Suvo doubles major Chinese kaolin offtake | Australian Markets

Suvo Strategic Minerals has locked away a game-changing five-year renewal of its key hydrous kaolin offtake settlement with Chaozhou Chengcheng Industrial Co, doubling gross sales to the Chinese language industrial powerhouse.

The take-or-pay settlement, valued at $6.56 million earlier than supply prices, has elevated volumes from 4275 tonnes of the company’s hydrous kaolin within the earlier three-year settlement to 8750t beneath the new deal.

The industrial phrases stay unchanged and set the stage for main manufacturing growth at Suvo’s Pittong kaolin operations in Victoria.

Chaozhou Chengcheng is a Chinese language distributor of Suvo’s merchandise and one of the company’s largest shoppers. The elevated demand has come from an improved advertising and understanding of Suvo’s high-quality merchandise in China.

The increase in demand from one of our main prospects simply final month and now one other constructive step ahead with this settlement, we anticipate vital growth in gross sales volumes in 2025.

The refreshed contract has come sizzling on the heels of a three-year extension to a different offtake settlement – together with a 30 per cent quantity increase to 24,000t – with Norwegian paper and pulp main Norske Skog, one other vital Suvo consumer.

Norske is a main producer of publication paper, together with newsprint and magazine paper, packaging and with mills throughout Europe and Australia.

With the company having not too long ago accomplished an improve to its Pittong plant, now succesful of handling 60,000t a yr, the enlarged orders from current shoppers have come at a useful second for Suvo.

The ability is at present working at 50pc capability at about 30,000t every year so any increase in manufacturing goes to play into Suvo’s fingers as economies of gross sales begin to kick in.

The amount growth may even enable the company to spend more on excavating its high-grade product, thereby decreasing the need for affordable, decrease high quality kaolin clay within the last combine.

High quality hydrous kaolin is a key ingredient in manufacturing industries reminiscent of paper, coatings, rubber, prescription drugs and high-tech ceramics and is in high demand.

Suvo produces 4 separate merchandise to fulfill particular buyer wants delivered as moisture lump, high solids slurry, moisture powder or moisture pulverised powder.

The solids slurry is utilized in paper and board manufacturing, whereas the opposite merchandise are utilized in paper, coatings, paint and specialist industries, together with rubber and pharmaceutical purposes.

The growing world demand for specialty minerals, coupled with Suvo’s capability to scale manufacturing at its Pittong mine, highlights the strategic significance of this deal.

With the elevated need for ever more specialised finish merchandise, management says the company can also be engaged on different product development alternatives to help grow the gross sales.

Along with strengthening its kaolin provide agreements, Suvo can also be pushing on with plans for a cutting-edge, low carbon geopolymer concrete product.

The company holds an unique licence from Murdoch College which permits the manufacturing of high-performance, low-carbon concrete – an various to standard odd Portland cement to create a lower-carbon various.

The extension of this main offtake settlement, the second such deal in a month, appears to recommend that Suvo is beginning to construct model recognition within the market for its merchandise.

With an operational EBITDA of $0.51m within the December quarter and accelerating gross sales growth prone to flip to greater earnings – because the onerous graft of advertising begins to repay – Suvo seems to be on the cusp of a company-defining yr.

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