The vaunted New York Time’s Science section recently featured an article on concrete, of all things. You’d be right not to associate the concrete industry with innovation. http://www.nytimes.com/2009/03/31/science/earth/31conc.html?scp=2&sq=cement&st=cse
In fact, the basic process and materials used to make concrete have barely changed over the last two centuries, and therein lays the problem. But examples of greener approaches abound, including one from a San Jose startup named Calera that has become a source of controversy for claims that its concrete will absorb ambient CO2. BusinessWeek captures the scientific version of a cat fight here. http://www.businessweek.com/investing/green_business/archives/2009/03/climate_change_2.html
Twice as much concrete is used around the world than the total of all other building materials, including wood, steel, plastic and aluminum. The industry reaped huge benefits from the industrialization of emerging economies over the last 2 decades. However, with that growth came increased awareness and criticism of the industry’s large carbon footprint – 5 percent of annual CO2 emissions worldwide are attributed to its production. World demand for cement and concrete additives will rise 6.0 percent per year to $16.2 billion in 2012. Gains will be driven by increased penetration of chemical and fiber additives in concrete construction, and the use of mineral additives as cement supplements will be driven by environmental concerns, as well as an increased supply of cement byproducts from growing coal consumption and iron production. http://www.reuters.com/article/pressRelease/idUS156638+14-Jan-2009+BW20090114
Fly ash has been touted as a green additive because it is composed of the residue from burning coal used by power plants, and thus its CO2 emissions have been already been accounted for by the electricity plants. Its image took a hit this past December when a billion gallons of sludge spilled in rural Tennessee, but research has backed the product for use in concrete, carpet and and an even bigger opportunity than these ….. bowling balls. http://finance.yahoo.com/news/ND-researcher-Coal-ash-can-be-apf-14020904.html.
Several upstarts are making claims that their particular blend of fly ash heavy concrete mix is the industry leader, including Beverly Hills-based Icrete. Its product has been used in several of New York’s new skyscrapers. South Jordan Utah-based Headwaters (NYSE:HW), www.hdwtrs.com, is the largest marketer of fly ash, among other energy efficiency projects. It trades at $3.50 with a low/high of $1.22/$16.40. If the bowling ball market takes off as many predict then the sky is the limit! More seriously, the company has many conservation projects for industrial energy use that may be worth looking at.
KHD Humboldt (NYSE:KHD)*, www.khdhumboldt.com, based in Hong Kong, is a world leader in supplying proprietary technologies, equipment and engineering/design services for cement production. The 153-year- old firm has been a pioneer in developing technology that reduces the energy needed to heat and cool the cement mix. Its PYROFLOOR®- clinker cooling technology is widely recognized as a landmark breakthrough within the industry. The stock trades at $7.90, near its 52 week low of $6.50 and down from a $35.79 high. The Company recently announced some restructuring measures to meet the likely temporary slowdown in global infrastructure growth.
Reno, NV –based Ormat Technologies (NYSE:ORA), www.ormat.com, builds geothermal energy plants but was selected as a Top 20 sustainable business by Progressive Investor for services that recover waste heat from cement production. With a market cap at $1.3 Billion, it falls just over the $1 Billion mark that traditionally defines small cap but could be worth a look. The stock stands at $27.50, within range of its 52 week low of $21.83 and down from its $57.69 high.
Synthetic materials developer Exousia Advanced Materials (EXOU.OB) www.exousia.com, of Sugar Land, TX markets an additive called VISTAMER®, that is made from a powder of recycled tires that strengthens concrete, plastics and other materials. The Company claims it ensures less peeling and rusting, and better protects surface coatings and substrates. Its CEO claimed in a recent release, “As America girds itself for massive infrastructure refurbishment, the cost-saving and environmental implications of Exousia’s material solutions are especially profound.” The stock, at $15.4 Million, is a true microcap but has a respectable trading volume of 61,000. It currently trades 1/3 from its high of .99, up from a 52 week low of .17.
* client of the publisher of this blog.