Edit Metric
|
||||||||||||||||||||
Details
|
||||||||||||||
Zoltek Companies (ZOLT)Stock (Industrial Electrical Equipment Industry)
 To diversify its product line away from the aircraft market, where it is a small player, Zoltek has expanded into niche markets like wind energy, which was the real driver behind Zoltek's sales increase in 2007. Global investment in renewable energy amounted to nearly $150 billion in 2007, driven by the wind sector.[7] The investment in wind energy alone amounts to more than a third of the $150 billion. As of 2007, Zoltek is a long-term turbine blade provider for the top two pure-play producers of wind turbines in the world, Vestas and Gamesa.[1]
[edit] Business FinancialsZoltek's fiscal year ends September 30th of every year. From fiscal 2006 to fiscal 2007, sales increased 63.4% to $150.88 million.[1] Of this 63.4% increase, 87% can be attributed to increase in carbon fiber sales and 11% can be attributed to technical fiber sales.[1] Over the same period, carbon fiber sales increased 77.2% and technical fiber sales increased 25.8%.[1] Despite the increase in sales, Zoltek still failed to register a net gain. This is due in large part to cost of sales, which increased by 53.6% to $107.5 million from 2006 to 2007.[1] Zoltek operates manufacturing plants in Hungary, Texas, and Missouri. In October 2007, Zoltek purchased a plant in Mexico, which is expected to come online during the first quarter of 2009. In addition to this new facility, Zoltek plans to increase its production lines in Hungary in the second quarter of 2008. Together, these new additions will increase Zoltek’s production capacity from 20 million pounds of carbon fiber to 30 million.[1]
Zoltek manufactures two main products: [edit] Panex: carbon fiber (77% of net sales in 2007)Zoltek’s carbon fibers have many applications. Chief among them is being used as the building material for the blades on wind turbines. Carbon fiber is rapidly replacing glass fiber as the material of choice in production of wind turbine blades. Carbon fiber is lighter and provides more stiffness.[8] Zoltek’s biggest customer in 2007 was the world’s largest wind turbine producer, Vestas Wind Systems.[9] Vestas contributed to 33% of Zoltek’s revenue that year.[1] [edit] Pyron: technical fiber (21% of net sales in 2007)Zoltek’s technical fiber is oxidized acrylic fiber that is made out of polyacrylonitrile; the company is the largest producer of polyacrylonitrile fibers in the world.[10] Zoltek’s technical fiber is useful for heat and flame resistance applications. The company’s technical fiber is used primarily for aircraft brake pads. In 2007, Zoltek controlled 85% of the market share for aircraft brake pads.[11] [edit] Corporate/Other (2% of sales)Zoltek’s remaining revenues come from business segments that Zoltek decided to either sell off or discontinue in the fourth quarter of fiscal year 2006. They included the company’s energy sales division, a thermoplastic components division, water treatment services, and electrical services.[12] 
[edit] Trends and Forces[edit] Zoltek’s Pyron division depends on aerospace demandThe aerospace industry is becoming increasingly dependant on carbon fiber composites, which are lighter, stronger, and cheaper than conventional metals.[13] When the aerospace demand cycle is in its upswing, the biggest companies in the carbon fiber industry shift their supplies toward this increase in demand. Zoltek benefits by supplying to the commercial aircraft brake pad market, which will have shortages as the bigger companies take on higher-cost applications, specifically larger aircraft parts. In 2005, 2043 aircraft were ordered by Boeing and Airbus, which was a record.[14] Orders dipped to 1,868 in 2006 and rose again and surpassed the high in 2005 at 2,871 orders.[5][6] As long as aircraft orders from the aerospace industry continues to surpass 1,000 per year, Zoltek will be able to profit from shortages in the commercial market.[15] In 2007, Zoltek had 85% of the market share for aircraft brake pads, the primary application for its Pyron fibers.[16] [edit] Zoltek invests heavily in the wind energy industryGlobal investment in renewable energy amounted to nearly $150 billion in 2007, an increase of 60% over 2006.[17] Of that $150 billion, over $51 billion was contributed to the wind sector. The global wind industry installed close to 20,000 MW of wind energy in 2007, an increase of 31% over 2006.[18] In the US alone, 5,244 MW were installed in 2007, more than double the amount installed in the previous year.[19] The 5,244 MW accounted for about 30% of new power-production capacity in the US that year.[20] The wind industry is expected to grow to 240 GW of total installed capacity by 2012.[21] That total is just over 94 GW as of 2007.[22] The material of choice for the production of wind turbine blades is carbon fiber. Zoltek plans to benefit from the growth of the wind energy industry by supplying it’s Panex fibers for this application. In 2007, Zoltek signed multiyear contracts with three large wind turbine producers, including the two largest producers in the world. In May of 2007, Zoltek agreed to supply $300 million of carbon fibers to Vestas over five years.[1] In August of 2007, the company agreed to supply $142 million of carbon fibers to Gamesa, the world’s second largest producer of wind turbines.[1] In June of 2007, Zoltek also agreed to supply $30 million of carbon fibers to German-based DeWind Incorporated over three years. [1] [edit] Zoltek foresees other carbon fiber applications in the near future
[edit] Carbon Fiber is Extremely ExpensiveDue to strong demand from the aerospace industry[26], the price of carbon fiber is very high, up to 30 times that of steel.[23] In early 2008, the price of steel was about $1000 per ton.[23] From 2004 to 2007, the cost of carbon fiber has increased by more than 65%.[27] While strong demand will drive prices up, it is also expected to drive increases in production, which will eventually bring prices back down. In 2007, worldwide output of carbon fiber was about 35,000 tons.[23] The output in 2010 is expected to be 53,000 tons.[23] [edit] CompetitionThe leading carbon fiber companies include:
Toray, Mitsubishi Rayon and Teijin, Ltd. have 70% of the world's carbon fiber market share.[29] Toray alone has 30% of the world's carbon fiber market share.[30] Zoltek has 85% of the commercial aircraft brake pad market.[16]
[edit] References
|
The Shelf
|
Edit
History
Bookmark
