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Carbon Revolution considers share scheme
Local carbon-fibre wheel producer looks at ways to raise capital, continue expansion
10 Sep 2014
By IAN PORTER
THE world’s sole manufacturer of one-piece carbon-fibre wheels, Geelong-based Carbon Revolution will consider offering shares to investors as its plan to supply mass-produced global vehicles moves forward.
The company is currently building its first dedicated production plant and already plans to double its footprint, so strong has been the reaction of car-makers around the world.
The 3000-square-metre plant now under construction is expected initially to produce around 50,000 wheels a year, with the company aiming to start producing its patented one-piece carbon-fibre wheels for its first original equipment order from a car-maker early next year.
As GoAuto has reported, a still-secret car-maker will reveal a new high-performance model using the carbon-fibre wheels before the end of this year.
Others are expected to follow as Carbon Revolution is now working with, or having its wheels tested by, a dozen car-makers around the world.
Carbon Revolution chief executive Jake Dingle expects several of them to follow through with signed orders “in the very near future”. Some are in the advanced stages of development.
He said if the company succeeds in driving production costs down, the prospect of higher-volume orders will increase, as will the need to expand production capacity.
“We certainly won’t need to raise $1 billion,” Mr Dingle told GoAuto, but he pointed out that sales success brings the need for more capital “because these programs require work and input upfront before you start delivering product”.
“We could do an IPO (initial public offering). It’s one of several options for us and we are not against the idea.” He said the founders and original employees of Carbon Revolution still held around 50 per cent of the shares after the sale last year of around 30 per cent to Swiss wheel company Ronal, Europe’s largest producer of aluminium wheels.
Regardless of where new factories might be built, Mr Dingle said the company’s wheel plant in Geelong, currently under construction, would remain the lead factory even if larger operations were built overseas, closer to major customers, in coming years.
Mr Dingle said the first target is to match the cost of forged aluminium wheels. Ultimately, he believes Carbon Revolution will be able to reduce costs to a level that will allow them to compete with cast aluminium wheels.
As the cost comes down, demand will rise and new factories will have to be built.
“There is a question about when and how that happens,” he said.
“Certainly, with larger volumes, most customers expect you to be able to produce very close to where their end demand is.” He said that Ronal has 13 plants around the world in Eastern Europe, Spain, Germany, Italy and Mexico.
“For us, our vision is the plant here will always be the lead plant.” He said the company favoured a set-up used by many technology-driven firms, with one plant – Geelong – developing and proving technology, and larger, high-volume facilities built where they need to supply customers and secure programs.
Apart from car wheels, Carbon Revolution is already taking active steps to supply aeroplane wheels and truck wheels.
Initially, these markets would be serviced from the Geelong plant, he said, although both are potentially high-volume markets and may require new and dedicated plants at home or offshore.
The Geelong plant is ideally situated because of its co-location with Deakin University’s Institute for Frontier Materials, as well as Carbon Nexus and the CSIRO’s polymer division.
Carbon Nexus develops different types of carbon-fibre at its new plant on campus and is the world’s only independent carbon-fibre developer.
“There are nine companies in the world that make carbon-fibre and they are all very protective of their technology and their intellectual property,” Mr Dingle said.
“So up until now all of the development around the world in carbon-fibre happened within one of those nine suppliers.” Mr Dingle said Carbon Revolution was able to work with Carbon Nexus on the specifications for a new wheel and Carbon Nexus could develop a new fibre that is not off someone else’s shelf.
He said Carbon Revolution was also now working closely with CSIRO on a number of fronts.
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