Dr. John L. Faessel
ON THE MARKET
Commentary and Insights
A POTENTIAL 10 BAGGER
Added to my Best 2012 Idea List
GlyEco, Inc. (OTCPK:GLYE) OTCBB
Renowned industry professional John Lorenz* has started a new venture aimed at the $25 billion glycol market. The company transforms waste "feedstock" glycols into "virgin" quality glycol which can be sold for at least as much as refinery produced glycol. Profitability looks to be enormous. Opportunity knocks for ground floor participation!
My counsel is to keep this story front and center on your screen and track the news flow carefully. Management experience, breakthrough technology, market size where intrinsic demand and built-in supply is of staggering proportions, plus high estimates of EBIT make this a picture of planets in alignment that happens only rarely.
Key items to grasp
· * Lorenz* founded Environmental Waste of America, Inc. the company which, through a series of mergers and acquisitions, morphed into Waste Management, (NYSE:WM) - market-cap $16 billion NYSE. Startlingly the business went from $2 million in revenues to $14 billion in 7-years.
· Glycol sales are estimated to have topped $25 billion globally in 2011.
· Glycols are a liquid chemical used to produce plastic containers, polyester fibers, antifreeze, an airplane deicer and many other applications.
· There is an estimated 700 million gallons of waste glycol "feedstock" which could be recycled each year in the USA alone.
· Demand for high quality recycled glycol product that meets ASTM standards far exceeds supply in every market segment.
· For the first time, the waste created by these five industries can be recycled to "re"- produce refinery grade glycols.
· The patent pending (OTCPK:GLYE) Recycling process is the only technology that can process and clean all five types of hazardous waste glycols to meet or exceed ASTM standards. The company is in the process of acquiring / wrapping-up processing facilities.
· Last month (OTCPK:GLYE) signed an asset purchase agreement to acquire certain assets of Recycool, Inc.
· This purchase marks the beginning implementation of GlyEco's strategy for rapid growth through the acquisition of existing profitable recyclers. The acquired facilities will be upgraded with patent-pending GlyEco Technology™ improving production capacity, product quality and profitability.
· The company has already identified potential customers and developmental partners in North America and Europe, throughout Asia, Mexico, South America, India and Australia.
· (OTCPK:GLYE)'s management team is seasoned in the operational details of big footprint commercial applications. The team is packed with experts in solid waste management, mergers and acquisitions, chemical engineering, and glycol recycling.
· Furthermore, the EPA requires most federal agencies to buy antifreeze with the highest recycled content level practical. Most agencies report a lack of supply to meet their demand.
Here's a snapshot of the global market. World-wide consumption of refinery produced ethylene glycol is over 5 billion gallons per year. China is the big player, consuming more than 2.1 billion gallons of glycol each year to fuel their polyester fiber manufacturing industry. Big picture demand continues to exceed supply with exponential growth predicted. The sales average price of ethylene glycol in 2011 was approximately $5.69 per gallon, with a 7-year average sales price of about $4.57 per gallon.
With the above mentioned immensely successful Waste Management roll-up as a model, I believe that we will soon see (OTCPK:GLYE) complete additional and numerous acquisitions along the lines of the just announced Recycool deal. Revenues and profits look to expand exponentially as the acquired assets upgrade to the GlyEco Technology™.
I'll have more on this exceptional opportunity in further reports.
For my Best Ideas for 2012 please send request to: Dr.Faessel@onthemar.com