EGM Chairmans Address
Since our General Meeting in November 2013, the company has faced many headwinds. Despite this, management has achieved significant outcomes, which underpins the commercialisation of Coldry and the board’s confidence in stating that “the commercialisation of Coldry has never been in a better position than it is today.”
The first few months of 2014 were difficult for the company as a result of the ALDP announcement and the subsequent issue of false and misleading rumours in the market. These events caused disruption to the planned issue of new Options and the board unanimously decided to suspend the program pending more amenable market conditions.
Other than making reference to the market announcement associated to the “false and misleading rumours”, we are unable to make further comment on this issue until such time that the authorities conclude their review of this matter.
While, at the time, it was regrettable that the company did not receive an ALDP grant allocation, this led to greater focus on the India strategy.
Shareholder’s should take comfort from the feedback received from the Victorian State Department administering the ALDP that, ‘Coldry was vastly superior… in the areas of environmental footprint and energy efficiency… and appeared to be the most efficient drying method reviewed.’
At that point in time, our capital cost estimates for the proposed Latrobe Valley based CDP project was approximately AUD$60M. Reducing the CAPEX estimates became the primary focus of our commercialisation plan for Coldry.
The company then accelerated our plans aimed at establishing an Indian manufacturing base and developing Coldry projects in India.
The results from this plan have led to CAPEX cost reductions of up to 75% in India, the establishment of an EPC partnership with Thermax as well as improving the feasibility of a Coldry project with NLC and others.
The board maintains its target of a Coldry plant reaching financial close in India in 2014. We also believe that the establishment of a global fabrication and construction partner in Thermax provides a credible basis for developing Coldry projects in Australia and other countries where projects had previously been considered.
As we near the end of Coldry’s commercialisation pathway, many lessons have been learned and capabilities developed. The management team have embodied the frugal innovation principles developed through this journey, and are able to provide effective replication of commercialisation services for other relevant technologies, including Matmor and other synergistic integrations of Coldry.