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Steve Lentin

New Timber Microwave Processing Technology

Summary

An opportunity is now presented to participate in a unique technology developed for microwave processing of timber.

About the Business

The project offers substantial projected returns on investment.

This ground breaking technology being developed in Victoria is poised to revolutionise the manufacture of timber products and potentially add billions of dollars in value to Australia's timber industry. The technology is destined to also revolutionise the Timber, Building and Construction Industries worldwide.

This proven and unique new technology, developed over the last 10 years, applies Microwave Timber Processing to both Softwoods and Hardwoods. It not only reduces the drying time of timber from months to a matter of days, but it is also capable of changing the structure of timber to improve its strength, stability and durability.

It normally takes about one year to process a hardwood log, but microwave application cuts the processing time significantly further. Potentially, hardwood logs could be microwave processed in minutes to be followed in post kiln drying for duration of less than 30 days. The shorter time required for kiln drying also dramatically lowers energy costs.

Accelerated drying, preservation, fire proofing colouring and impregnating with Preservatives or Resins can be accommodated with the “Microwaving Process” to create a customised timber, or a “Super Timber” when compared with the original specifications of a selected species.

Timber with greatly enhanced specifications can be created from virtually worthless timber that is, in some instances, left to rot on the forest floor, or sold for low value “Wood Chips”.

Over $20million has been spent to date on the technology R&D, with substantial backing from different sectors of the timber industry and the Federal Government. The technology has been fully proven and validated over a 9 year period through the operation of its Pilot Plant.

Now considered as “World First”, this technology is protected by a number of Patents (either granted or pending). New Technology Products Applications:

Some sample applications include:

Sawn timber
* Decking
* Window and door frames
* Cladding
* Structural timber

Treated timber :

* Vineyard & other posts
* Electricity power poles
* Landscaping applications
* Fencing
* Railway sleepers
* Pallets
* External timber structures such as jetties, pergolas, playgrounds, landscaping
* Shipping container floor boards

A team of expert companies has been assembled that possess expertise in the following areas:

* Microwave Hardware and Software control
* Light Organic Solvent Preservative (L.O.S.P.) Systems and technologies
* On-line High Speed Timber (Lumber) Moisture Sensing and Detection
* Sawmill operation and Layout Designs for full Process & Production optimisation

The technology will now be commercialised through the construction of the “world first” commercial microwave timber processing facility to be built in Victoria. The new processing facility will be added to an existing sawmilling operation with a 150 year history and considered to be one of Australia’s oldest sawmilling operations in existence.

JV Commercial arrangements with the above referenced Sawmilling operation are currently being finalised. The JV Partner will contribute Land, Buildings and Services required for the establishment of the new microwave commercial facility. Long term timber resources supplies will also be guaranteed by the incoming JV partner from its existing Sawmilling operation and long term timber resource licences in place. Finished products from the microwave processing will also be sold utilising the existing substantial marketing network of the incoming JV partner.

Equity of up to 20% is now being offered to investors to provide funding in the amount of A$6.0m for the commercialisation of the technology. Equity investments ranging from $0.5m to $6.0m will be considered.

Commercialisation will involve the scale up of the Pilot Plant into a fully automated commercial processing facility.The ultimate objective is to sell turnkey Microwave plants worldwide.

This capital raising will fund the following two levels of activities:

Level 1
Establishment of Australia / NZ based processing operations including Construction of a Demonstration Plant and continuation of R&D activities for additional new products.

Level 2
International exploitation of the Intellectual property through the global sale of turn-key plants.

Indicative Revenue projections, EBIT & IRR:

Indicative Consolidated Financial Projections (For Levels 1 & 2) include:

Sales EBIT
Year 5: A$216m A$48m
Year 10: A$349m A$88m

With an ongoing projected IRR of 64% and Payback in Year 4, investors are assured of an exciting investment opportunity with a “World first” product that is protected by Worldwide Patents.

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