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North American vehicle drivers rarely worry about the quality of the gas they put in their tanks. That can’t be said about consumers in many other nations where kerosene, water, or used motor oil, for example, have been known to be added into fuel and not detected by the driver until the engine damage has already been done. This tainted fuel affects all citizens in these countries as it reduces government tax revenue which may, in turn, impact spending on social programs. Additionally, there are environmental issues these practices raise.
Tackling this problem is
Eurocontrol Technics Group (TSXV: EUO) which, through its
Global Fluids International S.A., subsidiary, has developed an innovative
molecular marking system for oil products and brands, and possesses the
only black oil (crude and fuel oil) marking system in the world.
Its Petromark™ technology embeds a molecular marker that it is invisible, impossible to imitate, as well as remove and/or alter, and binds to hydrocarbons at a parts per million level. The marker can be tested downstream with relative ease at a gas station or at any point within the distribution chain via a portable, suitcase-sized mobile detection system based on energy-dispersive X-ray fluorescence. If there are any differences between the marking level and the tested level, then it can be concluded that the fuel has been diluted by some calculable percentage. This ‘marker’ complies with engine emission and environmental regulations and has been proven as “non-damaging” to engines, mufflers and catalytic converter systems, while not affecting the performance of the vehicles.
The company estimates that the annual global losses from the illicit trade
of fuels is approximately US$100 billion to $200 billion per year. And as
fuel prices rise, this is a problem that will likely only get bigger because
the incentive to trade illicitly also rises.
“We think our growth in the future is going to come from many areas including but not limited to Africa, Europe, and Asia,” says Eurocontrol Chairman and CEO Bruce Rowlands, stressing the importance of the company’s recent signings as well as renewals of contracts in Uganda (for five years), Albania, and Tanzania (for four years).
In an interview with SmallCapPower.com Mr. Rowlands believes his company
will be competitive in bidding for some large projects this year, stating
that “there’s opportunities everywhere.” He expects to add a “number of
projects” in 2014 and there is a “variety of possibilities” as to where
those projects will be located.
Mr. Rowlands explained that between approximately 2/3’s and 3/4’s of Eurocontrol’s revenue is recurring based on the sale of the liquid chemical marker into the marking contracts.
Also important to the company’s growth prospects is the success of its
Xenemetrix and XwinSys subsidiaries. Xenemetrix designs, manufactures,
and markets Energy-Dispersive X-ray Fluorescence (EDXRF) systems and components
for a wide range of industries and applications. Xenemetrixis currently
refining a new technology, Petro-Marine, an XRF system for onboard
monitoring of fuels and lubricants for marine vessels which utilizes
X-Ray Florescence to detect sulfur in diesel fuel to provide compliance
with new international regulations for sulfur oxides in diesel fuel. The
market for Petro-Marine is estimated by Eurocontrol to be US$1.6 billion.
XwinSys, meanwhile, is a start-up company with a goal to be a leading designer, manufacturer and marketer of EDXRF combined with Vision (2D + 3D image processing) for the semiconductors industry. The 2D and 3D imaging will be used for surface scanning of wafers and electronic boards used in semiconductors, while the EDXRF technology will be used for elemental analysis of the materials that comprise the wafers and electronic boards.
On the cash-flow side, Mr. Rowlands said the breakeven mark for his company
is about $6 million per year and he expects that the annualized revenue
run rate of the business will be “well beyond $10 million by the end of
2014.” The contracts that Eurocontrol are pursuing have a value of between
$2 million and $20 million in terms of the impact on the recurring revenue.
Mr. Rowlands emphasized that he is building his company based on the outcome around authentication, verification, and certification for its energy security technologies and, to that end, is constantly searching for new companies to acquire in Israel and elsewhere.
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Eurocontrol Technics Group
HERE.
To learn more about Eurocontrol Technics Group Inc., you can view their initiation research report, research bulletins, analyst commentaries and CEO video interview on their SmallCapPower.com Investor Hub: HERE.
For additional information contact:
VikasRanjan, Managing Director
Email:
vikas@ubikacorp.com
Ubika Research has received compensation from Eurocontrol to provide analyst
research coverage.
