Responsible disposal of automotive tyres has long been a concern for environmentalists, but a clean energy solution could soon be more widely adopted with ecotech company Pearl Global (ASX: PG1) opening new business opportunities through the extension of a major contract.
Specialising in recycling of tyres, Pearl’s tyre processing applies unique thermal desorption technology to cleanly convert tyres into secondary products, including waste-to-energy opportunities. This low-emission processing which creates no hazardous byproducts is actively utilised by Aussee Road Services which uses tyre derived fuel oil and recovered carbon black (rCB) in its asphalt manufacturing, with Aussee extending their supply agreement for a further 5 years.
Most notably however, the extended agreement removes exclusivity clauses Aussee had to Pearl’s tech in Queensland and Northern New South Wales enabling new distribution opportunities for the waste-to-energy Company.
Amended pricing as part of the contract extension has not been disclosed, but over the course of the 5-year terms, Pearl can earn approximately $2.8 million however there are no minimum quantities or guaranteed revenue under the extended terms.
Forecasting new business opportunities for their processing tech which does not require chemical intervention, unlike other tyre disposal methods, Pearl is in the process of increasing capacity at its site at Stapylton, Queensland. Once complete, Pearl anticipates having the potential to supply more than 100 asphalt sites while the Company is also in discussions with customers in the mining explosives and cement industries.
For the Half-Year ending 31 December 2020, Pearl Global reported $1.53 million in revenue which represented a 40.5% increase on the previous corresponding period.
Pearl Global is Australia’s first company to be licensed to thermally treat tyres and the only entity in commercial operations. Upon completion of their processing facility, Pearl will be capable of cleanly converting approximately 2.5 million used car tyres per annum into valuable end products.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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