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Non-Tech : ZOLT
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To: Tulvio Durand who wrote (52)11/20/1996 6:49:00 PM
From: flyguy   of 970
 
To all: Print out a copy of Message 52 and put it in a safe place.

It will be very useful to those of you who are holding shares come 1998.

Some comments
1) The 3.5 million pounds is a misleading number, it includes a substantial amount of oxidized PAN for carbon/carbon brakes. This is not carbon fiber, but an intermediate product between the PAN precursor and carbon fiber. The revenues and margins for oxidized PAN are substantially lower than those of fully carbonized fiber. My guess would be that their actual output of carbon fiber is around 1 million pounds (this fits other 10Q data regarding the size of the newly planned lines).

2) Five new lines in 1997 times 1 million pounds per line equals 5 million pounds of additional carbon fiber. Where are the customers for all of this?

3) I would call Akzo and ask their opinion on who is the largest "large tow" supplier.

4) They better create new markets if they expect to sell 5+ million pounds per year by mid next year. I have not seen anything published on a single new application to be starting production in 1997. New automotive applications will take several years for qualification and will be in the form of new molding compounds or prepregs - ZOLT will have to team with a Hexcel, Dupont, Fiberite or someone to penetrate. The fiber alone can't make a part, you have to add resin somehow.

5) I believe that Akzo uses the exact same technology. I could be wrong, ask Akzo.

If you believe Zolt Rumy (17 million pounds of carbon fiber by 1998 or 70% of today's entire market), buy all the stock you can - this stock would be worth huge multiples of its current price. For me, I'll hold Message 52 and compare it with reality next year.

Good luck.
Flyguy.
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