilever & McBride) look bang on.
https://uk.linkedin.com/in/jim-gordon-85a51a29
Loot „just because these brands use Itaconix acid...“
They don’t - they use products derived from it. Itaconic acid is our raw material which is polymerised using Itaconix IP and then sold as Velasoft (Sodium Polyitaconate) https://itaconix.com/wp-content/uploads/Tech-Data-Sheet-VELASOFT-v2.0.pdf
Itaconix is a World Leader in this field, no doubt.
Yes flow you’re right. End of 2022 it will look a lot different. We are on a long positive burn here - it’s like a hike up Ben Nevis and we’re just out of the car park, crossed bridge over the water of Nevis and begun the initial climb. Over the next while - like the mountain - we will for sure ask are we there yet/how far still/it’s a bit of a slog! but on the way up we can turn around occasionally and view where we’ve come from, which will amaze us, but not nearly as much as the view from the top when we’re there. Note: I’ve been on Ben Nevis on a clear day!
It feels like we are motoring along nicely, quietly going about building the business, where the regular releases of quarterly news, I see as further confirming upward ticks in the delivery of the company’s long term strategy. That can mean news feels light compared to other overhyped AIM co.s., where everyone hangs on the next fortnightly RNS (been guilty of that myself), but this is good different.