SGII NEWS on WAX Agreement ....
LA JOLLA, Calif., June 12 /PRNewswire/ -- SGI International, (OTC Bulletin Board: SGII). SGI International (SGII) announced today that SGII and Dussek Campbell, Inc. (Dussek Campbell) have signed an agreement through which Dussek Campbell will purchase, resell and distribute industrial wax produced at the ENCOAL Liquids From Coal (LFC) plant located near Gillette, Wyoming. The ENCOAL facility should produce about 18 million pounds of wax per year. Shipments are expected to begin in early 2001 and continue through December 31, 2007.
SGII's wax product has the potential for use in a broad range of industrial applications including manufactured fiber board (particle board and oriented strand board), fertilizer de-dusting agents, anti-corrosive coatings and fire logs. Tests performed by a major manufacturer have shown SGII's wax to have superior performance in preventing moisture absorption and swelling in manufactured fiber board applications. Testing programs will be scheduled soon in other areas of potential application.
Dussek Campbell, a subsidiary of Burmah Castrol, buys and resells the wax products of several major petroleum companies. Industry experts, including Dussek Campbell, expect that the supply of petroleum-based waxes will diminish in the near future as refiners are forced by new SAE standards to change the formulation of the lubricants that they produce. The change in lubricant formulation will result in a reduction in petroleum wax production. As the demand for SGII's wax grows, this reduction in petroleum-based wax supply offers SGII a great opportunity when production from a large-scale commercial plant becomes available.
Michael L. Rose, SGII's Chairman and CEO said: "The Dussek Campbell agreement is an important accomplishment for us. Their knowledge and experience will allow us to maximize the value of our wax product, which represents 37% of the total liquid production from ENCOAL. The wax also commands the highest sales price among our liquid products. Our projections show that the sale of the wax produced at ENCOAL, alone, will generate almost $3 million in revenue on an annual basis."
Rose further stated: "This sale, coupled with a recent analysis that shows our best economic decision will be to consume our fuel fraction at ENCOAL as a replacement for natural gas, means that all our products are now sold under long-term agreements. These agreements confirm our product revenue projections. Efforts will continue to upgrade the fuel fraction into a product valued higher than natural gas."
Richard Sass, Dussek Campbell's Executive Vice President stated: "SGI International's coal-based wax has properties that will make it appealing in several applications. Their timing is quite fortunate. They are entering a market that is characterized by increasing demand and decreasing supply."
SGII's business is developing proprietary technology to upgrade low-value carbon feedstocks (primarily low-rank coals, heavy crude oil and petroleum refinery resid) into valuable carbon fuels and products and into valuable specialty chemicals. Its corporate headquarters is in La Jolla, California. For further information please visit our web page, sgiinternational.com. |
