TIDMSYM
RNS Number : 0427O
Symphony Environmental Tech. PLC
15 May 2018
15 May 2018
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is considered to be in the
public domain
Trading and Operations Update
("Symphony" "Group" or the "Company")
Symphony Environmental Technologies Plc (AIM: SYM), a global
specialist in products and technologies that "make plastic
smarter", is pleased to announce an update on its current
operations and outlook.
Financial Highlights
-- Revenue (unaudited) of GBP2.67 million during the 4 months
ended 30 April 2018 up 17% against the comparable period in
2017
-- Management optimistic that post Ramadan, further increased
orders will be placed, particularly in Saudi Arabia and Pakistan,
compared with prior year
-- Media, political and commercial opportunities, mean Symphony
has taken the strategic decision to increase marketing expenditure
by approximately GBP375,000 in 2018
Market and Operational Highlights
-- d2w - oxo-biodegradable plastic. Increasing regulatory
support with 11 governments globally now having mandated that
certain plastic products contain oxo-biodegradable additives
-- Growing range of d2p products for health, hygiene, food protection and other applications
-- Collaboration agreement and strategic investment in Eranova,
a developer of bioplastic material using algae. The Board consider
bioplastics to be a complementary technology to d2w, in recognition
that governments will likely favour a suite of technologies to
address the issue of plastic leaking into the open environment. The
investment would be funded from existing resources
-- Entered into a memorandum of understanding to acquire one of Symphony's existing European distributors. Whilst there can be no guarantee that the acquisition will happen, if it did proceed it would provide Symphony with EUR2.5 million of revenues primarily into the French major retail market. This investment would also be funded from existing resources
Introduction
The Group's revenues to date have principally been derived from
d2w oxo-biodegradable plastic technology which is targeted to treat
short-life plastics which include, but are not limited to, shopping
bags, bin liners, diapers, coffee capsules, drinking straws,
agricultural and food packaging films.
However, our d2p suite of technologies are also gaining
commercial traction and the collaboration and strategic investment
in Eranova will provide another complementary technology, in the
form of bioplastics.
d2w technology - Oxo-biodegradable plastic
Protecting the environment is one of the most important everyday
issues at the present time. Affecting nearly everyone is the
leakage of plastic into the open environment which can be harmful,
as reported by programmes like Blue Planet. This is caused by
plastics that escape the normal collection systems for reuse or
recycling. Symphony's d2w oxo-biodegradable additive technology is
a non-disruptive, low cost solution (which we market as an
"insurance policy") to pre-treat plastics with a small addition of
d2w during the production process. Simply put, this drop-in
pre-treatment modifies the plastic so that if it escapes collection
for re-use, recycling, incineration or landfill, then it will
rapidly degrade in the open environment into a non-plastic
material, with similar natural properties to a leaf. The
biodegradation process will then follow, so as to recycle the
material back into nature.
Shopping bags and bread bags made with d2w technology have the
best life cycle analysis
http://www.biodeg.org/New%20LCA%20by%20Intertek%20%20-%20Final%20Report%2015.5.12(1)%20(1).pdf
and can safely be recycled http://www.biodeg.org/recycling.html
Governments
World governments are increasingly taking action to resolve the
urgent issue of plastic pollution. Some governments have banned
certain types of plastics, others have legislated for different
types of biodegradable plastics.
Eleven countries have now legislated in favour of
oxo-biodegradable plastic technology such as d2w. As previously
announced, enforcement processes are difficult to predict and are
often slow, but usually progressive.
UK government
In his Spring Statement 2018, the Chancellor of the Exchequer
launched a call for evidence on how the tax system and other
charges on single-use plastics can be used to reduce waste. The
call for evidence looks at the whole life cycle of plastic products
in order to identify what tax incentives or charges could be placed
to change behaviour.
The Government is open minded on oxo-biodegradable plastics and
has said they want to be a leading proponent of innovative
technologies for resolving the problem of plastic pollution.
Symphony continues to actively engage with and provide evidence to
MP's, Ministers and Government experts and hopes that
oxo-biodegradable technologies will form part of the suite of
effective innovative solutions which they will adopt to deal with
the plastic issue.
Europe
As reported on 14 March 2018 in our Preliminary Results, the EU
Commission has requested the European Chemicals Agency (ECHA) to
review the evidence on oxo-degradable plastics and to prepare a
report to the Commission on whether any restrictions should be
applied to this type of plastic. Our d2w plastic is not
oxo-degradable, but oxo-biodegradable, as defined by the European
Standards authority "CEN", but we are nevertheless providing
substantial evidence to ECHA. We understand one key focus of their
report will be on plastic fragments. Symphony can prove that
oxo-biodegradable treated plastics does not cause persistent
fragments but instead converts the plastic through a continuance
process much more quickly into non-plastic biodegradable materials
that naturally biodegrade in a similar way as a leaf in the open
environment on land and in the oceans.
Middle East governments
The Middle East is one of Symphony's main markets and also one
of the world's largest producer of oil and plastics. It is
therefore a natural market for d2w technology, as plastic bans
would not be considered an acceptable solution.
Many of these governments are acting to make oxo-biodegradable
technology mandatory. The approval requirements are strict, and
plastic suppliers need to prove that their products will perform in
accordance with international and local standards such as ASTM D
6954. Symphony offers free compliance testing services to all users
and manufacturers who use d2w technology, as well as other advisory
and support services.
The UAE passed legislation in 2009 that effectively required all
short-life plastics to be treated with oxo-biodegradable
technology, but enforcement has to date applied only to carrier
bags. The authorities have indicated that this will be extended to
15 more plastic products and we are hopeful that they will act on
this soon.
Saudi Arabia is one of the region's largest markets for plastics
with consumption higher than the UK and nearly 4 times greater than
the UAE. The regulations as previously reported required all
short-term plastic materials to be made with a SASO (Saudi
Standards, Metrology and Quality Organization) approved
oxo-biodegradable additive.
d2w was the first oxo-biodegradable additive to be approved in
Saudi Arabia, and sales have exceeded the UAE volumes in less than
1 year, albeit the monthly demands are variable.
The recent government information campaign, enforcement actions
together with new importation restrictions are expected to increase
d2w volumes after the Ramadan and Eid periods from July 2018.
Other governments
In Pakistan the recent Order of the Supreme Court in Sindh
Province has resulted in sales nearly doubling in the last two
months, and our distributor expects sales to continue increasing
after Ramadan albeit the volumes are still relatively small.
Africa, China, India and Latin America are markets that are looking
to address the issue of plastic pollution and our distributors are
active with our support. We expect to see positive changes and
increasing sales from the second half of this year.
Elevating the Group's profile
To capitalise on the global attention to plastics and elevate
Symphony's profile during this pivotal period, the Board has
decided it is right to increase its investment into communications
and marketing and these are budgeted at GBP375,000 higher than in
2017, with GBP225,000 of the increase expected in the first half of
this year.
Symphony's public profile has been increasing and recent events
of note include: Sky News interviews about oxo-biodegradable
technology; a short video introducing d2w oxo-biodegradable
technology was released on the Storyworks website of the BBC World
Service; Mr Bob Wigley, director, referred to oxo-biodegradable
technology at the 2018 Economic and Social Council Partnership
Forum at the United Nations headquarters in New York; a YouGov
survey showing the UK public were supportive of oxo-biodegradable
technology, and these findings were presented at a seminar in
London together with a presentation on plastic and wild-life by
environmentalist and broadcaster Chris Packham; and Michael Laurier
presented at the Commonwealth Business Forum. Chris Packham also
spoke on the BBCs One Show about how oxo-biodegradable plastic was
in his opinion, a valuable asset in the fight against plastic
litter in the open environment as it was impossible to collect it
all. The Secretary of State for the Environment, Michael Gove MP
was on the same show and replied that oxo-biodegradable technology
was potentially very exciting and confirmed that he was in dialogue
with the oxo-biodegradable industry and that his Chief Scientist
was evaluating the technology. Various other activities were held
in New York and Washington DC for Earth Day on 22 April 2018.
Going forward, Symphony are sponsors of the "Plastics Strategy
and Circular Economy Roundtable" at the European Business Summit
event in Brussels on 23 and 24 May 2018.
The European Business Summit (www.ebsummit.eu) is the leading
annual platform where business leaders, policy-makers, civil
society and academia meet together to discuss the current trends
and challenges in the EU and the world. With 200+ high-level
speakers, 50 interactive debates and unique networking
opportunities, EBS has become a landmark event in Brussels,
attracting 2000 delegates each year.
Two further high-profile events have been arranged in Mexico
City on 5 June 2018 for World Environmental Day and are being
supported by the British Embassy and some of the world's top
academics. Symphony are founding members of the OPA (The
Oxo-biodegradable Plastics Association). Their "Rethinking the
Future of Plastics" paper (which carries the endorsements of some
of the world's top plastic scientists, environmentalists and
corporates) will be made available for everyone to see. This
important document can be viewed at
http://www.symphonyenvironmental.com/rethinking-future-plastics/
Biobased plastic - new technology & opportunity
As announced on 1 May 2018, Symphony entered into a
collaboration agreement (the "Agreement"), for a strategic
investment in Eranova SAS ("Eranova") a French company developing
bio-sourced materials from algae. This first investment will give
Symphony an interest in bio-sourced materials and technology.
Biobased plastics, or bioplastics are plastics derived from
renewable biomass sources usually from agricultural products. Not
all bioplastics though are biodegradable. Common plastics, are
derived from petroleum or natural gas.
Eranova's technology, using algae, does not require arable land
or freshwater resources. Algae is a beach pollutant which can
generate starch at a significantly higher rate per hectare when
compared to potato or corn, the more traditional base materials for
the production of bioplastics. This new technology will help
businesses improve their sustainability commitments to use
non-fossil materials.
Completion of the Agreement and Symphony's investment of EUR0.5
million remains subject to due diligence and only becomes payable
when the pre-industrial development phase funding of EUR4.8 million
is fully committed. The Agreement does not pose any future funding
obligations on the Group although Symphony has the option to
increase its shareholding over the next three years to 51%.
The Agreement provides exclusivity to sell Eranova's compounds
in the Middle East and North Africa (the "Territory"), covering a
region of nearly 400 million people. It also confers non-exclusive
rights to sell the compound or finished products made in the
Territory worldwide, except in a small number of countries.
The pre-industrial development phase is expected to be completed
during the first half of 2019. If successful the development phase
of the project would be ready for commercial-scale plants to be
built.
Eranova and Symphony already have substantial interest from
customers and potential customers to buy this new biobased product
as soon as it becomes available.
The use of bioplastics can help companies meet current EU and
USA standards or help achieve their sustainability goals, and we
see significant growth potential for Symphony with Eranova
products. In addition, there are many synergies with our current
technologies, customers and markets which we believe should
maximise the potential for both companies.
d2p technology - "Designed to protect"
As previously reported, Symphony has continued to invest into a
range of speciality products that would be synergistic with its
customer base so as to expand the product-offering.
The development of the d2p range of additives and finished
products is progressing well. Having launched the world's first d2p
antimicrobial water pipe in Pakistan last year, repeat orders have
been placed, and our aim is to expand the product into other
territories in due course.
The Group has received repeat container orders for its d2p
household gloves which are now listed in many of the main retail
outlets in Italy, and the first order has been received and shipped
to the UAE. Our d2p gloves continue to be sold in Wilko stores in
the UK
Symphony is also pleased to report the first container-load sale
of d2p antimicrobial plastic gloves to a newly established
distribution outlet in the USA.
Earlier this month, Symphony held a launch in London for the
Health & Hygiene Protector range of d2p anti-microbial
examination gloves in collaboration with Health & Hygiene Ltd,
and Biomax Rubber Industries of Malaysia. The launch was attended
by representatives of the Pakistan and Malaysian High
Commissioners. The Group intend to launch further Health &
Hygiene Protector d2p treated consumer products during 2018.
In addition, trials continue within our global distribution
network for many different applications using our anti-microbial,
odour-adsober, anti-insect, flame retardants and other d2p
technologies.
All the above markets and products either separately or together
have exciting potential should they be commercially accepted.
Potential acquisition
Symphony signed an MOU with its French distributor to acquire
their business which supplies d2w additives into French-speaking
markets together with some finished products with d2w and d2p
technologies into some of Europe's largest retailers. The
distributor's unaudited revenues for the year ended 31 December
2017 were approximately EUR2.5 millilon. The Board envisage that
the transaction would be earnings enhancing and financed from
existing resources. The acquisition remains subject to satisfactory
completion of due diligence and terms of the acquisition.
Accordingly, there can be no guarantee as to the timing of the
acquisition or indeed, whether the acquisition will take place.
Summary
As described above the demand for our many different
technologies has never been better as the concerns for products
that can help to protect the environment, reduce food waste and
protect health have growing demand.
Our main products have the following benefits.
-- All products have "Drop in Technology" that is low in cost and non-disruptive
-- d2w will help eliminate plastic litter which escapes normal collection
-- d2p antimicrobial protection for water pipes, latex and plastic gloves
-- d2p products for health, hygiene, food, fire, infestation protection
-- Biobased investment will help reduce the dependence on fossil-based products
All our products,technologies, and customers have synergy with
each other and the expansion of our range of technologies will
diversify our offering and create new markets for our distribution
network. All of these product developments will continue to add
value to the businesses of our customers and potential
customers.
The Board is encouraged by all the activities reported above,
and also the positive start to trading during the year.
The Company will also provide a separate statement at today's
Annual General Meeting.
Enquiries
Symphony Environmental Technologies
Plc
Michael Laurier, CEO Tel: +44 (0)
20 8207 5900
Ian Bristow, CFO
www.symphonyenvironmental.com
Cantor Fitzgerald Europe
David Foreman/Richard Salmond Tel: +44 (0)
(Corporate Finance) 20 7894 7000
Alex Pollen (Sales)
NOTES TO EDITORS:
About Symphony Environmental Technologies plc
Symphony has developed and continues to develop, controlled-life
plastic technology which helps tackle the problem of microplastics
by turning ordinary plastic at the end of its service-life into
biodegradable materials. It is then no longer a plastic and can be
bioassimilated in the open environment in the same way as a leaf.
The technology is branded d(2) w(R) and appears as a droplet logo
on many thousands of tonnes of plastic packaging and other plastic
products around the world. In some countries, most recently Saudi
Arabia, oxo-biodegradable plastic is mandatory.
To view a short BBC World Service film introducing d2w
oxo-biodegradable (controlled-life) plastic technology please click
on one of the following links:
From within the UK-
http://www.symphonyenvironmental.com/d2w/d2w-brochure-5/
From outside of the UK -
http://www.bbc.com/storyworks/the-british-bid/symphony
In addition, Symphony has developed a range of additives,
concentrates and master-batches marketed under its d2p(R) brand,
which can be incorporated in a wide variety of plastic and
non-plastic products so as to give them protection against many
different types of bacteria, fungi, algae, and insects, and against
fire. d2p products also include odour, moisture and ethylene
adsorbers as well as other types of food-preserving technologies.
We have also launched d2p anti-microbial household gloves and are
developing a range of other d2p finished products for retail
sale.
Symphony has also developed the d(2) Detector(R), a portable
device which analyses plastics and detects counterfeit products.
This is useful to government officials tasked with enforcing
legislation, and Symphony's d(2) t tagging and tracer technology is
available for further security.
Symphony has a diverse and growing customer-base and has
established itself as an international business with 74
distributors around the world. Products made with Symphony's
plastic technologies are now available in nearly 100 countries and
in many different product applications. Symphony itself is
accredited to ISO9001 and ISO14001.
Symphony is a member of The Oxo-biodegradable Plastics
Association (www.biodeg.org) (OPA), the Society for the Chemical
Industry (UK), and the Pacific Basin Environmental Council.
Symphony is also a strategic partner of the Commonwealth business
initiative, and actively participates in the Committee work of the
British Standards Institute (BSI), the American Standards
Organisation (ASTM), the European Standards Organisation (CEN), and
the International Standards Organisation (ISO).
Further information on the Symphony Group can be found at
www.symphonyenvironmental.com and twitter @SymphonyEnv
See also Symphony on Instagram A Symphony App is available for downloading to smartphones.
This information is provided by RNS
The company news service from the London Stock Exchange
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