Diamond Wood China Cleantech – Cleantech Buildings Materials (ISIN: GB00BD1LVD21) – Chairman Greg Lee caught up with DirectorsTalk for an exclusive interview to discuss the listing of CBM on the Nasdaq First North exchange, Accoya wood, their Chinese partner SOCO and how investors can access the Nasdaq First North exchange
Q1: Now, Cleantech Building Materials is listed on the Nasdaq First North Exchange, it listed in December last year, can you tell us a bit more about the business and what your focus is?
A1: Cleantech Building Materials is a UK company which was seeking investment in a high growth business in the environmental technology sector. During its search, Cleantech was introduced to a Hong Kong-based company, Diamond Wood, which some 10 years ago acquired exclusive licence to produce and sell Accoya branded wood in China. Diamond Wood acquired that Accoya wood licence from Accsys Technologies, which is a dual-listed company on AIM and Euronext, and at that time Accoya production technology was still in its infancy, the technology market demand was not yet fully validated on a commercial scale. A decade later, Accsys have demonstrated that building and operating an Accoya factory is quite a profitable business and Accsys themselves have announced their intention to double the capacity of their Accoya factory, which is based in Holland, in order to keep up with the demand here in the European and US markets. So, the basis of these positive developments at Accsys’ Accoya factory and the strong demand in Asia for high performance woods, Cleantech Building Materials decided to acquire Diamond Wood and then listed the joint company on Nasdaq just some 4 months ago, in December 2016. We’re very pleased with the combined group and with the listing on Nasdaq.
Q2: You’ve mentioned that the focus is on Accoya wood, can you tell us what Accoya is and what it’s used for?
A2: Accoya wood is a technically-modified wood that is used by construction firms and wood product manufacturers to produce outdoor products like decking, windows and doors, outdoor furniture, cladding, basically anywhere you need high performance wood to withstand things like fungus, bacteria, termites. In layman terms, what is done is a piece of timber is modified through an environmentally-friendly chemical process that actually changes the molecular structure of the wood, making the result of the Accoya wood no longer tasty to those same fungi, bacteria and termites. To give you an idea of how effective this technology is, Accoya has been certified by government and wood industry bodies in the UK, Germany, Holland, the US to last for over 50 years outdoors so, as much or even more than well-known tropical hardwoods like teak for example, it’s a spectacular product.
Q3: You’ve announced plans to build the first Accoya wood factory in China this morning, in conjunction with a Chinese partner, SOPO. Can you tell us more about these plans?
A3: Cleantech Building Materials currently imports Accoya, manufactured by Accsys in Holland and then ship it out to Asia, now for some time we’ve had plans in place to enable us to build and operate our own Accoya factory in China. The company has also been evaluating the benefits of working with a local Chinese company, someone who can bring significant experience in building chemical-related factories. During these discussions with different potential partners in China, Cleantech Building Materials met with the SOPO Group who really stood out from the rest of the potential local Chinese companies for two reasons:
First, SOPO is a major Chinese state-owned chemical group, they do about €1.5 billion in revenues, have some 4,000 employees, they have been building and operating chemical factories in China for decades now, it’s our belief that with SOPO as a partner, CBM could build its factory faster and cheaper than our current planning.
The second reason is that SOPO is China’s largest producer of the underlying chemical that we use to produce Accoya so by partnering with SOPO, it not only guarantees supply but Cleantech Building Materials can also produce Accoya at improved gross margins compared to our business model. It’s a great partnership which has a number of potential benefits to de-risk the factory roll-out and accelerate the growth of our business in the near term.
Q4: Now, Cleantech Building Materials is listed on the Nasdaq First North in Copenhagen, can international investors access this exchange?
A4: Yes, absolutely. Nasdaq First North in Copenhagen is, as you know, a very popular exchange for growth companies in Europe with more of a global profile, similar to Cleantech Building Materials which, again, is a UK-based company, has acquired a Hong-Kong-based company in Diamond Wood, with operations in China. Most brokers can provide their clients with access to trading on the Nasdaq First North and I invite all of your listeners to have a look at Cleantech Building Materials which is a rising star to watch on the Nasdaq First North market this year.