Calix eyes $20m ASX listing to scale sewer stink stopper
Summary: The company which stops Sydney's sewers from stinking too much is sniffing out an ASX listing in the next 12 months.....
Calix made $3.6 million in 2016-17 selling a compound which it claims is neutralising sulphuric acid in 90 per cent of Sydney's wastewater pipes, not only stopping concrete corrosion but the production of gas which unchecked would "stink unbearably", according to managing director Phil Hodgson.
Different applications of the compound are also balancing acidity in Filipino prawn farms, and stopping the spread of fungus and pests in Tasmanian tomato crops.
The Sydney-based company would use listing proceeds of $15 million to $20 million to expand its kiln at Victoria's Bacchus Marsh. Here it heats then snap freezes a mineral called magnesite, using a proprietary method it's dubbed "Calix flash calcination", that it claims creates magnesium hydroxide compounds which are unusually reactive thanks to a high surface area.
"If we freeze a mineral just as the gases trapped inside it begin to bubble out, we create a honeycomb that's high in surface area and hence high in reactivity," said Mr Hodgson.
"So in the case of dosing sewers or fish farms, we've got a material that's very effective at oxygenating its environment and preventing bacteria from swinging towards a septic condition, from where you get the nasty bugs forming that corrode concrete sewer pipes or kill bottom-feeders like prawns."
Spraying the compound on crops deterred funguses and pests, without killing them and increasing resistance, Mr Hodgson added.
There were further applications for Calix's calcination process that have global potential, he said, once its production capacity is increased.
For instance processing crushed limestone in its kiln produces a "pure stream" of carbon dioxide which can reduce the cost of carbon capture and storage for concrete manufacturers.
"Regulators aren't too interested in carbon capture in Australia but they sure are in Europe," he said.
Calix has just shared in a €12 million ($18 million) grant from the European Union to build a demonstration concrete plant in Belgium that utilises its technology.
Health concerns around nanotechnology could also be addressed by Calix's process, Mr Hodgson claimed, because its honeycomb structures were too large to penetrate skin tissue, but could mimic some applications of nanoparticles.
For instance Calix intends to enter the race to improve batteries with a compound processed from crushed manganese. Testing at the Imperial College of London had indicated its use as a conductor improved the speed and penetration of the passage of lithium ions in and out of batteries, Mr Hodgson claimed.
"There's more work to do but hopefully this means you can get 800 kilometres out of your Tesla instead of 300, and it charges in minutes," he said.
Calix's particles could be produced at "one thousandth" the cost of nanoparticles, Mr Hodgson added.
Calix has already raised $50 million of equity since being founded in 2005 by a Queensland mining engineer, Conor Horley, whose "one paragraph" business plan piqued the interest of retired University of Sydney chemist Mark Sceats.
The company did not get its first major customer until 2014, when Sydney Water began using its compound to protect and reduce odour from its concrete sewer pipes, as well as spraying it on manhole interiors to prevent their collapse.
The sale was secured after Calix helped the utility design the equipment used to apply the compound, including a "boat" which can be sailed along narrow sewer sections releasing spray automatically.
"We learnt that for that first customer, you have to go surprisingly far downstream, so to speak, to convince them your concept works," Mr Sceats said.
The largest shareholder in Calix is New York hedge fund Och-Ziff, which in 2014 agreed to convert a note into equity.
Funds manager Washington H. Soul Pattinson has a long-held 10 per cent stake, while the company's 30 staff collectively own 25 per cent.
Calix's total revenue in 2016-17 was $11 million once commercialisation grants and the research and development rebate was included.