(MENAFN - ProactiveInvestors - Australia) Alexium International Group (ASX: AJX, AX: AJX, OTC QX: AXXIY) has developed its novel, non-halogenated Flame Retardant (FR) chemistry for nylon so it can be applied with a standard "oven" as well as the company's microwave technology.
The ability to use traditional heat curing methods significantly lowers entry barriers to key markets and will speed up market introduction.
Alexium is currently working with commercial partners regarding high volume production, with licensing partner Duro Textiles expecting to begin production by the end of the first quarter of 2013.
While the original FR nylon chemistry was applied via microwave curing methods, developments over the last six months have led to formulations that can also be applied with a conventional heat curing oven.
Equipment of this type is available in nearly every fabric finishing facility in the world.
Alexium's advancement is anticipated to speed up the transition cycle, providing nearly instant production capabilities at typical production speeds.
Dr Bob Brookins, chief technology officer, commented: "While Alexium has generally used microwave chemistry to develop novel products, we identified the opportunity and the benefit for adapting our FR chemistry for a traditional thermal cure.
"For other applications, such as the treatment of heat sensitive polyolefins, the microwave technology is integral and irreplaceable.
"With our FR technology, microwave and traditional heat curing methods are equivalent, which we believe will facilitate how customers adopt it."
Key contracts
Alexium recently clinched its first exclusive licence agreement with Duro Textiles, one of the largest distributors of textile products in the U.S. and part of the 7 billion Patriarch Group.
Under the agreement, Alexium will receive upfront and milestone payments and royalties for sales of nylon treated in the company's environmentally friendly flame retardant chemistry in North America by Duro.
Duro is targeting the current 4 million linear yard nylon market in North America for commercial and defense industry applications.
The deal is expected to deliver strong earnings for Alexium.
Stefan Susta, chief operating officer, said: "We are currently resolving a number of common scale-up, process and engineering issues.
"This work is progressing well and Duro Textiles is aiming to have production capacity established in the U.S. spring of 2013 (end of first quarter of 2013).
"We are currently optimising our FR chemistry to a range of different nylon fabrics and planning for a number of scale-up and initial production trials."
Alexium is also currently in discussions with potential partners in other global territories.
Analysis
This major advancement is significant in that it opens up the market potential for fabrics treated with Alexium's Flame Retardant treatment.
The company is seeing increased revenues from commercial relationships related to the commercial roll out of its novel fire retardant nylon treatment.
These increased revenues underline the strength of the company's Reactive Surface Technology, which has attracted licensing deals with companies the calibre of Duro Textiles, one of the largest distributors of textile products in the U.S. and part of the 7B Patriarch Group.
The ability to use traditional heat curing methods, such as a standard "oven" " found in nearly every fabric finishing facility in the world, significantly lowers entry barriers to key markets and will speed up market introduction.
Alexium is already working with commercial partners regarding high volume production.
The recent pullback in share price provides an ideal opportunity for investors to buy into a company with major market potential.
