Feature News — 13 July 2018

HEAT RESISTANT, LIGHTWEIGHT, ZERO-WASTE EFFICIENT &  OVER 50% REDUCTION IN PRODUCTION COSTS

In the true spirit of the West Midlands’ industrial innovation heritage, Dudley-based Carbon Fibre Preforms Ltd (CFP) has just announced the development of FR10, a brand new form of carbon fibre material which has the potential to revolutionise the panel industry worldwide.

CFP is now partnering with the private investor network Growthdeck (www.growthdeck.com) and funds managed by Midven Limited to raise finance for expansion of production to meet predicted global demand from end users across the train, aeronautical and shipbuilding industries as well as oil and gas drilling sectors.

FR10 is created by a time and cost-efficient automated process known as ROCCS (see below) which carries a zero-waste profile and provides 50% reduction of labour and other costs compared to current processes. Crucially, and unlike any other form of carbon fibre, the finished panels are heat resistant to 1200 degrees centigrade for up to four hours. It is this feature, combined with FR10’s ultra-light weight, that has the potential to provide CFP with a huge demand from global markets.

Not surprisingly, CFP has already received interest from key players in sectors where currently, in order to comply with stringent fire safety regulations, the only option is to use much heavier panel products such as stainless steel.

More specifically, CFP’s managing director, Simon Price, is in ‘significant talks’ with Mayer Werft and STX, the two largest cruise ship builders in the world, and has already become a strategic partner with the Japanese giant Toray Industries, a global leader in the production of raw carbon fibre.

‘We have been developing and investing in FR10 since 2011,’ says Simon, a veteran of the plastics and carbon fibre industry (his father was the late Roy Price, a pioneer in UK plastics development). ‘We knew as soon as we heard about this process that it had tremendous value with huge potential demand. And we are really excited that after a short period establishing supply of raw materials, production methods and a demand pipeline, we are ready to launch this revolutionary product onto the global market.’

FR10 is created by a process known as Rapid Output Controllable Composite Shapes (ROCCS). This patented process takes a mixture of chopped carbon fibre, a special resin and combines it with water. This is processed in a high tower before being compressed and moulded at high temperature to cure the resin, creating the very strong, final fire-retardant material. FR10 will be available in three product lines from 2mm to 20mm in thickness.

So far, CFP has invested £5m in ROCCS and is forecasting annual turnover of £8.6m by the end of 2019 and £16.3m by 2020 with an EBITDA in excess of £9.2m. It is currently looking for an investment of £1.5m with half to be raised by Growthdeck, which is offering minimum investment units of £1,000. The other £750k has been offered by Midven via its Midlands Engine Investment Fund established by the British Business Bank.

The investment is expected to qualify for the attractive tax savings available under the Enterprise Investment Scheme (EIS), including 30% initial income tax relief. Based on a planned trade sale in 2022, investors are offered the prospect of a 26.7x money return after taking account of the income tax relief. Likely acquirers would be a trade buyer / a wide range of large manufacturers or a private equity house.

Simon Emary, of Growthdeck, commented: “As soon as I visited their West Midlands production facility I could see CFP had the potential to become a great British engineering success story. This investment will also be a first for us, co-investing with the Midven VC team who have also bought into the potential markets for CFP’s revolutionary material.”

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