Friday, April 21, 2017

News: Xeros outlines 2017 as "year of execution"

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Having reached a number of major milestones, innovative Rotherham company, Xeros, has hailed 2017 as a year of execution, in which it will significantly progress the commercialisation of its highly disruptive, innovative technology.

Based on the Advanced Manufacturing Park (AMP), Xeros is a Leeds University spin-out that has developed a patented system using a unique method of special polymer beads rather than the usual large amounts of fresh water to clean clothes. Water is replaced with millions of reusable polymer beads, typically reducing water use by 75% when compared to a traditional laundry machine.

For the 17 months to December 31, 2016, Xeros reported a £21.1m pre-tax loss as it continued to invest in developing the technology - £7.6m was spent on R&D including staff and patent costs. Revenue for the same period was £2.5m, up from £480,000 for the year ended July 31, 2015.

The AIM-listed firm raised a further £40m in a share issue at the end of 2015.

As it commercialises the technology, the first major target market was the billion dollar US laundry market. The number of commissioned machines has grown by 140 to 267, with another 150 in the pipeline. A new regional office and engineering centre in the US opened during the period and commissioning capacity has been improved to meet demand. The firm is targeting specific areas where drought and water scarcity is a problem.

The company is in detailed discussions with a number of leading market participants, and are confident of achieving an annual installation rate of 2,000 per annum in the year of 2020.

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The business model is based on the supply of the polymer beads and service income from installed machines has increased significantly. To aid this and "greatly accelerating the adoption rate of our technology" Xeros has launched the Symphony Project, which enables laundry machine manufacturers to retrofit and install an ingenious system that enables other manufacturers to use Xeros polymer beads in their machines.

Mark Nichols, chief executive of Xeros, said: "Over the past 17 months, we have achieved major milestones in our technology development and its commercialisation. We now have strong evidence that we have the capacity to deliver sustainability, performance and economic benefits across three world scale industries: cleaning, tanning and textiles.

"Technical validation and increasing market endorsement show that we possess a platform technology that can transform these industries.

"The long-term value of our technology in each of the selected markets is substantial, given their scale, the environmental and economic pressures on them, and the quantum of the improvements we deliver in these areas. These benefits are now increasingly being recognised and we are in active discussions with a number of partners with the objective of further accelerating our commercial development.

"Our scope and strategy is now fixed. 2017 will be a year of execution, in which we significantly progress the commercialisation of our highly disruptive, innovative technology."

Industry trials have also shown that Xeros technology and processes substantially reduces water, chemistry and effluent in the processing of leather, an industry that uses a huge amount of water to apply chemicals. Targeting the $50 billion leather processing market, Xeros has signed a heads of terms with Wollsdorf Leder Tannery in Austria for a ten-year contract to convert its entire re-tanning processes to Xeros' technology.

Scale trials are also taking place with four other European tanneries who address the auto, shoe and garment markets.

As the focus moves to execution, R&D continues as Xeros works on its next generation of polymer beads. The next target market is textiles - the garment and fabric manufacturing market sectors offer significant potential. 22.7 million tonnes of natural fibres are processed annually for the clothing and textiles industries.

The Rotherham based polymer science team increased to eight people by the end of the period. The team is directly aligned to the three application areas (laundry, leather, textiles) and their successful commercialisation. As at the end of March 2017, the development teams possessed a total of 12 PhDs.

Xeros now has 48 patent families "pending" or "granted" to protect its portfolio, with more anticipated to follow.

Xeros website

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