Key Considerations

Oxford Olefins is a petrochemical derivative manufacturer, developed within the University of Oxford.

The patented ground breaking catalysis and process technology enables the economic and manufacture of base chemicals that are in demand including environmentally friendly materials. For the first time, this will lead to the low cost, large scale, manufacture of novel petrochemical derivatives with advantaged chemical properties including high performance and environmentally friendly characteristics.

The technology can be:

• operated in batch mode for low volume highly specialised materials
• operated in ultra low cost continuous mode for high volume commodity applications
• integrated into large petrochemical complexes
• manufactured from a discreet business like Oxford Olefins
• applied to petrochemicals, natural materials, polymers and pharmaceuticals

The market size and drivers for a few significant sectors:

• Paper sizing agent - Chinese market is 60kt/yr and suffers from a shortage of base materials
• Fatty alcohol - $6 Billion fatty alcohol market – higher performing detergents, currently offered are more than double the price of current materials
• Linear Alpha Olefins - $12.5 Billion – modified alternatives with higher performance, detergents, drilling fluids, lubricants and others
• Oleo Chemical Market - $20 Billion - natural alternatives to petrochemicals and high environmental impact crops such as palm oil

Investment Highlights

The catalysts, IP and laboratory based process are defined and proven.

We already have multiple areas of interest:

• Linear alpha olefins - large petrochemical processes for detergents, paper chemicals, oilfield chemicals, and lubricants
• Natural materials – fatty acids that allow high demand food materials, and oleo chemicals, competing with high environment impact materials such as palm oil, and coating monomers
• Rubber materials - improved crosslinking to allow removal of sulphur, used in automotive applications

The business plan includes:

• Development and sale of own products
• Custom manufacturing, e.g. pharmaceutical applications
• Development of a licensing activity for high volume applications
• 5 products to be developed to pilot scale
• First product developed to industrial scale
• 500tes/year sales by year 3

We have a $42 Billion addressable market.

We also have a number of Letters of Intent from key market players.

The Base case:

• Turnover £1.25M in year 3
• Third party tollers manufacture under instruction
• Gross Margin £200K year 3 (toller manufacturing costs high)
• Option on own pilot plant to reduce toller costs

The Competitive Advantages:

• The bulk Chemical industries base materials are derived from Olefins. Oxford Olefins patented technology can move these double bonds to unusual positions whilst maintaining the chemical skeleton.
• Allows efficient manufacture, on an industrial scale, of products that to date have been difficult to manufacture or are prohibitively expensive.
• This is a, low cost, low energy, low pressure, chemical technique that lowers the barrier of entry for the production of a range of chemicals and their derivatives.
• The technique is a 'green' alternative to the energy intensive Petrochemical techniques currently used widely today.
• The resultant products and derivatives will exhibit a wide range of advantageous properties such as, fast biodegradability, lower environmental impact, as well as allowing other physical properties to be developed.
• The catalyst IP is secure under a filed patent, the manufacturing know-how, of the catalyst will be retained within the new company and new product specific, next generation catalysts will be developed in due course. The catalyst has the potential to be regenerated or partially recycled, offering further income over time.

The Team

Dr Tiancun Xiao – The co-inventor of the technology, who has worked at the University of Oxford for the last 11 years, is currently Research Fellow, and is regarded as one of the leading authorities on Transition Metal catalysts. Dr Xiao is best known for co-founding Oxford Catalysts and floating it on the AIM in London in 2006 for £65m, this business now operates as Velocys. Dr Xiao has developed the science behind the catalyst system and has the know-how and ability to rapidly scale up production using a manufacturing business he founded and owns in China, thus retaining the know-how on the manufacturing systems required.

Wangjing Ma - Co-inventor of the Oxford Olefins technology. He is a recognised global expert in chemical reactions by photo catalytic methods, particularly olefin isomerization reaction. He has developed several photo-induced processes in the laboratory, published more than 40 publications and 16 patents, and presided over numerous multi-million pound projects. He will lead the development activities in NewCo.

Gordon Beckett – Is intended to be CEO of the NewCo. Gordon has many years of business and commercial management experience within numerous chemical organisations including, Shell Chemicals, BP Chemicals, Inspec, Dugussa, and INEOS. He was involved in the sale of a speciality chemical business for 11X earnings, the turnaround of a failing French manufacturing site improving EBITDA from -€1M to +€35M within 4 years ,and the management of a multisite polymers business with a €1Billion turnover.

Use and application of funding

The Company is looking for investment for £5.5m.

The draw down will be £1.1m for proof of concept and a commercial relationship with target customer. Success will trigger further £4.4m draw down.

The use and application of funds as follows:-

• Simplify shareholding and create NewCo
• Patent Expansion
• Identification and process development of 5 products
• Refine production scale-up and reactor design
• Commercialise one product and sell 500 tonnes/year
• Expand catalyst supply chain

Disclaimer: Enabling Tech Capital Ltd is able to introduce business partners to this Company but if this leads to any potential investment all parties should make all necessary checks and due diligence before entering into any agreement and should seek full advice from their own appointed professional advisors. ETCL make no warrant on the introductions of the technology and we recommend investors always take professional advice and guidance in determining the potential of this or any opportunity.

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