Graft Polymer (UK) PLC Operational Update (3850P)

TIDMGPL

RNS Number : 3850P

Graft Polymer (UK) PLC

20 June 2022

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014, which forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended).

20 June 2022

Graft Polymer (UK) Plc

("Graft Polymer", the "Company", and together with its subsidiaries, the "Group")

Operational Update - Delivering on Key Milestones

Graft Polymer (UK) Plc (LSE: GPL), a business focused on the development and commercial production of polymer modification, biological supplements, and nano-drug delivery systems, is pleased to provide an update following recent key operational milestones achieved at its Research, Development and Manufacturing facility in Slovenia.

Very importantly with respect to the Company's commercial operations, the Group's Slovenian operation has recently reached cash flow positive status through organic growth of its production contracts. This represents a key financial and strategic milestone for the Group.

In addition, as set out in the Prospectus at the time of Admission, part of the Group's use of funds strategy was to invest in a new line of production and laboratory equipment to support revenue growth through increasing production capacity, allowing the continued development of new products and technologies. The Group has had confirmation from its equipment suppliers of delivery of key pieces of new equipment to Graft Polymer's production and research facility in Slovenia in the coming weeks. The new equipment will enable the Company to double its production capacity, cost efficiencies and decrease the finished goods delivery time to customers. The commissioning and operation of this new production line and research & development equipment will ensure Graft Polymer is well positioned to continue its pioneering and market leading research and technology commercialisation in the polymer modification, biological supplements, and drug delivery systems industry.

New key equipment includes:

   --    Microwave Dryer tunnel for porous granules drying process - Pivotal to the optimisation and commercialisation of the Group's high value, low competition GRAFTAPOR and GRAFTAKIT products. The Microwave Dryer increases the capacity from 150kg per shift to 350kg per shift by significantly reducing the drying time of porous granules, therefore, reducing the cost of the product to customers by up to 30% and widening the market for these two products. 

-- Custom-made equipment for manufacturing of high-quality Nanoemulsions for Drug Delivery Systems and Bio Supplements - The equipment will allow the Group's GraftBio Division to deliver higher-level advanced Bio/Pharma manufacturing solutions based on Graft Polymer Drug Delivery Systems developments.

-- Ozone/Plasma Polymer Modification module - Offers the potential to transform current methods of Fluoropolymers modification of which can be expensive, unsafe, and environmentally unfriendly. Once proven, the Ozone/ Polymer Modification module has the potential to revolutionise the Fluoropolymer sector, due to its industrial scalability and efficient production. It is currently anticipated that two major classes of products can be modified, the first being powder coatings for use in responsible applications where high chemical resistance is a priority and the second in [nano]alloys to increase abrasion resistance, temperature resistance, impact strength and reduce friction coefficient.

The Group will be the first to deliver this product which, with capacity of 200kg per hour, will provide it with a first-mover advantage over the competition and open new revenue streams in the long term.

The above equipment items were ordered in April 2022 and form part of the Group's announced strategy of investing in production and laboratory equipment to support the growth of the Group through an increased production capacity to fulfil new commercial orders in the future, and to allow it to continue to develop new technologies to provide products and solutions to help its customers improve their existing products and offer new product ranges.

Victor Bolduev, CEO, commented:

"Delivery logistics and equipment lead times have been challenging for companies globally, sometimes causing delays to the overall delivery of a company's strategy. We are very pleased that our suppliers have confirmed the delivery of this major equipment across both our Polymers and Bio divisions, enabling us to accelerate our research into these innovative and potentially sector-changing products. With the achievement of reaching cash flow positive at our Slovenia facility through organic growth alone, the continuous operational developments being made put Graft Polymer in a good position as we deliver on our strategy."

For more information, please visit https://www.graftpolymer.com or contact:

 
Graft Polymer (UK) Plc             via Tavistock 
Roby Zomer, Chairman 
Yifat Steuer, CFO 
 
Turner Pope Investments (Broker)   [phone] 
James Pope 
Andy Thacker 
 
Tavistock (Public Relations)       [phone] 
Heather Armstrong                  [e-mail] 
Katie Hopkins 
 

About Graft Polymer

Graft Polymer is a UK incorporated holding company with an innovative research and manufacturing facility, based in Slovenia. The core business of the Group comprises polymer modification and drug delivery systems developments. Established in 2017, the Group has already introduced more than 50 products to the market.

The Group has developed a proprietary set of polymer modification technologies, which can improve existing products and processing methodologies by enhancing performance, simplifying manufacturing, reducing material consumption, widening the choice of feedstocks, and reducing costs.

In particular, the Group's techniques allow the combination of otherwise incompatible polymers, facilitating the creation of polymer composites engineered at a molecular level, that combine the attractive properties of different input materials. This enables customers to receive a synergism of properties in polymer composites.

The solutions and products offered by the Group are designed to improve performance, reduce raw materials consumption, and enhance the physical characteristic values of finished products or improve or modify their chemical interaction. In the past several years, there has been increased emphasis by the industry as a whole on applications of grafted polymers, which are produced by monomers being covalently bonded and polymerised as side chains onto the main polymer chain (the backbone).

In 2020, the Group launched a new division named GraftBio to develop IP for Bio/Pharma applications. This includes a drug delivery system to support and provide solutions to the market, which had been heavily impacted by the COVID-19 pandemic. The GraftBio division has been granted HACCP certification for its production facility. The Group has developed a set of drug delivery platforms that enable it to licence its DDS platform (IP) to MGC Pharmaceuticals Limited ("MGC"; LSE: MXC) in relation to MGC's CimetrA(TM) and CannEpil-IL(TM) products. The Group expects to receive royalty payments resulting from the sale by MGC of CimetrA(TM) and CannEpil-IL(TM) products.

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June 20, 2022 02:00 ET (06:00 GMT)