14 Nov 2013 07:00
14 November 2013
Hydrodec Group plc
("Hydrodec", the "Company" or the "Group")
Transformer oil plant co-location and tolling agreement in Australia
Hydrodec Group plc (AIM: HYR), the cleantech industrial oil re-refining group, has today entered into an agreement to co-locate its Australian transformer oil re-refining operation at the Southern Oil Refining Pty Limited (SOR) lubricant oil re-refinery in Wagga Wagga, New South Wales (NSW). This will create a single re-refining site of scale in NSW, improving Hydrodec's cost and operational efficiency, and substantially enhancing operational resilience. SOR will operate the combined facility under a tolling agreement.
SOR and its partner JJ Richards are leading collectors and re-refiners of general used lubricant oil in Australia and are currently constructing their second re-refinery complex at Gladstone, Queensland. Today's agreement proposes co-locating Hydrodec's industry- leading used transformer oil re-refining technology with Australia's leading general used oil re-refiner at SOR's Bomen site in Wagga Wagga, NSW. Hydrodec will retain all rights and ownership of the Hydrodec brand, business and technology in Australia and will continue to manage all commercial aspects of the business including used oil procurement as well as sales and marketing of SUPERFINETM transformer oil and naphthenic base oil.
SOR has also agreed to support development of the Hydrodec technology for used industrial and engine oils and would be a potential partner for the new technology in Australia not only at Wagga Wagga, but also at its new development in Gladstone, Queensland subject to technical and commercial agreement.
Costs of the transition of the plant will be developed through a detailed planning process; benefits due to scale, operational synergies and business resilience are expected to offer an attractive return. Co-location is conditional on permitting for the expanded operation at Bomen which has already been applied for.
Ian Smale, Chief Executive Officer of Hydrodec, commented: 'This agreement is another example of our focus on delivering our strategy through partnerships that integrate the value chain and create opportunities both to lower business risk and develop our technology. Southern is an exceptional operating company and will be a good steward for our operation in the region; its link to JJ Richards offers other logistical opportunities for the collection and distribution of transformer oil and, as with our recently announced partnership with Essar Oil in the UK, we are partnering with successful companies that can make a real contribution to the growth and capability of our business.'
Tim Rose, Southern Oil's CEO, commented: 'We're excited about the prospect of our two companies working together. We have complementary strengths and specialist expertise in our businesses and combined we will be able to leverage those strengths to pursue new opportunities in Australia and internationally.'
For further information please contact:
Hydrodec Group plc 020 7907 9220
Ian Smale, Chief Executive
Chris Ellis, Chief Financial Officer
Peel Hunt LLP
(Nominated adviser and broker) 020 7418 8900
Richard Kauffer
Daniel Harris
Vigo Communications (PR adviser
to Hydrodec) 020 7016 9570
Patrick d'Ancona
Chris McMahon
Notes to Editors:
Hydrodec
Hydrodec's technology is a proven, highly efficient, oil re-refining and chemical process initially targeted at the multi-billion US$ market for transformer oil used by the world's electricity industry. Spent oil is currently processed at two commercial plants with distinct competitive advantage delivered through very high recoveries (near 100%), producing 'as new' high quality oils at competitive cost and without environmentally harmful emissions. The process also completely eliminates PCBs, a toxic additive banned under international regulations. Hydrodec's plants are located at Canton, Ohio, US and Young, New South Wales, Australia. Hydrodec recently acquired the business and assets of OSS Group, the UK's largest collector, consolidator and processor of used lubricant oil and seller of processed fuel oil, with a national network of oil storage and transfer stations, currently serviced by a fleet of more than 90 trucks which collect used oil and other garage workshop waste from over 30,000 customers. Used oil is converted into processed fuel oil at OSS's plant at Stourport and principally sold on to the UK quarry and power industry.
Hydrodec's shares are listed on the AIM Market of the London Stock Exchange. For further information, please visit www.hydrodec.com
Southern Oil Pty Limited
The Australian owned Southern Oil Refining (SOR) is based in Wagga Wagga, and its re-refinery is situated at Bomen Business Park (5kms north of the Wagga CBD).
The re-refinery produces a range of quality base oil products all manufactured from previously used lubricant oils, rather than from crude oil as at the traditional oil refineries. The re-refinery also produces a range of fuel oils as by-products.
Manufacturing quality base oils by re-refining used lubricant oil has significant environmental benefits over refining from crude oils to the same specifications. Tests have demonstrated that SOR oils are at least as good as and in some specific ways better than base oils made from crude oil.
The SOR process prevents the release into the environment (on land and in water courses) of waste oil and ensures that contaminants are properly removed and safely disposed.