IBC has a diverse offering with many facets, can you elaborate this?
IBC Advanced Alloys (TSX: V.IB, Stock Forum) is a pure play beryllium alloys manufacturing and technology company that produces high performance copper beryllium and aluminum beryllium alloys. The copper beryllium alloys are produced for a range of applications including plastic injection molding machines, aircraft landing gear components, specialized wiring for modern aircraft including Boeing’s Dreamliner, oil and gas exploration and production infrastructure and many other end uses.
We also make proprietary beryllium aluminum castings (Beralcast), primarily for the automotive and aerospace industry.
You are also involved in research and development can you tell me about this?
On the R&D front we are active in two main areas: first, we are constantly researching new alloy and new applications as well as new potential markets where our alloys allow customers to differentiate themselves with better materials performance. Second, IBC sponsors research on a provisionally patented beryllium oxide (BeO) nuclear fuel that is being developed at MIT, Texas A&M and Purdue University. The fuel, which is in its primary testing phase, is composed of a mixture of uranium oxide and beryllium oxide. Initial lab testing indicates a more efficient nuclear fuel that runs cooler than conventional fuel and cools down faster. The most obvious potential benefit of this fuel, apart from cost effectiveness due to its efficiency, is the safety benefit from a nuclear fuel with a lower center line temperature that cools down faster due to the high thermal conductivity of the BeO. This is very important as the industry, in the wake of the Fukushima tragedy, is now focused on developing safer accident tolerant fuels and improved safety profiles in the event of an emergency shut-down.
What’s unique about IBC?
We are unique in that we are the only company in the world that can make beryllium aluminum castings, thereby offering enormous cost savings to our customers while maintaining the superior metallurgical qualities of beryllium and aluminum. Beralcast is the best material for specialized applications where light weight and stiffness are critical performance criteria and is ideal for the aerospace, automotive and the consumer recreation markets such as cycling and motorcycling where weight and strength drive performance.
Beryllium isn’t a common metal, what is it used for and what is the demand for it?
Beryllium and beryllium alloys, are the best materials solutions wherever ultra-lightweight and high modulus (stiffness) are important performance criteria. Good examples are aerospace, next generation hybrid automobiles and many high tech industrial applications.
Who are your customers?
Honda, Freeport, Raytheon, Cameron Industries, Denso Corporation and high end machine shops serving the automotive and plastic injection molding industries and our customer base is growing!
How do you identify potential customers?
We target industries where we believe we have a technological and materials edge and can offer customers a performance advantage. Our focus is on helping our customers sell more of their product and to help them grow their business. We have a dedicated business development team focused on automotive, aerospace and industrial components.
You recently announced the receipt of certification for AS9100C. What is that and why is it significant?
AS9100C is a global aerospace quality certification that is mandatory for doing business with the aerospace industry and to be recognized as a bona fide aerospace supplier. Having the certification allows us to differentiate from other aerospace component manufacturers that do not have it.
What are some of your upcoming milestones?
Our corporate milestones include continued growth, improving margins and targeting profitability. Our subsidiary, Engineered Materials Corp., should see realization of business development initiatives including long term aerospace and automotive contracts. Our nuclear fuels initiative will target an R&D joint venture for the next phase practical test.
This is a pretty tough time for most companies, what are the challenges that IBC faces?
Like all manufacturing companies we are challenged by the health of the global economy and are focused on improving our competitiveness during this current period of economic uncertainty. For example, we are adapting to our customers who are now managing smaller and leaner inventory levels by improving our lead times and responsiveness.
Is the company profitable?
We have essentially two business units: Copper Alloys and Engineered Materials (aluminum). The copper alloys division is profitable on a stand-alone basis, while at the Engineered Materials facility we are still investing for growth. The net impact is that the Company is still incurring net losses on a consolidated basis as we transition to profitability at the Engineered Materials division.
Why should an investor be interested in high performance alloys and IBC in particular?
High performance alloys are the fundamental building blocks of the next wave of industrial growth. Materials performance is a key ingredient of success for almost every industry. We are at the leading edge of a niche market with significant barriers to entry for other competitors. Investors have an opportunity to participate in an exciting growth opportunity at the early stages. Further we are close to a series of significant inflection points and growth catalysts for the business, which will drive corporate growth and value creation. Externally, many believe we are at a pricing trough in the micro-cap public markets with very attractively priced entry points for many companies including IBC.
Disclosure: IBC Advanced Alloys is a Stockhouse client.