Todd, Thanks for the nice analysis. Although am not in agreement with all your assumptionI I do agree with your conclusions. A couple of points worth noting, based on my conversation with Akzo:
1. The precursor material needed to make Carbon Fiber costs $1.50/lb if bought from Courtaulds, the current supplier to all CF manufacturers. 2 lbs precursor is needed to make 1 lb CF.
2. Conversion of acrylic to CF is done by heat, so there's fuel/electricity costs, plus other handling, overhead, G&A. This value added conversion costs Akzo about $4/lb -- my estimate, based on Akzo's CF selling at $10-$12/lb.
3. The acrylic coming from Zoltek's Hungarian plant is not 'precursor' grade.
Adding my two cents worth of analysis, it could be that 3+ lbs of Hungarian precursor is needed to make 1 lb CF. As, Flyguy pointed out, there are also importation fees. If so, it seems improbable that Zolt's precursor cost is less than $2 per lb of finished CF. But this still represents 50% savings compared to buying from Courtaulds. Assuming Zolt's acrylic/CF conversion cost to be 3/4 of Akzo's -- a leap of faith, IMO, then Zoltek's CF production cost would be $5/lb.
I, too, would be a buyer of this company at 50% discount from current valuation.
Regards,
Tulvio |
