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Alexium International Group To Develop New U.S. Military Uniform

Alexium International Group (ASX:AJX) has been invited to participate in a funded program to deliver an improved Flame Resistant Army Combat Uniform (FRACU) to the U.S. Department of Defense (DoD).

This is part of DoD' effort to develop an ecologically-friendly flame-retardant 50% Nylon/50% cotton (NyCo) durable combat uniform.

The company has been granted an immediate $50,000 to provide fabrics for this effort and is working with relevant parties for contracting these funds.

Alexium, the only commercial provider of a durable, ecologically-friendly flame-retardant treatment for NyCo, will be a FR technology and chemical sub-contractor to major U.S. defence industry finished product uniform suppliers shortlisted by the DoD for this FRACU program effort.

Final program contract awards are expected to begin in February 2015.

Based on historical yardage volumes, the FRACU program has an annual revenue potential for Alexium of US$10 million to US$16 million per year.

"The FRACU program is something Alexium has been targeting in our development efforts for the better part of 2 years," general manager of operations Dirk Van Hyning said.

"And the reason for that is not only the immense size of the long term opportunity but the incredible fit for Alexium ­ our ability to design chemistries, our capability in formulation work, our depth of experience in textiles and our strong connections to the defence sector."

Chief executive officer Nicholas Clark added:

"Our selection represents the culmination of a lot of hard work and planning by Alexium, to be positioned at the forefront of environmentally friendly, performance enhancing, durable and cost effective solutions to the FR industry and the US Department of Defense."

In addition to its effort on chemical supply to this "Green Initiative" in the FRACU program, Alexium is preparing a proposal to provide its own fully integrated branded FR treated "NyCo Fabric" for the DOD FRACU program.

The company is working with a number of external parties (required to be treated as commercial in confidence) on this complete ensemble project.

It is anticipated that this proposal will be submitted for evaluation by DoD and roll out in mid-2015.

Developing the new fire retardant U.S. combat uniform

Over the past year, Alexium has worked in conjunction with the DoD for their evaluation of the company's FR treated NyCo fabrics.

Based on the positive results from this testing, the two parties have worked to rapidly integrate Alexium's FR treated NyCo fabrics to be part of the FRACU program.

Its wholly-owned FR treatment is a U.S. based technology with patent protection.

Department of Defense is expected to save more than $1 billion over the life of the project through the ability to have cost effective, longer life and logistically more simple solutions.

Recent activity

Chief executive officer Nicholas Clark recently travelled to Washington, DC, to educate legislators and regulators about the innovative and environmentally friendly FR applications being developed by Alexium.

This focused on applications for its FR treatments on consumer products without the use of dangerous toxins.

Legislation recently introduced by Senator Charles Schumer (D-NY) aims to ban the top ten most toxic chemicals flame retardants, and Alexium indicated it was capable of meeting the high standards set forth in the legislation.

The trip follows on from visits to Alexium's Greer, SC, facility by Senator Lindsay Graham (R-SC) and Congressman Trey Gowdy (R-SC), both of whom saw demonstrations of Alexium's innovative products.

Analysis

The invitation to participate in a funded program to deliver an improved FR combat uniform for the U.S. military is a validation of Alexium's cost effective and environmentally friendly treatments.

It also validates the company's relationship with the U.S. military.

Adding to the interest, the FRACU program could represent annual revenue potential for the company of US$10 million to US$16 million per year from provision of its chemistry.

This adds to the recent interest from the transportation sector.

In November, it engaged two additional customers, giving it five customers in the transportation market.

These five customers could deliver potential annual sales volume of US$10 million.

Alexium has been one of the best performers on the ASX recently with shares climbing to a new 52 week high of $0.49 today, up from the low of around $0.08 in mid-2014.

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