Cleantech investment company Greenhouse Fund has increased its stake in Molectra, which processes waste tyres.
The conversion of A$1.7m of loans has taken the fund’s stake in Molectra to 64.3%. It will need more funding if it is to grab the opportunities on offer. Alternative funding methods are being considered.
Molectra receives a fee of 18 cents/kilo for taking the waste tyres and it costs 30 cents/kilo to process them. The resulting crumb rubber can be sold for around 55 cents/kilo for road building. Alternatively it can be made into products for the equine market or other uses. It costs another A$1/kilo for processing to make it suitable for these alternative products but the selling price is A$3-A$5/kilo.
Small amounts of steel and other products are also produced in the process and they can also be sold, but they generate relatively modest amounts.
The capacity of the initial Brisbane plant is being built up and there are plans for another plant in Sydney. The payback periods should be short if higher value added products are sold. Longer-term, plants could be set up in partnership with mining companies for specific mines. They can process old tyres and make products useful for the mine, such as conveyor belts. International expansion is also planned.
Greenhouse also owns the rights to certain uses of Aim-quoted Virotec’s Bauxsol technology. Greenhouse director Paul Gazzard was involved in the spinning off of part of Virotec’s business into Hydrodec, the Aim-quoted company that is now bidding for Virotec itself.
Greenhouse is looking at additional investments. It wants to acquire a majority stake or a large minority stake in any businesses that it does invest in. Greenhouse still has £5m of the £10m it raised back in January 2006 in its bank account. This will provide the cash it needs for existing investments and leaves some for new ones.
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