Directa Plus (DCTA), a producer and supplier of graphene nanoplatelet-based products for both consumer and industrial applications, has secured a three-year contract valued at €5.5 million with LIBERTY Galati, Romania's largest integrated steel producer via its environmental services subsidiary, Setcar S.A. The contract its largest to date, equivalent to the company's 2020 annual turnover.
Under the contract, Directa Plus will provide an innovative solution for the treatment of oily mill scale, a byproduct of steel manufacturing. Composed primarily of iron oxides, mill scale forms on the surface of the rolled steel product when heated billets, nearly reaching temperatures of 1000°C, pass through the rolling mill and come into contact with oxygen, oil, and coolant water. Approximately 2.5% of the workpiece's metal weight is converted into slag during the rolling process.
Setcar's solution employs Directa Plus' Grafysorber® to remove and recovering oil compounds from mill scale sludge that would otherwise be challenging to treat. Alongside Setcar's distinctive processing system, it enables LIBERTY Galati to convert a substantial quantity of oily sludge waste into a valuable raw material, which can be reintroduced into its steel production process.
The contract – awarded through a competitive tender process and after processing 40Mt of material over two years to prove the process – has the potential to reach €8.0 million in total, and positions Setcar to further expand its waste treatment and disposal services for industrial pollutants.
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This contract win is hugely significant for Direct Plus, not only from a financial point of view but also a demonstration of the effectiveness and commercial potential of its Grafysorber® technology, which is five times more effective at absorbing oil pollutants than competitor solutions.
By solving a key environmental concern of steel production, that positions it well to make further inroads into the industry, not least within LIBERTY whose overall operations have capacity of between 14-20Mt a year, compared to the 2.4Mt capacity at Galati. As broker Cenkos puts: “there is significant value in the company in its proven graphene production processes and downstream IP that is not reflected by the current market valuation”.
The broker expects sales to climb from €10.9m to €13.3m this year, more than halving the adjusted Ebitda loss to €1.5m, and that the group will become Ebitda positive in 2024.