5. Orbite Aluminae’s Positioning in the High-Purity Alumina Market…
Orbite representatives have stated in interviews that the company has tested its production at its pilot plant and expects to produce three tonnes of HPA per day by 2013. The company plans to increase its production to ten tonnes per day by 2015 by upgrading the existing facility, depending on demand and its ability to capture market share. A reasonable projection of production (calculated based on 350 days/year) could range between 1,050 tonnes in 2013 and 3,500 tonnes in 2015. With these production levels, Orbite has the potential to become the fourth-largest HPA producer worldwide behind Sumitomo (Japan), Hebei Pengda (China) and Zibo Xinfumeng (China).
Orbite’s HPA targets 5N quality, which means 99.999% purity. Orbite aims to position itself in the high-end segment of 5N. With this level of purity, SECOR believes that Orbite would be able to sell its HPA in 2013 for approximately US $ 120/kg, if existing conditions remain unchanged. If 6N (99.9999% purity) becomes a buoyant market, it is expected that Orbite would be able to serve it by positioning itself in the high-end segment. Orbite could be expected to sell its 6N for approximately US $ 250 / kg, if existing conditions remain unchanged
High-purity alumina (HPA) offers many advantages, including superior hardness, superior corrosion resistance, and high brightness. Given these characteristics, it is increasingly used in various industries and for various applications. Market demand for HPA is expected to soar, driven in particular by the growth of the LED market, which is expected to represent 60% of the HPA demand by 2015.
Most HPA production is concentrated in Asia: the market leader is in Japan, while eight of the top ten producers Chinese. The only upcoming player located in North America is Orbite, a Quebec-based company.
Orbite offers many advantages to its customers, most importantly its proprietary alumina production process that is low-cost and eco-friendly. Conventional alumina production is ill-reputed for its hazardous and caustic residues, especially red mud. Orbite’s proprietary process enables the company to produce alumina without this toxic red mud residue, and its process can even be applied to existing stocks of red mud to remediate it while extracting valuable metals. Orbite can offer its customers a high-quality product, a more environmentally friendly alternative to legacy processes, and an opportunity to diversify their alumina supply thereby lessening their dependence on a single country for supply, namely China.
In conclusion, Orbite has the potential to set new standards for the HPA industry and to have a positive impact on companies purchasing alumina. The possibility of diversifying supply sources and thus avoiding supply vulnerability, accessing a high-quality product at a fair price, and having minimal impact on the environment are some of the advantages that Orbite provides to the industry.
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