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http://www.stanelco.co.uk/index.htm

Hi everybody.

Iam new to this BB, but have been following the BB for 18 months, and seen the highs and lows in SEO. I have a reasonable holding SEO (over I million shares) and have had for that length of time. The latest news regarding Wal-Mart wanting to fast track certain aspects of SEO's technology, together with the announcement offering licences for a minimum production per annum of 20,000 tonnes of Starpol is excellent news, and in the past would have seen the sp rocket to over 30p. It may still happen, but I think this will only occur when we start seeing some earnings coming through, and that means contracts being signed up.

With regard to the value of each licence, I would suggest the following. From the Merrill Lynch analyst's note recently, Starpol 2000 sandwiched with TPS (Thermo-plastic starch) - which is price comparable with APET - is priced at 1.45/Kg. Therefore the cost to a third party of buying 20,000 tonnes of the material would be 1.45x1,000x20,000=29million or 20million (assuming 1.45=$1). Assuming that the JV between SEO and SPhere receives 10% of that cost as payment in relation to providing the licence, then SEO's sales per licence for 20,000 tonnes of material would be 1 million (this figure would be higher if the licencee produces more material on the ratio of 20,000 to 1) - at this stage I am not sure if that is net of providing the Starpol material, and therefore not sure of the profit derived from these sales. I believe that SEO are looking to provide 17 licences, and therfore suspect that SEO may have a minimum requirment to provide 340,000 tonnes of material almost immediately. Now that bodes very well for the future. I am in for the long haul, and I now look forward to seeing things to start happening soon.

Welcome rmhyams. thanks for that work.
Where do you get the 17 licenses from?
Would love to know.
Alan

From the Merrill Lynch note.

found this:

groundbreaking technologies (you want the best biodegradable plastic its here now)

partners (perseco) have a secure supply of material (no supply and demand issues)

to offer continuous supply in turn to their customers (again no supply and demand issues further up the chain)

no shortage of interest in this venture (biting our hands off actually)

to accelerate the availability of our materials in the U.S (perseco and walmart want it asap)

vertical integration (starpol is produced in existing plastics factories alongside petro plastics using existing equipment making it very fast-track)

preference will be given to those companies able to move to agreement and bring product to market in the soonest time frame (starpol can be up and running in existing factories in weeks)

the following quotes are from the spf forum last year

"The additional ingredients allow the material to be processed more easily than 100% PLA without the need for equipment modification"

"Can be easily thermoformed on standard equipment with only minor adjustments to temperature" ---------------------------------------------
If starpol can be formed on existing machines, I think contracts will be signed in days not months.
jim

Very helpful posts jimward and rmhyams. That figure of 1m per licensee seems sensible; but I would assume separate from material supply. 17m would go through to the bottom line and we are back to being worth around 15p on the share price.

I think we need to remember that SEO are running a business at a critical stage of development; it can't be a priority to issue RNSs all the time; their website you would have thought was a higher priority. Maybe they sould emply someone to do it but then that person needs recruitment effort and induction. I would be happy for them to get on with their research, commissioning, selling etc. Sensible to let the Merrill Lynch's of this world handle that side of the business. Of course this news came out with a press release because they are trying to tie down potential customers; that should be their priority.

I agree with Alan that these two announcements, WalMart and Starpol licences, are tremendously significant. I have been surprised in several cases how slow the market is to react to positive news (e.g. AZM, successful completion of obesity trials in US, triggering an almost certain mega-licensing deal but several weeks before the sp starts motoring). I am ratcheting up my holding now and I wouldn't advise followers to wait; once the trading channel is broken, the movement could be fast.

Eric

His back again batton down the hatches.

Driver

Who is back again? You've lost me!

The oily one

Thanks to:

Biscuit,
Alan,
Eric,
gary,
rmhyams
and others

for really interesting and thought provoking posts.

The more I read them the potential seems to be getting bigger and much more exciting.

At risk of attracting unwanted criticism, it seems that if the picture painted by you guys of SEO's future potential comes to fruition it will mirror the future that PM1 used to talk about being possible - well in five or so years or more.

I'd try to help you guys out with the maths, but my electronic abacus does not have enough zeros. Can't use my fingers as I have half of one missing so that does not help much either.

I am looking forward to EVO's update on future income/profits when they take into account the effect of the news story released in the US on Friday and when firm deals are signed with WalMart and others.

The future is bright .... but not plastic or oil.

The (not so) oily one

Agree, Oily.
It gets harder now to post and not sound like Paul!!!
I am still trying to disprove my own maths here cos every time I look at it I cannot believe the potential upside and the apparant speed with which it may be delivered.
I have criticised SEO in the past, when i thought they had it all wrong, but blow me, this looks like the real deal.
Hope they don't make me eat my words.
Alan

as good as it all seems, i can't help getting a feeling of deja vu. anyone remember this time last year ?

Bosley

Deja vu yes, but this time last year, we never had so many ducks in a row to shoot at. All I remember is the ASDA possibility which everyone immediately converted into a virtual done deal with WalMart.

Now we have Starpol 2000 and 3000 which I believe is better, WalMart actually saying they are going fasttrack Starpol and looking at Greenseal, the possibility of deals coming from fastfood companies, the tie up with Perseco who have great influence with global companies. Need I go on?

The (not so) oily one

i do agree with you oily, but these ducks have done nothing for the sp apart from maybe hold it up above 14p. i still think greenseal needs to show that it is a success before we can move on.

Just to explain if you blinked you would have missed it, earlier we had some one posting very nasty pictures of sewage on all the threads. Well done M AM for taking it all off and a very fast ban.

Bosley

I think the reason for the share price not moving very much is because many investors are more cautious these days having watched the rise to around 30p when the ASDA exclusive period started.

There is also an element of "show me the money" - real turnover required before some will really believe that SEO are going to deliver.

When it does, I think that the sp will rise fairly steadily with few significant pull backs.

The next few months are going be really interesting.

The oily one

Serious potential is what it is, but as Oily says its now a case of "show me the money"!

SEO are big on promises and when, on the rare occasion they appear to be specific, they fail to achieve. The point in question is the more realistic timescale and cost of the Biotec expansion:

26/07/05
Stanelco, the RF (radio frequency) applications group is pleased to announce that it has received a conditional commitment from SP Metal its Joint Venture ("JV") partner in Biotec for an annual purchase of approximately 10,000 metric tonnes of Biotec's biodegradable pellet worth in excess of Euro20m per year.

As a result, Stanelco and SP Metal have agreed to increase Biotec's production capacity of biodegradable pellets to 12,000 metric tonnes by an investment programme in new processing equipment valued at Euro4.5m. Full production is anticipated within six months.

30/08/05
Biotec have received a conditional commitment from SP Metal for an annual purchase of approximately 10,000 metric tonnes of Biotec's biodegradable plastic pellet worth in excess of Euro20m per year.

Stanelco and SP Metal had initially agreed to increase Biotec's production capacity of biodegradable pellets to at least 12,000 metric tonnes within nine months via a joint investment programme of up to Euro4.5m. However due to further recent improvements in both the production procedures and the ability to process the materials, a capacity of 24,000 tonnes for an investment of Euro2m is now envisaged within the same period.

16/12/05
Sales of Biotec materials (Biodegradable, compostible and edible polymers based upon starch) are continuing to both SPhere (formerly SP Metal) and other customers. The relationship with SPhere is working well. We are on schedule to substantially increase in 2006 the production capacity of these materials - including Starpol to 20,000 tonnes by early 2007.

28/02/06
Sales of Biotec materials (Biodegradable, compostible and edible polymers based upon starch) are continuing to both SPhere (formerly SP Metal) and other customers enabling Biotec to concentrate further resource on R&D. The relationship with SPhere is working well. We are on schedule to substantially increase in 2006 the production capacity of these materials - including Starpol - and expect have a capacity of 20,000 tonnes in Germany by early 2007.

A further investment of EU1.5 million was made by each shareholder of Biotec in order to fund expansion of Biotec's research and production facilities.

Once again there are subtle differences, but the production went from 12ktpa, 24ktpa, 20ktpa and has held at 20k tonnes pa in the annual report.

The cost of the expansion: Euro4.5m, Euro2m, ? and Euro3m respectively.

The duration: 6 months, 6 months, early 2007 and early 2007.

So it would appear that the timescale has slipped, and if the Euro1.5m each is all it takes to achieve the ~20ktpa then they'd have come approx midway between their estimates.

You're right, Gary.
That is the history that makes investors think "here we go again".
I really do hope and think that this time is a bit different though, because the partners are not controlled by SEO and the terms of the press release make it sound imminent.
Time really does appear to be of the essence this time around.
It reminds me of those local authority job adverts, where the position has been taken by an internal applicant already, but the authority must be seen to go through the advertising and interview process, to satisfy their own rules.
I think SEO have already drawn up the agreements with WM and Persico, but must be seen to offer it out freely, in order to satisfy larger shareholders of due diligence and attract other big players to what is going on.
Could be totally misreading the situation, but the clue is there in the vertical integration bit and the ready to roll bit.
Just an opinion.
Alan

Thanks Alan,

Here's hoping.

Very positive all round and can't complain. We're in a very nice position in the mid teens, whcih seems to be where my stocks tend to hover for quite a while untill take-off, AHT was a prime example.

Off topic a moment - can anyone tell me how long you are allowed to hold cash subscribed to a stocks & shares ISA whilst deciding what shares to invest in? Anyone know a definitive website with the rules clearly set out on this aspect?

Thanks

sd

SD I believe there is no set time limit as long as your "intention" is to reinvest,certainly no problem with a few months.Confirm with your provider tomorrow.

So, what will tomorrow bring???
Anyone got crystal balls? (If so, please don't stand too near a singer with a really high voice. You may find the high voice catching)
Alan