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Alexium International Group Ltd: THE INVESTMENT CASE
INVESTMENT OVERVIEW

Alexium International Group signs agreements worth US$3 million per year

Alexium has been in discussions with other bedding fabric producers and finishers and anticipate further interest in our multifunction, single-formulation chemistries.
Alexium International Group signs agreements worth US$3 million per year
INVESTMENT OVERVIEW: AJX The Big Picture
Alexium signs agreements worth US$3 million per year

Alexium International Group Ltd (ASX:AJX) will supply its Alexiflam and Alexicool products to two U.S mattress ticking producers in agreements valued in excess of US$3 million per year.

Alexiflam is a flame retardant (FR) and Alexicool is a phase change cooling technology.

These agreements are between Alexium and two separate U.S.-based major producers and finishers of mattress fabrics for joint supply to one of the largest mattress brands in the world. 

Sales are expected to commence immediately with monthly revenue to continue over an initial three-year production period.

Dirk Van Hyning, president of Alexium, commented: “When we first entered the bedding sector with our initial FR product, Alexiflam, we quickly established ourselves as not only a provider of high-quality FR products but also as a highly capable partner for providing complex chemical solutions reliably.

“These multifunction, single-formulation agreements are a major step forward for Alexium as we expand our capabilities in the marketplace.”


Multifunction agreements

Following Alexium’s success with its Alexiflam and Alexicool products in the bedding market, the company sought to provide a single chemical package comprising a number of products and functions to help its customers reduce production time and complexity.

These sales agreements are Alexium’s first successful implementation of that approach.

This new approach to the bedding market allows Alexium to capitalise on its expert knowledge of proprietary chemistry formulations to provide customized solutions to its customers and maintain strong margins, while its customers are responsible for the production process.


Background

Alexium holds over 20 patents across nine countries for environmentally friendly chemistries and a process developed initially by the U.S. Department of Defense, which allows surfaces to become fire retardant, water proof and oil proof.

Applications under development include but are not limited to textiles, packaging, electronics and building materials.

Alexium’s fire retardant chemical treatments are currently marketed for different fabric markets under the Alexiflam™, Alexiflam FR™, Alexiflam SYN™, Alexiflam NF™, Alexicool™, Alexiflam PB™, and Alexiflam AD™ brand names.


Analysis

These agreements not only represent a significant revenue uptick for Alexium but provide for a new sales method in multifunction agreements.

Alexium has been in discussions with other bedding fabric producers and finishers and anticipate further interest in our multifunction, single-formulation chemistries.

The company also expect this broader approach to the chemical marketplace will be very successful in other industries such as apparel, footwear and beyond.

These new purchase orders and US$3+ million in additional annual revenue will support Alexium as it strives to achieve its US$18.5 million revenue guidance for CY16.

The continued growth of revenue through purchase orders show that the expansion of manufacturing and production capacity undertaken in 1H16 is proving to be a good investment by Alexium.

Alexium’s share price has spiked intraday on the news, currently up 23% trading at $0.64.

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