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Carbonxt Kentucky Plant Completion Sets Stage for North American Growth and Market Leadership

Carbonxt Kentucky Plant Completion Sets Stage for North American Growth and Market Leadership

Carbonxt Group Limited (ASX: CG1) (“Carbonxt” or “the Company”), a US-focused Cleantech company, announced the mechanical completion of its advanced activated carbon production plant in Kentucky. This milestone marks a significant step towards expanding production capacity to meet increasing demand across North America.

Figure 1: The Kentucky Plant’s front view, showcasing its transformation into a high-capacity activated carbon production facility.

Advancing Towards Full Production

The Kentucky plant is ready to commence commissioning after the energisation of kiln circuits and control system integration. Its innovative kiln design integrates advanced temperature control and exhaust gas recycling, setting a new benchmark for sustainability and efficiency. This engineering achievement is a testament to the collaboration between Carbonxt and its joint venture partner, KCP, to establish a market-leading production facility.

Market and Strategic Impact

The activated carbon market is experiencing robust global growth, particularly in North America, due to environmental regulations and industrial needs. The U.S. EPA’s PFAS regulations have expanded the water-phase treatment market, making it approximately twice the size of the air-phase market. Activated carbon is essential in:

  • Water Treatment: Removes pollutants like PFAS and organic contaminants from municipal water supplies.
  • Industrial Air Purification: Controls emissions in power generation and industrial processes.
  • Broader Industrial Applications: Supports food processing, chemical separation, and pharmaceutical purification.

Despite increasing demand, global supply remains constrained, creating favourable market conditions for Carbonxt. The Kentucky plant is strategically positioned to address supply gaps and capitalise on this opportunity as prices for activated carbon products continue to rise.

Expanding Product Capabilities

The Kentucky plant enables Carbonxt to enter the liquid-phase activated carbon market with domestically manufactured, premium-grade products. It also addresses sustainability challenges by producing high-performance solutions with low CO2 emissions. Early production can be flexibly allocated to the spot market or integrated into existing product lines to generate immediate revenue.

Industry Leadership

The operational efficiency and innovative design of the Kentucky facility set a new standard in activated carbon production. Carbonxt’s capability to meet top quality standards solidifies its position as a leader in the North American market. The plant aligns with the Company’s sustainability commitment, offering solutions for critical environmental needs such as PFAS contamination and industrial emissions.

Customer interest in the Kentucky plant’s output remains high, with multiple sales negotiations underway. The production of samples in the March quarter will enable Carbonxt to finalise long-term off-take agreements, further strengthening its position in the market.

Expanding Contracts and Revenue Projections

On November 27th, 2024, Carbonxt Limited announced a 40% FY25 revenue boost with key contracts and the Kentucky plant nearing completion. Key contracts, including the Wisconsin Public Services Partnership (WPS) and the Reworld agreement, underscore Carbonxt’s strong market position and stable revenue streams.

Wisconsin Public Services Partnership

Carbonxt’s partnership with Wisconsin Public Services (ASX: WPS), its most significant customer, continues to thrive. A $3.6 million purchase order for the second half of FY25 highlights WPS’s commitment. This includes a binding $1.8 million order for Activated Carbon Pellets (AC Pellets) to be recognised in Q3FY25.

Earlier, WPS completed a $4.3 million contract in May 2024 on up-front payment terms. Carbonxt’s proprietary AC Pellets are used in WPS’s ReACT (regenerative activated coke technology) systems. This innovative technology removes multiple pollutants, including Nitrogen Oxides (NOx), Sulfur Oxides (SOx), and mercury (Hg), from coal-fired plants.

Reworld Contract

A new $24 million contract with Reworld began on October 1st, 2024. This four-year agreement will generate approximately $3.6 million in H2FY25. Carbonxt will supply Powered Activated Carbon (PAC) to Reworld’s U.S. thermomechanical treatment facilities, strengthening its revenue base and market reach.

Rising Demand and Market Growth

Activated carbon plays a vital role in addressing environmental challenges. Carbonxt leverages this demand by offering high-quality solutions tailored to growing market needs. PFAS regulations drive increased demand in water treatment markets, which are now double the size of air-phase markets. Global supply constraints create favourable market conditions, supporting Carbonxt’s strategy.

The Company has received significant interest in its Kentucky plant output. Multiple sales negotiations are underway, with sample production scheduled for the March quarter. These samples will help Carbonxt finalise long-term offtake agreements, enhancing its market position.

Sustainability and Environmental Commitment

The Kentucky facility aligns with Carbonxt’s commitment to sustainability and innovation. By addressing critical challenges like PFAS contamination and industrial emissions, Carbonxt sets a benchmark in environmentally responsible production. The Company’s advancements ensure high-quality products that support cleaner air and water solutions.

Investor’s Outlook

Carbonxt Group Limited has shown promising momentum with its recent 3.39% price increase in share price, reaching $0.061 (as of December 18th, 2024). With a market capitalisation of $21.90 million and 371.34 million shares outstanding, the Company is positioned in a favourable 52-week trading range of $0.052 to $0.120. The completion of the Kentucky production plant aligns with the increasing demand for high-quality activated carbon products in North America, driven by environmental regulations. As Carbonxt continues to expand its production capacity and enter new markets, the Company’s strong operational efficiency and strategic market positioning present a positive outlook for investors seeking growth opportunities in the Cleantech sector.

For more details, visit Carbonxt’s official website.

 

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