NZ Leadership in Biogas Upgrading Systems

Media Release
3 November 2009

New Zealand Renewable Energy Specialist Extends Global Leadership in Biogas Upgrading Systems

Renewable energy technology specialist, Flotech Group, is poised to extend its global leadership in delivering world-leading technologies to upgrade raw biomass to produce clean biomethane gas to fuel vehicle fleets, communities and power grids.

In the past 12 months Flotech, through wholly owned Greenlane Biogas, has delivered core upgrading technology to the world’s single largest biogas upgrading plant in Güstrow, Germany, is shortly to commission a massive project in Madrid, opened its own office in North America and won early sales for its range of proprietary, revolutionary plug and play, transportable biogas upgrading plants.

“Flotech is an unusual business. We originated in New Zealand where we have our design, specialist engineering and software hub, but keep a low profile yet we are a highly internationalised and well known as a category leader offshore with regional manufacturing, sales and service hubs in Australasia, Asia and Europe with North America under development,” says Managing Director, Steve Broadbent.

“The renewable energy markets in which we specialise are enjoying incredible opportunities as governments and private entities in major developed countries rapidly step up their investments. The biogas upgrading sector is buoyant with excellent prospects both short and long term, not only for the building of larger plants but also carving out a unique niche with the launch of our plug and play biogas upgrading units, marketed under the Manuka brand range.”

Mr Broadbent said that Greenlane, with 52% share of the biogas upgrading market in Europe and 17% share globally, had a real competitive advantage and market credibility.

“We have an unmatched 20-year track record in delivering proven, clean and cost effective renewable energy technology that uses water to purify biogas for conversion to biomethane suitable for pipeline quality gas and vehicle refuelling.

“We have also delivered projects that are unmatched in scale. The Güstrow project is five times bigger than any competitor in Europe has completed and we have also maintained our leadership in small and medium sized plants with orders for 10 new projects in the year to date. Now we are consolidating our first mover advantage with the Manuka plug and play units,” he said.

Mr Broadbent acknowledged the assistance of government innovation sponsorship through the FRST programme in bringing the Manuka range to market and also the successful relationships that have been built with New Zealand Trade and Enterprise in extending offshore contact networks.

The new compact plants are literally off the Greenlane shelf and can be transported in a container on the back of a truck. They are cheaper than customised or individually designed plants and ideal for safe and simple energy conversion for communities, commercial, agricultural and industrial sectors, public bus and vehicle fleets and power grids.

Early sales have been encouraging. Customers, including public vehicle fleet operators and municipalities, are using the units in Sweden, the UK, France, Japan and Asia and an even bigger model than the current 2000Nm3/h plus capacity unit would be added to the range to meet demand.

Mr Broadbent said securing further licensing agreements would be an integral part of the marketing strategy to gain critical mass as quickly as possible and fulfil the revenue potential from the proprietary plants.

Flotech has also expanded into North America, operating from a Vancouver base with its own locally recruited sales team under the direction of a highly competent executive with direct energy sector experience and an engineering and management background. The first projects in North America are already being implemented.

While a strategic priority is to build the Greenlane Biogas business, Flotech’s gas and compression systems division, the Group’s core revenue generator, continues to perform strongly. Work is in progress on a significant contract for a power plant in Brazil as a result of a long term customer’s referral and GE supplier and customer relationships are longstanding with good forward orders.

“Flotech’s approach to the sector is to be nimble in providing standardised packages that can be rapidly and efficiently delivered by manufacturing components in regional hubs or via outsourcing partnerships while staying abreast with new innovations that will add value to the customer,” Mr Broadbent said.

The Group’s AfterCare division is also poised to grow exponentially with remote monitoring and service provision options available.

In the year to March 31 2009 Flotech achieved creditable growth in revenues and profitability on the back of strong demand for the expanding range of biogas upgrading systems, smaller FPSO projects which earned healthy margins, prudent financial management to lower cost of products and favourable exchange rates. The privately owned company has set high growth targets for 2010 and beyond.

“The main challenge is a happy one - to grow fast enough to continue to enhance our market leading position,” Mr Broadbent said.

“The goal is to be a competency based business offering tailored relationships and a standardised product offering like the design and manufacture of a car with optional add-ons. That means we must continually improve and extend our product and service offering so we are committed to investing in research and development to bring innovations to market as quickly as possible.”

Flotech - at a glance

* Privately owned international renewable energy specialist with New Zealand as the design, testing and prototyping hub for the Group’s products, software, instrumentation and services with regional offices strategically located in Australia, Southeast Asia, Europe, North America delivering sales, service and support

* Revenue and profits increase with sound financial performance and solid balance sheet in year to March 31 2009 with positive outlook for growth in biogas upgrading, gas and compression and AfterCare divisions

* Encouraging early sales of Greenlane Biogas patented plug and play off the shelf Manuka biogas upgrading plants producing biomethane to fuel vehicle fleets, communities and power grids

* Delivered core upgrading technology to the world’s single largest biogas upgrading plant in Güstrow, Germany, five times bigger than projects undertaken by any competitor in Europe and maintained leadership in small to medium plants

* Greenlane commands 52% share of the global biogas market in Europe and 17% globally with 20-year track record and plants operating in Spain, France, Japan, Korea, Sweden, UK and elsewhere

* Expanded into North America

* Healthy gas compression systems orderbook with quick to market solutions available

* Enhanced AfterCare service, remote monitoring and maintenance offering

* Building core competencies in design, project management, quality assurance, innovation, supply chain operation, market knowledge and tailoring relationships

ENDS

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