© 2023 Wolfersdorff Consulting Berlin
Dear colleagues & friends of recovered carbon black,
Here is your monthly dose of recovered carbon black news. We now have 5.776 subscribers to the rCB News, thank you for your interest!
I want to make this newsletter about one topic only. The inspiration for this newsletter series is to provide you, dear reader, additional value and opinion, rather than just copying/pasting news items from company press releases.
Let's talk about:
"The fragility of the rCB industry"
You might ask "fragility, what do you mean Martin"?
Well, maybe you have read the European Rubber Journal or the Rubber News Journal quoting me saying "recovered Carbon Black needs more industry support".
Knowing the recovered carbon black industry in and out, I know that even the perceived super stars don't have it easy with their scale-up projects. Not to speak about the others who publish less or who do not have the prestigious collaborations. Their situation is of course worse.
While the tire industry could not be clearer about their requirements for tire sustainability (well, it even made the arch rivals Michelin and Bridgestone collaborate!), I find that the level of investment from tire and also carbon black corporations could be much more intense.
What is a 3m€ investment for Michelin, a corporation with some 29b€ turnover? For Enviro the investment and the collaboration surely means the world, although 3m€ are quickly spent for a dynamic start-up as Enviro.
The trouble is that recovered carbon black technology companies without an industrial operation have more cash-burn than cash-flow. Planning and developing are costly activities. A pre-engineering study required for EPA, BImSCH or other permits costs easily 1m€.
When we see companies getting asset investment partners with 100+m€ investment, it could still be that these companies actually are cash dry. They need more equity investment.
This week, two analysts posted a downgrading for Pyrum Innovations due to a correction of the 2023 revenue forecast by -72% compared to 2022 which had a growth rate of 486%.
Simply Wall St - OB:PYRUM Earnings and Revenue Growth April 7th 2023
Really, in what kind of crazy analyst circus are we?
Are these analysts held ransom by the numbers?
"The foundation of every business is risk" (Peter Drucker). And yet, investors and banks do not want to take any risk for their profit, which leads analysts to overanalyse and start-ups to exaggerate their prospects with quite unsolid figures. How meaningful is that?
We are talking about start-up companies working hard in a challenging multi-disciplinary environment managing funding, technology develoment, permitting, regulations, collaborations and marketing.
In the case of Pyrum Innovations, we talk about a young genius, Pascal Klein, who has built something very impressive and whose collaborations are simply amazing. Is it foolproof? Hell, no. We are talking about a nascient industry.
Bolder Industries lays off 25% of their staff at their Maryville plant in a "right sizing activity".
Other superstar companies have similar challenges. They are definitely not as strong as their marketing would make you believe.
In addition, the current economical and political situation is also challenging. Inflation, recession, volatility and wars put companies in emergency mode and into more conservative decision making.
I can feel it too. Consulting collaborations this year are definitely more scarce than in the previous years. I am still smiling into the camera, but it hurts as both corporations and start-ups hold back their consulting budgets this year.
What can we do to get the recovered carbon black industry more solid and to support the growth and availability of circular and sustainable materials?
As always, finding the right partners is the most important for any business. It is all about the people and collaborations. Nobody can do it alone.
Technology companies without regular cash-flows from operations need a lot of money just to survive, to pay their staff and to build their business. These companies need more equity investments that those published.
If investors and analysts want to support sustainability and the circular economy, they need to understand the industry better and they need to review their risk policies.
Thanks for reading this far! If you want to show me some business love and appreciation (or if you want to learn about recovered carbon black), you can sign up for my paid webinar "recovered Carbon Black in Rubber - State of the Art".
I am also open to new consulting projects. Contact me if you want to work with me!
Happy Easter / Passover / Springbreak / holiday & peace wherever you are!
Best wishes from Berlin,
Martin
Prospects for recovered Carbon Black 2023
Wolfersdorff Consulting Berlin
#circulareconomy #recoveredcarbonblack #carbonblack #pyrolysis #sustainability
