Green Rubber to raise funds for rapid expansion

Kuala Lumpur - Green Rubber is preparing to raise up to $25 million

through some kind of financial vehicle. The cash will be used to fund a

very rapid expansion of capacity to serve new markets for the company's

de-vulcanised rubber products.

Datuk Vinod Sekhar told ERJK that

the company intends to open factories as either wholly-owned operations

or as joint ventures in the US, South Africa, Guatemala, Canada and

probably the middle East in the coming 12 months.

This would take the company's capacity from around 2000 tonnes of material per year to over 150 ktonnes.

Sekhar

said there is currently very strong demand for the company's products -

far more than the current facilities in Malaysia can produce. He said

that roughly 1200 tonnes per month -- over half the company's total

capacity -- is going into retreaded tyres. Sekhar declined to say which

company was using the material, but said it was a single company based

in South Africa.

The company, he said, had ordered some material

and tried to use it in its retread compounds. Remarkably, with no

optimisation and little technical input, the results were almost good

enough for use on commercial products.

Green Rubber is now working hard with the company to optimise the compound and then to gain homologation for wide spread use.
If

the material is homologated, said Sekhar, then demand from that market

wil take off very quickly. This would be in addition to any markets in

the shoe sector or the general rubber goods sector.

This is the reason for the new tranche of fund raising and pushing forward a substantial capacity expansion.

Of

the $25 milion or so, Sekhar said the company would commit $2 million

over 18 months to R&D to recruit more technologists who would

manage the capacity expansion and  further develop the process.