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Dynetek Industries
Ltd. (DNK) |
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CEOCFO Current
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Dynetek Industries has moved beyond a simple
R&D facility and has begun manufacturing and selling their light-weight
cylinders in Canada and Europe, while working on projects for several OEMs
Industrial Products
Robb Thompson
Dynetek Industries Ltd. (DNK - TSX) is a leading international company
engaged in the design, production and marketing of Advanced Lightweight Fuel
Storage Systems, fueling systems and high pressure components including
valves and regulators. The key component of the storage system is the
DyneCell cylinder, capable of storing high pressures gases including
compressed natural gas (CNG), hydrogen, and various industrial gases.
Dynetek’s DyneCell® cylinder and fuel storage systems applications include
the transportation industry, including passenger automobiles, light and
heavy-duty trucks, transit and school buses, the bulk hauling of compressed
gases and stationary storage or ground storage refueling applications. The
DyneCell cylinder is a lightweight composite cylinder designed for the
storage of compressed gases such as hydrogen and natural gas. It is built
from a seamless 'thin wall' aluminum liner with a full carbon fiber overwrap.
The liner technology guarantees ultra light weights, high storage capacities
and non-permeability while the corrosion resistant overwrap maximizes
strength-to-weight ratios and operation performance under the harshest of
automotive environments. The high performance design materials selected for
the lightweight fuel cylinder reduces the weight of the cylinder by two- to-
fourfold over conventional designs without compromising structural integrity
and quality. Selling worldwide to major automotive, commercial and transit
manufacturers, the DyneCell is the most preferred lightweight composite
cylinder on the market. “What we build is storage
systems,” explains Mr. Robb Thompson,
President and CEO of Dynetek Industries Ltd., “and
the storage systems begin with the tank. The tank is an aluminum and carbon
fiber light-weight cylinder that we build right here in our facility and in
Europe.
It is everyday aluminum; we buy it at Alcoa Inc. in the United States. On a
global basis, this business is very regulated and subject to certification
in every country. The point to be made is that it is not something you can
build in your garage and sell it the next day. It takes anywhere from twelve
to twenty-four months to gain these certifications so you can actually begin
to sell these products in the market place. We see ourselves and our product
as a market leader for light-weight containers, which is really due to our
proprietary process to thin the wall of our liner. The lighter wall means
thinner application, so in some cases we can use three cylinders where our
competitors use four or five, which is more costly and more weight. That is
the value proposition that we provide to our customers.”
Responding to our query about reaching potential customers,
Mr. Thompson states,
“Usually, you are trying to displace something and in most cases, it is
steel. From a technical point-of-view, we never have a problem getting by
the engineers and the technical side; it is when you get to the purchasing
side and they see that our product may be a little more expensive than the
steel. Then you have to explain to them about the savings on operating
costs, and reduced maintenance and repairs, basically the value
proposition. We have our customers and they become repeat customers. We get
referrals, and when you deal with buses and trucks that need six or seven of
these cylinders on their roof; right away steel cannot compete because they
cannot deal with the weight of that on their roof. That is when those
markets open up to us.” Mr. Thompson addresses potential investors
and what the should realize about Dynetek, “What
people need to understand is that we already design, manufacture and
commercially sell into the market place, so we are not an R&D company. We
have an R&D side, but we are a commercial manufacturing facility here and in
Europe, and we sell into a very significant market place. When you look at
the competitors that we compare to, our burn rate in terms of our cash out
the door is not near what these other people are doing. We may lose $2-3
million on an average basis, where these other people are losing $15-20
million on a quarterly basis. From that perspective, I think we have our
costs under control and we are financially responsible. We have global
production facilities in Europe and Canada. We do not rely on government
incentives to keep our business going. People often make an analogy that
alternative energy is driven by government incentives and to a degree that
is true in terms of funding and you have seen that with Bush’s announcements
and other things that are going on right now. We also look at market places
where the price of gas is about three times more expensive than the price of
natural gas. Places like South America are very good markets, and we look at
these prices and that is where we try to sell our products. We have very
good respected strategic partners in Ford, Mitsubishi, and Kokan Drum Co. We
are not just going to last a year or two; this is a business that is going
to grow and we are going to grow to the point of being profitable by 2004.”
As the manufacturer and developer of the DyneCell® cylinders, Dynetek
Industries Ltd. was incorporated in 1991 by a group of private investors.
The Company invested four years of intensive research and development on
fuel storage cylinders and introduced the DyneCell cylinder to the market in
1995. After a successful market introduction, it was imperative that Dynetek
expand its production facility to meet the demands of the growing market. In
September of 1999, Dynetek moved into its new state-of-the-art production
facility in Calgary, Alberta, Canada. In February 2001, Dynetek incorporated
a wholly owned subsidiary, Dynetek Europe GmbH. Located near Dusseldorf,
Germany, the production facility will support the marketing, sales and
manufacture of Dynetek’s cylinders and fuel storage systems for the
European, United Kingdom and Middle Eastern markets. Today thousands of
Dynetek’s products are in use in over 20 different countries around the
world. |
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