Friday, 14 December 2012

CEMATRIX's Future Growth Possibilities!

Calgary Bridge Abutment
CEMATRIX Corporation
CVX - TSX Venture
Shares issued: 33.4 million
Fully diluted: 37.4 million


As of late, CEMATRIX has been using the term “tipping point” quite a lot when addressing the issue of broad product market acceptance for its cellular concrete offerings.  This has been a multi-year challenge for CEMATRIX as its unique product has so many applications and each application can be at a different stage in market awareness and acceptance in each different geographical location.  Simply stated, CEMATRIX is now winning a growing number of contracts and importantly, referral business for the construction and infrastructure markets.
To back up a bit, I recently had the opportunity to attend a pour for a bridge abutment as part of a ring-road extension in Calgary, Alberta.  What I found most amazing was the genius in the simplicity of the application.  As I witnessed the foamed concrete pour like muddy water out of a large hose and fill in all the containment structure nooks and crannies, it was easy to understand why this product saves contractors time and money versus the products that it is replacing.

On the subject of “tipping point”, the Calgary ring road pour was the first time that CEMATRIX had worked for this specific general contractor and the first time the Company had completed an Alberta Infrastructure project for this application.  I witnessed countless quality control samples being taken as a team of engineers, along with CEMATRIX staff, ensured the consistency of the product.  It turns out that this contractor was so impressed with the way the project turned out that it lead to an immediate referral to a large project taken on by its sister company in Ontario.

Just 3 weeks later CEMATRIX received a purchase order for a bridge abutment/MSE Panel Backfill project in Ontario , which was the subject in part of today’s news release.  

What should be noted is that this particular project is just one of several dozen bridges that the general contractor must complete over the next 12 to 18 months. We stress that there is no guarantee that CEMATRIX will secure even one more bridge and/or MSE Panel Backfill project but reasoning would suggest that the company should be in the running based on what has transpired to date. The general contractor is responsible for maintaining every part of the project for 30 years so it is in  his best interest to do it right the first time.  For this project, CEMATRIX is pouring its cellular concrete at the base of a bridge and behind MSE Panels, which is similar to the Calgary pour.  
On another note, The Howard Group recently arranged a number of meetings in Toronto and Montreal with key people in the financial community for CEMATRIX CEO, Jeff Kendrick.  This was the first formal marketing of CEMATRIX out east and the reception we received is somewhat evident in the recent volume and share price appreciation over the past couple of weeks since our  late November trip.

The stock’s average daily volume has increased over 700% since the beginning of December. 
In today’s news release, CEMATRIX mentions that it should complete $8.6 million in sales for 2012 and has received $1.3 million in new contracts  The Company had stood poised for a banner 2012, but $2.8 million of contracted projects were delayed and moved into 2013 by contractors, which has helped to already push next year’s backlog to $4.4 million. 

Without the delays in certain projects, CVX would be looking at an $11+ million sales number for 2012 compared to $7.8 million, last year.

The point is that the business is growing and the referrals are increasing.  

To view today's news release, click here.........