Advanced Emissions Solutions Signs Contract for Construction of Granular Activated Carbon Expansion at Red River Plant with Wieland
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Insights
The announcement by Advanced Emissions Solutions, Inc. regarding the mobilization of their construction team and the anticipated completion of their Granular Activated Carbon (GAC) facility expansion by Q4 2024 is a significant development in the environmental technology sector. The GAC market in North America is currently undersupplied, which positions ADES favorably as they expand their production capacity.
With the construction of the Red River plant, ADES is set to increase its output by 25 million pounds, which could substantially increase their market share and potentially lead to valuable sales contracts. This expansion aligns with the growing demand for purification solutions, driven by stricter environmental regulations and heightened public awareness of pollution issues.
However, the project's cost overrun of approximately 20% due to inflation and timing issues is a concern. Investors should monitor ADES's ability to manage these increased costs through its capital, cash flow and cost reductions. If managed effectively, this could strengthen the company's financial position and investor confidence.
From a financial perspective, the cost-plus contract with Wieland Davco Corporation mitigates some risk as it allows for transparent accounting of expenses plus a pre-agreed profit margin. However, the cost escalation from the initial estimate could impact Advanced Emissions Solutions, Inc.'s profit margins and return on investment for the expansion project.
Investors should consider the company's current capital and projected cash flow to assess whether ADES can absorb the increased costs without compromising its financial stability. The company's assertion that the cost increase is manageable is reassuring, but the actual impact will be clearer once the project progresses.
The timely completion of the Corbin facility and its role in supplying feedstock for the Red River plant is crucial. Delays or budget overruns in Corbin could have a knock-on effect on the Red River project's profitability and timeline.
Granular Activated Carbon (GAC) is a critical material used for removing contaminants from water, air and soil. The expansion of the GAC facility at Red River is a strategic move by ADES to capitalize on the undersupplied market in North America. Producing more GAC not only benefits the company financially but also contributes to environmental sustainability by providing essential materials for pollution control.
The use of recycled bituminous coal waste feedstock from the Corbin facility demonstrates ADES's commitment to sustainability and could provide a competitive edge in an industry that values eco-friendly practices. This approach can also potentially reduce raw material costs and minimize environmental impact, aligning with the global push towards circular economies.
Construction team has been mobilized and completion of the 25 million pound expansion is anticipated in Q4 2024
GREENWOOD VILLAGE, Colo., Jan. 24, 2024 (GLOBE NEWSWIRE) -- Advanced Emissions Solutions, Inc. (NASDAQ: ADES) (the "Company" or "ADES"), an environmental technology company producing activated carbon and other unique carbon solutions for use in water, air and soil purification, and sustainable materials, today announced that it has executed the contract with Wieland Davco Corporation (“Wieland”) for the construction of its strategic Granular Activated Carbon (“GAC”) facility at its Red River plant in Coushatta, LA (“Red River”).
Mobilization of construction operations has already commenced and the mechanical completion of the project is anticipated by Q4 2024, as forecasted. The contract is being executed by Wieland on a “Cost-Plus” basis. The Company estimates that total construction and equipment costs at Red River will be in the range of
Separately, the Company is pleased to announce that all major construction work at its Corbin facility in Kentucky, which will provide the recycled bituminous coal waste feedstock for Red River, remains on track to be completed on time and within budget. Corbin commissioning activities will begin in March 2024.
“This expansion is a transformational project towards becoming a material producer of GAC and is well underway. We look forward to selling our first product in 2024,” said Robert Rasmus, CEO of ADES. “As we observe a materially undersupplied GAC market in North America, I am optimistic that we will deliver valuable sales contracts against the 25 million pound expansion in the coming months and well in advance of Q4 2024. We will update the market accordingly.”
“Since joining ADES in September 2023, I have been impressed by the determination of our operational team to drive this project forward,” added Deke Wiliamson, COO of ADES. “With Corbin basically complete, today marks the start of a very busy year for ADES at Red River and I am pleased that we will be joined in this endeavour by our partners at Wieland. Together with the broader team, I am looking forward to delivering this project safely, on time and on budget.”
Ryan Roberts, Vice President/Regional Director of Wieland, added: “We have a long pedigree of successful construction in Louisiana and we are delighted to have been successfully chosen to build this project at Red River. We are dedicated to excellence in construction for our customers and we look forward to delivering on this with ADES.”
About Advanced Emissions Solutions, Inc.
Advanced Emissions Solutions, Inc. serves as the holding entity for a family of companies that provide emissions solutions to customers in the power generation and other industries.
ADA brings together ADA Carbon Solutions, LLC, a leading provider of powder activated carbon ("PAC") and ADA-ES, Inc., the providers of ADA® M-Prove™ Technology. We provide products and services to control mercury and other contaminants at coal-fired power generators and other industrial companies. Our broad suite of complementary products control contaminants and help our customers meet their compliance objectives consistently and reliably.
CarbPure Technologies LLC, (“CarbPure”), formed in 2015 provides high-quality PAC and granular activated carbon ideally suited for treatment of potable water and wastewater. Our affiliate company, ADA Carbon Solutions, LLC manufactures the products for CarbPure.
FluxSorb, LLC, formed in 2022, is an emerging technology company that introduces highly engineered activated carbons with a focus on the emerging remediation markets. Our vision is to partner with our customers to collaborate, develop and deploy best in class activated carbon solutions to meet even the most extreme challenges.
Arq is an environmental technology business founded in 2015 that has developed a novel process for producing specialty carbon products from coal mining waste. Arq has the technology and large-scale manufacturing facilities to produce a micro-fine hydrocarbon powder, Arq powder™, that can be used as a feedstock to produce activated carbon and as an additive for other products.
Caution on Forward-Looking Statements
Statements in this press release regarding the Company that are not historical facts, including statements concerning the Company’s business relationship with Wieland, the estimated costs and timing associated with construction, equipment costs for potential capital improvements at our facilities, sources of financing for the proposed construction and potential production outputs thereafter, are forward-looking statements within the meaning of applicable securities laws and regulations that involve risks and uncertainties and are not guarantees of future performance. Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors including, but not limited to, the costs of raw materials and supplies, costs of labor, changes in scope of work or other unexpected modifications of construction, inflationary pressures, the Company’s ability to achieve expected cash flows and cost reductions as well as other factors relating to the Company’s business, as described in our filings with the SEC, with particular emphasis on the "Risk Factors" in the Company's most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q and other subsequent filings with the Securities and Exchange Commission. You should not place undue reliance on the forward-looking statements, which speak only as of the date made. The Company undertakes no duty to update any forward-looking statement that it may make, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.
Source: Advanced Emissions Solutions, Inc.
Investor Contact:
Alpha IR Group
Ryan Coleman or Chris Hodges
312-445-2870
ADES@alpha-ir.com
FAQ
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