HYR.L Regulatory News (HYR)

23 Oct 2006 10:41

HydroDec Group plc23 October 2006 USA DEVELOPMENTS MARK THE START OF HYDRODEC GROUP INTERNATIONAL EXPANSION Hydrodec Group plc ("Hydrodec" or "the Company") is pleased to announce plans toconstruct two Superfine transformer oil plants in the USA. This followssignificant interest from the American transformer oil market and theidentification of a number of suitable sites that may attract financialincentives to locate there. It is anticipated that the two plants, one in theNorth and one in the South of the United States, will be close to key centres oftransformer oil demand. This should give Hydrodec significant exposure to thedisparate American transformer oil market, reduce transport and other logisticalcosts and increase the market awareness of Hydrodec's technology when productioncommences. The North American market for transformer oil was estimated to bearound 180 million US gallons in 2005. Each plant will be built on a modularsystem with an initial capacity of between 60,000 and 80,000 litres a day,meaning an eight-fold increase of Hydrodec's current processing capacity. A final decision on the two locations will be announced in early Q1 2007, asHydrodec is currently in the process of finalising negotiations with local andstate government bodies and marketing and industry partners to determine thepreferred locations. Given the experience gained in developing Hydrodec's market in Australia, theAmerican sales and marketing plan for Superfine will be run in conjunction withthe construction of the plants. The Board believes this should createsignificant market understanding and demand for Superfine before productioncommences, with the aim of filling plant capacity as quickly as possible. John Gunn, Chairman, commented, "Feedback from the American transformer oilindustry has been tremendously encouraging. The decision to build two Superfineplants will give Hydrodec exposure to the entire industry and create animmediate impact. This multiplying of our production capacity will havesignificant financial benefits for the company and should give us the economicand industry credibility to consider other major markets for transformer oilsaround the world, following the expansion in the United States. I look forwardto updating the market further with our expansion plans". For further information please contact: John Gunn, Chairman Hydrodec Group plc Tel: 020 7236 6236 Emma Davis Curve PR Tel: 07764 197 003 This information is provided by RNS The company news service from the London Stock Exchange