Polish 'ash-to-cash' company looks for U.S. partner

Thu Apr 10, 2014 11:11am EDT

* Eko Export's share price up over 40 times since 2009

* Sees benefits from potential partnership

* Gets most raw material supplies from Russia, Kazakhstan

By Marcin Goettig

WARSAW, April 10 (Reuters) - A Polish company that turns waste ash from coal-fired plants into a valuable raw material is on the hunt for a U.S. investor to help it expand, although Russia's stand-off with Ukraine may deter potential partners for now.

Eko Export processes so-called fly ash microspheres found in coal ashes for use in special cements for oil and gas drilling, spaceship coatings and even surfboards.

Shares in the company based in the southern city of Bielsko-Biala have soared by over 40 times since 2009.

Zbigniew Bokun, Eko's founder and head of the family that controls it, said the company's appeal had been boosted by a February deal to deliver microspheres to U.S. oil exploration giant Halliburton.

Eko is now worth $147 million and is part of a market whose total value is expected to grow to $5.2 billion by 2018, according to research firm Marketsandmarkets.

"It would be easier for us if we had a large partner," Bokun told Reuters in an interview. "We are interested in a U.S. partner only."

He said there was strong demand for the company's product in the United States.

But Eko stock has fallen about 7 percent this year due to concerns that Western governments may impose economic sanctions on Russia after its annexation of Ukraine's Crimea peninsula.

Eko imports about 60 percent of its raw materials from Russia. Bokun said that, for now, the crisis had not affected the company as it does not transport its products via Ukraine.

Bokun founded the company 30 years ago when Poland was still under communist rule. His wife, daughter and son jointly hold a controlling stake in the company.

The microspheres, also known as cenospheres, are tiny spheres made mostly of silicon dioxide and filled with gas. They are created naturally when ashes from coal-fired plants are mixed with water.

Thanks to their light weight and heat-resistant properties, cenospheres are also used in the construction sector and can be found in automobiles and propellers.

Eko sold nearly a quarter of its output of 10,000 tonnes of microspheres to the U.S. last year.

Bokun said the firm had a much greater production capacity and could process 70,000 tonnes of microspheres per year.

The company sees its net profit almost doubling to 30.1 million zlotys ($9.98 million) in 2014, with revenue growing 66 percent to 65 million zlotys.

It aims to open a factory in June near Astana in Kazakhstan, which will acquire the microspheres directly from the mixture of ash and water flowing out of a local coal-fired plant.

The Kazakh factory, in which Eko owns a 51-percent stake, is expected to produce between 10,000 and 20,000 tonnes of microspheres per year, which could allow it to more than double its output. ($1 = 3.0159 Polish Zlotys) (Reporting by Marcin Goettig; editing by Tom Pfeiffer)

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