Virotec International Ld
29 November 2004
Chairman's Report to Shareholders
2004 Annual General meeting
It is my pleasure to deliver the Chairman's overview.
I'd like to start by thanking the shareholders for supporting the company. I
believe we are having an outstanding year and I am very proud to be associated
In this address, I want to highlight some of our more recent achievements and
explain in greater detail just what these mean to the company. The key
•The successful HydroDec spin-off
•New product classification for BauxsolTM products
•US EPA endorsement at Gilt Edge mine in USA
•Sustained organic growth
•Continued expansion of Virotec's platform technology base
The Sale of the HydrodecTM Technology
As announced last week this sale is now only subject to the approval of the
shareholders of the purchaser, Vert-eco Group plc, which is expected to be
received on 20 December 2004.
This transaction signifies the first major demonstration of Virotec's corporate
objectives as outlined to shareholders in 2002. It is a practical application of
Virotec's business strategy to spin off selected technological businesses within
Based on this transaction alone, we have boosted Virotec's immediate cash
reserves by approximately $2.4M and we expect that Virotec will report a
substantial profit in the 2005 year. Furthermore, we have retained a substantial
equity position in the new publicly listed company, which will be solely
focussed on actively advancing the HydroDec business.
Product Classification for BauxsolTM Products
Virotec has recently achieved regulatory classification of our BauxsolTM range
of reagents, as approved commercial chemicals from the UK Environment Agency
(which has application for all countries within European Union) and from the
United States Environment Protection Agency.
This is a significant breakthrough for the company, as these approvals recognise
that Virotec's Basecon process converts an alumina refinery waste (red mud) into
certified product, BauxsolTM, which then forms the basis of our patent protected
These long awaited product classifications meet important regulatory criteria
for Virotec to expand its business operations throughout the Northern
Hemisphere. The approvals also have widespread implications for the alumina
industry and the reuse of the world's largest industrial waste.
Release of USEPA Results of 3 year's testing
This year we reported on the culmination of three years extensive independent
testing of BauxsolTM products, specifically the ViroMineTM reagents, at the Gilt
Edge mine site, in South Dakota and the US EPA's public release of the results
which showed Virotec's unprecedented success in the field. I believe the letter
from the US EPA was a glowing endorsement of our technology. We believe it will
lead to our inclusion in the final feasibility study now being prepared for the
Gilt Edge mine, a superfund site. It is has also generated more interest from
what is potentially the world's largest mine site remediation market.
Just two weeks ago the US EPA Region 1 engaged Virotec to commence work at the
Elizabeth mine in Vermont. Although this is a small contract at this stage, it
is further proof from the large regulatory authority of their growing interest
in our ViroMineTM products. It is important that our shareholders recognise the
significance of ViroMineTM reagents' performance in the field at Gilt Edge.
The US EPA estimates that 64% of all superfund sites have metal contaminated
soil, or groundwater, or both. Yet there is still no accepted, economically
viable method to treat metal contaminated soil. Excavating and isolating
metal-contaminated material, in lined or capped impoundments is not considered a
permanent solution because all caps and linings will eventually fail.
We believe the only practical long-term solution is to bind the metals in such a
way that they cannot be leached from the contaminated soil. This is the real
breakthrough of BauxsolTM technology. At the Gilt Edge mine site, ViroMine
protective barriers are not only preventing metals from leaching out of the
soil, they are actually improving with age. After three years the results from
the application of ViroMineTM reagents are getting better.
Sustained Organic Growth
Our BauxsolTM technology range of environmental solutions is gaining momentum in
the marketplace and this is reflected in increased revenues:-
•57% increase in average monthly revenues for the 2005 financial year to
date over the year ended 30 June 2004;
•144% increase in average monthly sales for the 2004 financial year over
the year ended 30 June 2003
Expansion of Virotec's Technology Base
The platform nature of Virotec's Technology is extensive and in the last 12
months the Virotec scientists have continued to expand the product range of the
BauxsolTM Technology, as well as successfully develop and test new applications.
The main additions to our technology base in the last year include:
• ViroConcrete - A Specialist Concrete and Composite Material. A new
concrete material has been developed utilising our BauxsolTM Technology.
These new materials are very strong, have a high resistance to attack by
sulphuric acid, a good resistance to corrosion by other acids, caustic
liquids and salt water, and an ability to trap and bind a wide range of
• Regional Waste Treatment Centres - Due to the expertise acquired by
Virotec in its acquisition of the EPT business, the Company has developed
the concept of utilising waste treatment systems for the regional treatment
of wastes. The development of a business model for this concept is well
Thank you for your attendance at the meeting today.
Virotec International Ltd
PO Box 188
Sanctuary Cove QLD 4212
This information is provided by RNS
The company news service from the London Stock Exchange