S-3 report contains treasure trove of facts I was looking for, and couldn't get for not being able to ask the right questions. After seeing your post I called Akzo, and got a better feel for the competition. This is what I learned from Azco by telecon:
(1) Akzo claims itself to be world's largest producer of large-tow carbon fiber (CF) with production of 5 million pounds per year. It has world's first fully operational fully-carbonized production line that yields 3 million pounds CF per year. It expects to produce 10 million pounds CF in 1998.
(2) Akzo sell its CF for $10-$12/lb, and sees ample market at this price. It estimates world market for this CF at 28 million lbs. per year, and growing. Sees growth in civil engineering projects for retrofitting concrete columns in freeways, bridges, and car parking structures to meet earthquake standards. About 500 lb CF is required for jacketing each column. About 20,000 highway-supporting columns need this retofitting, plus about 100-times this nunber for parking structures.
(3) Akzo claims that Zoltek's CF is not fully carbonized, and thus by requiring customers to perform additional carbonization, is (posssibly) able to sell their product at lower rates than Akzo.
(4) Zoltek's CF production numbers are suspect. Their 200% Q-Q earnings growth does appear largely attributable to acrylic product from Hungary.
So --- I rehashed in my mind the numbers from your posts and my post #52 plus the competitive situation with Akzo described above, and conclude that there's good probability that Zolt's earnings are going to be flat for next two quarters -- as Zolt's CF product from new lines will not start showing til Q3, at earliest. Market's reaction might indeed be harsh, as you predict.
But I do believe Zoltek and Akzo both have a great and exciting future in CF. CF is a new building material, and am convinced it will take its place alongside, steel. aluminum, and concrete. Zoltek will be a great buying opportunity in six to nine months, IMO. Akzo's CF operation unfortunately is imbedded in large Co. infrastructure ($12 Billions/yr) and thus will not see the same growth as Zoltek, IMO.
Flyguy, I greatly appreciate your data and analyses.
Sincerely,
Tulvio
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