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Grunergy – CEO Interview

 

Rick, can you briefly present Grunergy’s corporate strategy?

Now that Grunergy has proven the superiority of Mercury Control Technology through extensive field testing and through external analysis, we have begun introducing our technologies to the utility industry across North America. Fullscale demonstrations and boiler optimization programs to utilities are well underway. The utility industry requires the utmost confidence in its suppliers, and Grunergy has chosen to allow utilities to see first hand the savings and efficiencies we can offer. We are positioning ourselves to take advantage of the 2011 surge in demand, following the new United States Environmental Protection Agency legislation coming in April of next year.

 2.) You have just attended the Mega Symposium in Baltimore. What did you take away from it, new partnerships with utilities?

The Mega Symposium in Baltimore was very productive. There were three very important outcomes from the conference. First, our team assessed the industry’s technological advances over the last twelve months, and we have reconfirmed our position as the leading solution provider. The competition is still a long way off from achieving our results.

Second, we were able to introduce our “Total Mercury Control” system to many new utility operators from states that are about to become regulated. We are following up on these leads and many are expected to bare fruit.

Finally, we have met with new potential suppliers of our raw materials for our proprietary sorbent and SEA™ materials. Our expanding sourcing capability will only serve to increase our margins.

3.) Let’s talk about regulation in North America: When do you expect important expansion of legislation for mercury control in North America?

The U.S. Environmental Protection Agency has been very clear on this. The new regulations will be announced in April, 2011 and after a feedback period of 6 months the regulations will become law.

4.) Can you use the EERC for marketing purposes as well? How will your partnership with them look going forward?

The EERC will not be used as a marketing partner; their expertise is purely scientific and engineering in nature. Their R&D capabilities will be crucial to maintaining our position as the leading technology provider in the sector. They will also be utilized for installations to ensure the technology is implemented to achieve optimal service levels. Their direct involvement allows us to continue our rapid pace of development, demonstration and implementation.

5.) You just announced a new Vice President Field Operations, Jim Trettel. Are you planning to increase your staff, especially the sales force, further?

Jim is a tremendous asset and the first of several key hires we will be adding to the team over the next few months. Jack Hammen has also just joined us as VP Finance. Our field team is already in place. It is the same team that has been conducting testing and demonstrations across North America. They will be working in tandem with the EERC personnel to launch the “Total Mercury Control” system under Jim’s guidance.

In regards to expanding the sales team, the utility industry responds to test results more than hype and sales pressure. This requires direct marketing efforts, so only a few hires will be made, as we do not want too many implementations that can not be conducted simultaneously. Obviously we will adapt if growth is

even more explosive than forecasted, but we see the operational side requiring the most focus since our pipeline is already very strong.

6.) What is the revenue potential of your total mercury control solution and when/where will you start selling the product?

The revenue potential of our “Total Mercury Solution” is conservatively estimated to be in the $300-400 million per annum range, once the 80-90% capture rules take effect. Presently the U.S. sorbent-based mercury capture market is in the $250–300M range and is expected to increase to $3-4B once the new regulations are in place. The growth period will begin in 2011 and we conservatively expect to capture 10% of that market due to our technological advantage. We will ensure that advantage is maintained as next generation product development is well underway.

7.) Do you plan on marketing it on your own or with a large JV partner such as a major utility?

Presently we are reviewing several different options. I expect to make some clear statements in this regard before the end of 2010. Suffice it to say that the technologies governed by Grunergy Technologies are very much of interest to the major players in this space.

8.) Does Grunergy plan to grow organically or through acquisitions as well?

Because our technology represents the best option for the utility industry, we believe the best way to build shareholder value at this stage is through organic growth. As demand ramps up in 2011 we will assess opportunities at the time that will allow us to be best positioned to meet customer demands.

9.) What are the main risks for Grunergy?

Growing too fast is my biggest concern. We need to ensure that product orders can be implemented properly. If that is not done properly our brand will diminish. As I said, our growth will be organic for the moment, but should we find demand overwhelming we will find synergistic partners to fuel revenue and margin growth. 10.) Which other technology companies is Grunergy comparable with?

The most obvious comparable firm is ADA Environmental solutions, though they lack our technology advantage. Other firms in the space include Norit, Calgon and a number of other major utility supply firms. I know that many of them are watching as the Grunergy product continues to gain utility industry awareness.

 

 

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