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Gold/Mining/Energy : Global Thermoelectric - SOFC Fuel cells (GLE:TSE) -- Ignore unavailable to you. Want to Upgrade?

To: speculatingvalue who wrote (167)	10/16/1998 2:02:00 PM
From: speculatingvalue	Read Replies (1) \| Respond to of 6016

From today's Globe and Mail: Global fires up new products Eager to smooth out annual sales between giant contracts for its trademark generators, Global Thermoelectric has warmed the U.S. Army to its vehicle heaters. Friday, October 16, 1998 STEVEN CHASE IN CALGARY -- The U.S. Army was looking for a few good vehicle heaters -- ones that wouldn't catch fire and explode as previous models had during the Persian Gulf War. Meanwhile, Global Thermoelectric Inc. of Calgary was eager to diversify its product line beyond a narrow niche of low maintenance, gas-fired generators. It was a match made in heaven -- or hell, considering Uncle Sam's tough specifications. The army wanted a heater that could start up in 55-degree-below weather. "We're good at applications involving heat and electricity. That's what our generators are, so the idea of heaters was not difficult to come up with," Global president Jim Perry says. In a testing showdown, Global's prototype vehicle heater beat out entries from two U.S. rivals. It landed the $18-million army contract in 1996 for two-foot-long, tube-shaped heaters. Production of the vehicle heaters began last month, marking a key step in the diversification of this small, formerly one-product company. Global has been looking for ways to smooth out its annual sales between giant contracts for its trademark generators. Winner of a Canada Export Award for 1998, Global is now supplying heaters for 2,000 of the army's vehicles, including tanks and personnel carriers, with a possibility to provide up to 2,000 more. Global is hardly an overnight success story. Founded in 1975, its mainstay product has been its generator technology, adapted from models developed by the Minnesota Mining 7 Manufacturing Co. (3M) for moon landings. While the original 3M generator used radioactive isotopes for fuel on the moon, Global's version relies on natural gas. Because it has no moving parts, the device requires as little as one hour of maintenance a year. But while Global had a unique product, the company was largely run by scientists until 1993. Without a strong business orientation, it hobbled along for two decades as a mainly scientific venture, kept alive in part by research grants and later through an Alberta government ownership stake. It was only five years ago, when the government sold its stake to Edmonton venture capital firm Foundation Equity Corp., that Global began to take full commercial advantage of its technology. It went public in 1994 with a preferred share offering on the Alberta Stock Exchange. The company worked to smooth out its spotty profit record and solidify its position as the leading supplier of thermoelectric generators for remote use -- now with more than 95 per cent of the world market. Global's main customers are natural gas pipeline manufacturers that need electricity along the pipe route to power cathodic protection that keeps the metal from rusting. "Whenever anybody builds a gas pipeline . . . we are one of the only good choices," says Mr. Perry, 51, a former petroleum executive recruited last year. In fact, annual revenue has grown at the compound rate of 37 per cent over the past five years, to $16.3-million in fiscal 1998 from $3.4-million in 1993. But despite this growth, Global realized years ago it had to develop alternative sources of revenue, in addition to its large generator contracts. For example, sales in 1998 exceeded 1997 levels by 68 per cent, largely because of two major contracts -- a $3.2-million deal with India and a $1.8-million pact with China. "The market doesn't like lumpy sales and lumpy earnings," says analyst Michael Hill with Acumen Capital Partners in Calgary, who follows Global. When it came to diversification, Global had built up a rich base of research after 20 years of scientific tinkering, but nothing commercial had emerged beyond the generators. What the U.S. Army's heater contract offered Global was a chance to take some of its existing technology and adapt it. Growth has been rapid at Global this past year as production of the heaters came on line at its manufacturing facility in Bassano, Alta., 100 kilometres east of Calgary. The company has boosted its work force by more than 20 per cent to 100, including highly skilled welders who have been in great demand in Alberta's hot economy. Global's recruiting task grew easier this year as plunging oil prices cooled down a hot labour market. Meanwhile, Global is finding other markets for its generators, including telecommunication repeater stations and long-distance monitoring of oil and gas wells. Next on the diversification drawing board are solid fuel cells for higher-power applications. Global has purchased the technology from a German lab and is working to develop cells fuelled by gas that can power cell towers or cable TV systems in remote locations.