Friday, May 30, 2014

Doors Open for Catacel

Advances in well drilling technology have opened a series of doors for U.S. natural gas producers in the shale fields.  Natural gas deposits once thought economic to exploit are now driving profits for a number of a players all down the supply chain.  Investors usually focus on public companies, for good reason, since these afford easy participation by minority investors by simply buying shares in a public offering or on a stock exchange.

From time to time I see private companies that look promising.  Based in Ohio Catacel Corporation has a history in the catalytic converter business.  The company’s engineers have very cleverly applied their knowledge of metal substrates to hydrogen formation and fuel cells.  Catacel shapes special metal foils into a variety of geometries, then coats the foils with different catalysts designed to enable specific reactions within specific environments.  The novel technology helps save energy by streamlining processes and helps extend the useable life of plant equipment.

Catacel supplies a menu of catalytic materials and devices to fuel cell manufacturers.  Both steam and dry reforming hydrogen plants can also count on Catacel for high performance reforming catalyst solutions.  Although exact details of financial performance are not made public, Catacel’s president recently suggested the company could record $5 million in sales in the current year.

NASA’s Spin Off magazine gave Catacel some excellent press this last week, citing the company as potentially important partner beyond the NASA programs that Catacel has been supporting with its catalyst materials.  With the enthusiasm built up for fuel cells powered by natural gas-based hydrogen, it is likely Catacel will gain traction in that market as well.  The Catacel ‘stackable structural reactor’ replaces the loose ceramic catalyst media in the stationary steam reforming process that has been used for many years to produce hydrogen from natural gas. Current technology requires that the ceramic catalyst bed be replaced every three to five years due to mechanical degradation of the media.  Catacel’s reactor eliminates the need for a replacement cycle, potentially saving natural gas reformers significant capital.

Catacel is a small company, but with a product line that offers highly competitive technologies and clear economies, it is not likely to go unnoticed for long.  Even if the company never attains sufficient size to support its own initial public offering, it could be a nice plum for acquisition by an already public company.  Catacel is included in the Mothers of Invention Index sponsored by my firm Crystal Equity Research.  I will be watching for future developments.


Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.  Catacel is included in the Materials Group of our Mothers of Invention Index for innovation in energy conservation and efficiency.



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