New IPO to convert waste plastic to low sulphur diesel

“Many types of waste plastics that currently cannot be recycled will be converted into low sulphur diesel. For example, a simple ice-cream container, weighing just 68 grams can be converted into a diesel fuel which will power a VW Golf car with a diesel engine for almost 1.28 kilometres. “Other plastics that can be converted into low sulphur diesel include chemical and oil containers and bottles, municipal solid waste plastics such as wraps, packaging, bottles and toys; as well as milk crates, silage wraps, irrigation tubing, polypiping and polystyrene packaging,” said Mr Vinson. Currently, 88 per cent of the 1.5 million tonnes of plastic consumed in Australia annually is sent to landfill, this amount could convert to more than 1 billion litres of low sulphur diesel.

Renewable plant oils, animal fats and used cooking oil into Biodiesel Axiom Energy’s Biodiesel can be mixed in any ratio with petroleum diesel to create a blend, for sale on the general diesel market.

Biodiesel can decrease emissions of greenhouse gases by over 90% (biodiesel made from used cooking oil); it is non-toxic and improves operational performance.

Axiom Energy will also have the advantage of an existing facility in Laverton, Victoria, which is being acquired from The Victor Smorgon Group. The Laverton plant will undergo an immediate upgrade and be commissioned in July 2006. It is forecast to produce 70 million litres of biodiesel in FY2007 and will have a nameplate capacity of 100 million litres per annum.

Major trading companies, Cargill and Gardner Smith will supply the renewable plant oils and animal fats, while used cooking oil will be obtained from Victoria’s largest used cooking oil collection business, acquired by Axiom Energy from the Victor Smorgan Group.

Axiom Energy $37.6 million IPO opens to Australian investors Axiom Energy IPO formally opened August 29 with the offer of 47 million shares at 80 cents each, raising $37.6 million and creating a market value at listing of US$82.7 million.

ABN AMRO Morgans Corporate Limited has underwritten the offer, which will close 29 September 2005.

With agreements for all production inputs, technology and production outputs secured, Axiom Energy’s business model is designed to generate profits immediately upon commissioning of both its low sulphur diesel and biodiesel plants in July 2006. Revenues of US$70.1 million, EBITDA of US$16.8 million, NPAT of US$10.1 million and a free cash flow of $14.4 million are forecast for FY2007.

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