Western Australian companies Quickstep Holding Ltd and Vortex Pipes Ltd have announced a joint venture to develop and market a new generation of high end pressure pipes, featuring improved strength and corrosion resistance.
Western Australian companies Quickstep Holding Ltd and Vortex Pipes Ltd have announced a joint venture to develop and market a new generation of high end pressure pipes, featuring improved strength and corrosion resistance.
Full announcement below:
International advanced composites group Quickstep Holdings Limited (ASX: QHL - "Quickstep") and listed Australian-based integrated piping solutions provider, Vortex Pipes Ltd (ASX: VTX - "Vortex"), have joined forces to develop and market a new generation of high-strength, corrosion resistant pipes to be manufactured using Quickstep's patented composites manufacturing process.
The two companies announced today (Thursday) that they had finalised a Joint Venture agreement, bringing together their respective strengths in composite manufacturing technology and pipe-lining and manufacturing solutions to deliver a 'next generation' product, offering significant competitive advantages to infrastructure groups and asset managers over existing alternatives.
The Joint Venture project, which will operate under the name "QuickPipes", will commence work immediately focused on the development of a range of high-end composite pressure pipes.
The Joint Venture will initially be established on an 80:20 (Vortex::Quickstep) basis, with Quickstep contributing its technology and know-how, as well as a suitable Quickstep QS20 composites production machine. Vortex (previously known as 'ShieldLiner') will contribute its composites pipe-lining and manufacturing technology, industry contacts and know-how in the specialised fields of pipe cleaning, pipe rehabilitation and fibreglass pipe provisioning.
Vortex will be responsible for stage 1 funding of the Joint Venture. Vortex is in discussions with the Victorian Centre for Advanced Materials Manufacturing Ltd (VCAMM) regarding research funding opportunities through their associations with Co-operative Research Centres (CRC's) and other government backed organisations.
It is anticipated that pipeline manufacturing using Quickstep's patented fluid-based technology would lead to a range of significant benefits, including improved strength and corrosion resistance in the pipes, as well as reduced manufacturing costs through faster processing times.
In addition, due to the portability of Quickstep's manufacturing equipment, QuickPipes would provide customers with the ability to manufacture and "meld" sections of pipe on-site, rather than having to ship the finished product from the manufacturer, leading to a substantial reduction in the logistics costs currently incurred. The potential ability to "meld" joints on-site is also seen as a significant benefit in providing a fully sealed pressure pipe solution.
Initial Proof of Concept ("POC") carbon fibre pipes have already been produced by VCAMM (Quickstep's joint venture partner at Deakin University) in conjunction with Vortex and show exceptional strength-to-weight ratios when compared to current market offerings and traditional steel and concrete reinforced pipes. These POC pipes were exhibited at the JEC Show, the world's largest composites conference in Paris, attracting significant interest from the international composites industry.
The Managing Director of Vortex, Mr Trevor Gosatti, said the application of advanced composite technology in pipe manufacturing was becoming increasingly prevalent, as infrastructure asset owners recognised the improved 'whole-of-life' cost of these products.
"Vortex is receiving increasing enquiries from customers interested in alternatives to traditional steel pipe, who face large cost increases due to the increasing raw material costs," Mr Gosatti said.
"While the industry is currently dominated by steel pipes due to their historical manufacturing base, we are seeing an increasing move towards composite pipe products due to their improving cost viability, reduced maintenance costs and longer lifespan. I believe the development of a new generation of advanced composite pipe cured using the Quickstep Process could see the beginning of an industry shift towards advanced composites particularly in specialist large diameter steel pipe replacement," he continued.
Mr Gosatti also said the portability of Quickstep's manufacturing equipment would be a significant benefit for QuickPipes.
"At the moment, customers are shipping fully completed pipes which are large and require a considerable amount of space when being transported - most of which is just vacant space within the pipe," Mr Gosatti commented. "Because Quickstep's machines are portable, we can simply ship Quickstep's manufacturing equipment closer to the site and manufacture the pipes when and where they are required. This would save customers a substantial amount in logistics and transportation costs, further enhancing the attractiveness of QuickPipes products."
For Quickstep, the Joint Venture represents an opportunity to leverage its composites manufacturing technology in a substantial growth market in the multi-billion dollar pipes infrastructure sector, without compromising its continued focus on securing major long-term manufacturing contracts and Joint Ventures in its priority target market, the aerospace sector.
Quickstep's Managing Director, Mr Nick Noble, said the QuickPipes Joint Venture had the potential to open up a significant new global market for the application of Quickstep's manufacturing technology.
"Working together with Vortex, our aim is to develop a very strong and light advanced composite pipe such as a carbon fibre pipe, that would be easier to lay and longer lasting than existing products," Mr Noble said. "I believe the Quickstep Process can deliver significant benefits in pipe manufacturing, which could lead to an important new customer base for Quickstep."
"The Quickstep Process has the potential to bring about a step-change in the manufacture of high-pressure pipes, offering an alternative to traditional materials such as steel and steel reinforced concrete, which have experienced significant cost increases and availability issues in the current booming world economic environment," he continued.
The first stage of the Joint Venture will explore the use of the Quickstep Process to cure various pipes using a range of fibres and resins. The proving of the improved pipe properties expected using this process will allow detailed market research on the large potential for this product worldwide. This will be followed by the construction of the first QuickPipes manufacturing plant. The expected investment for Stage 1 of the project is a value of up to $750,000.
It is expected that QuickPipes could produce early cash flow for the Joint Venture by the end of 2008/09 through the development and production of niche fittings for existing markets, and could produce commercial-ready lengths of finished pipe by the last quarter of 2009.
