Canadian BioOil tech flows to eastern Europe
Vancouver, B.C.-based DynaMotive Energy Systems Corp. continues to move forward with its business plan. The company announced that it has licensed a large pyrolysis plant to Rika Ltd., a Latvian holding company with operations in the Ukraine. There is also an option for two additional plants of similar size.
According to DynaMotive, the “plant will be located at one of Rika’s farm operations in the Ukraine which covers 8,700 hectares of land. The farm would be capable of supporting the three plants envisaged under the licensing agreement signed.” In other words, biomass from the farm would be feedstock for DynaMotive’s BioOil process.
Interestingly, DynaMotive acknowledged that support 10 years ago from Technology Partnerships Canada (TPC), a controversial granting body tagged as a Liberal “fund for friends,” provided the early financial support that helped make such an agreement with Rika possible. TPC, in the process of being wound down, is being reincarnated as the Transformative Technologies Program — unless, of course, the new Conservative government cans it. DynaMotive also got funding support from Sustainable Development Technology Canada, a far more effective funding body.
DynaMotive had two other announcements of interest this past week: one detailing its financial performance in the first quarter — less than $1 million for a company with a market capitalization of $178 million (Yikes!); and the other an announcement that the company will establish a U.S. head office in Washington, D.C. this spring as part of aggressive efforts to push U.S. sales.
It should also be pointed out that the company has tested its BioOil product with aluminum giant Alcoa as a possible replacement for heating oil. Alcoa continues to evaluate.
For past posts on DynaMotive — and more background on its clean technology — click here, here and here.
I have to say I like this company on the surface, but with the market cap it has there are a lot of retail investors out there destined to lose some serious money when this over-the-counter stock fall back to reality. Think about it, DynaMotive’s market cap is about $45 million higher than Carmanah Technologies, a profitable company in the red-hot solar market that has 10-times the revenues.
Tyler Hamilton is editor-in-chief of Corporate Knights magazine and a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
April 1st, 2006 at 10:28 am
DYMTF- Market Cap: Company has been In R&D for the past 8+ years and this is the first revenue..watch it grow. As for the cap ? sure it is high but it should be $1 billion cap. According to the the US Dept of Energy and USDA bio oil can replace 30 % of US fossil fuel requirements. Market cap is not important at this time…look at Google…so it means nothing. Management and execution of the business plan is the important thing…watch revenues grow 100 % ++ per month.
April 1st, 2006 at 11:13 am
Everybody any his brother is going after the fossil fuel-replacement market that has been identified in the United States, Canada, and other countries. The comment, “market cap is not important at this time” is kind of silly, as is the comparison to Google, since Google is a very profitable company that pulls in billions of dollars in revenues. You’re comparing apples to oranges. Most of the companies I cover in this blog have the potential you described. DynaMotive is an interesting story, but not so unique as to justify that market cap or such investor boosterism.
April 2nd, 2006 at 8:28 pm
Your point are well taken. You are right you cannot compare DYMTF to Google..kinda stupid…then name three companies that compete with DYMTF ? I can’t find one.
April 2nd, 2006 at 9:16 pm
Can I name a publicly traded company that does exactly what DynaMotive does? No, but it’s best to view DynaMotive in the broader competitive landscape, competing against companies that have other approaches to biomass-to-energy conversion — i.e. biodiesel, ethanol, hydrogen, methane, syngas, etc… Anyway, that’s all besides the point. The debate here is about over-valuation, and DynaMotive is overvalued — until the company shows a profit and a track record of tripled digit revenue growth.