Arq Secures Second Contract for its Granular Activated Carbon (GAC) Facility
Arq has secured a new contract for 4 million pounds of Granular Activated Carbon (GAC) annually, beginning January 2025. This follows a previous 5 million pound per year contract announced in May 2024. Combined, these contracts utilize 36% of the Red River facility's 25 million pounds per year capacity, set to come online by year-end 2024. Arq's latest deal targets air purification markets, highlighting industry confidence in their GAC solutions. CEO Bob Rasmus emphasized the importance of these agreements in meeting market demand and advancing their environmental technology. Conversations with potential customers are ongoing, with expectations to fully contract capacity before production begins.
- Arq secured a new contract for 4 million pounds of GAC annually.
- This second contract follows a 5 million pound per year agreement announced in May 2024.
- Combined contracts utilize 36% of Red River's 25 million pounds per year capacity.
- The Red River facility is due to come online by year-end 2024.
- The new contract focuses on air purification markets, validating product versatility.
- Early contracting indicates strong market demand and confidence in Arq's technology.
- Potential to fully contract capacity before production begins.
- Dependency on the Red River facility coming online as planned by year-end 2024.
- Risk of not securing full capacity contracts before production begins.
Insights
Arq securing two major contracts within a short period is a **solid indicator of market demand** for their granular activated carbon (GAC) products. The cumulative volume of 9 million pounds per year represents **36% of the Red River facility's capacity** even before its commission. This allows the company to have a **better cash flow projection** and operational predictability. From a financial standpoint, **pre-secured contracts** significantly de-risk the investment and operational startup of the new facility, suggesting a **strong ramp-up trajectory** that can be reassuring for investors.
Moreover, the announcement mentions the GAC's applications in air and water purification—fields driven by increasing regulations and environmental concerns. Diversifying their client base also provides a **buffer against market fluctuations** in any single sector, enhancing overall business stability.
In financial terms, these deals could translate into greater **top-line revenue growth** and potentially higher profit margins given the efficiency and scale of the Red River facility. However, investors should keep an eye on **execution risk**, especially around the facility coming online and meeting quality and delivery standards.
The specialty markets of air and water purification Arq is targeting are witnessing **increasing demand**. Environmental regulations concerning contaminants like PFAS and industrial air quality standards are **tightening globally**, which bodes well for companies like Arq. The **growing focus on sustainability** and compliance will likely provide a steady demand backdrop.
Securing contracts in different verticals—one in water treatment and another in air purification—highlights the **versatility of Arq’s GAC products**. This diversified application is a strategic advantage, reducing dependency on a single sector and aligning with broader market trends toward environmental sustainability. Additionally, pre-commissioning contracts signal **strong market validation** of their products, which can further attract potential clients and investors.
One potential risk is whether Arq can **maintain product quality and meet diverse client specifications** across these sectors. They'll need to manage customer relationships well to capitalize fully on these opportunities.
The announcement states that Arq’s GAC products are recognized for their **high quality and environmental technology**. The environmental benefits of using GAC include **effective removal of contaminants** from air and water, which is increasingly critical to regulatory compliance and sustainability goals. This positions Arq favorably in a market that values **sustainable and efficient purification solutions**.
Arq’s entry into air purification, in particular, represents a notable expansion. Air quality is a significant environmental and public health concern and the ability to **capture volatile organic compounds (VOCs) and other air pollutants** positions Arq as a key player in a growing market. The emphasis on domestic manufacturing also resonates well with current trends favoring **local production and reduced supply chain dependencies**.
However, the company must continue to innovate and possibly address **emerging contaminants** to stay ahead of the curve. The proactive move to secure contracts indicates a forward-thinking approach, but continuous advancements in technology and applications will be essential for sustained success.
New customer contract for 4 million pounds of GAC per annum in specialist market
GREENWOOD VILLAGE, Colo., June 18, 2024 (GLOBE NEWSWIRE) -- Arq, Inc. (NASDAQ: ARQ) (the "Company" or "Arq"), a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials, today announced its second major sales contract for the supply of GAC to be produced from its strategic Red River facility.
This agreement, with a company specializing in the manufacturing of personal and industrial air purification devices, has a commencement date of January 2025 and scales up to an ultimate run-rate requirement of 4 million pounds of GAC per year.
This second GAC contract is in addition to the 5 million pound per year agreement announced in May 2024 (here). At its 4 million pound per annum run-rate and in conjunction with the previously announced contract, these two agreements reflect approximately
Bob Rasmus, CEO of Arq, remarked, “This second contract is not just a win for Arq, it’s a testament to the industry’s confidence in our GAC solutions and strategic vision. Our first contract was with a North American solutions provider of water and wastewater treatment, principally addressing the PFAS market. This latest contract is focused on specialized air purification, underscoring the market’s recognition of our superior product, the value of our environmental technology and the breadth of our potential industry applications. We’re proud to continue to provide transparency regarding contract wins and with
Garrett Chandler, VP Sales of Arq, expressed, “This second agreement confirms our position as a strategic partner to customers who want high quality GAC for specialty products. It’s also a clear indicator of the growing demand for our GAC products across a broad portfolio of applications and the effectiveness of our sales strategy. We’re excited to continue our momentum in a variety of markets to secure additional future sales of our innovative products.”
Joe Wong, CTO of Arq, concluded, “Securing a second contract with attractive terms is a pivotal moment for Arq. It validates our leadership and expansion into GAC solutions in numerous applications. This contract is a powerful endorsement of our product’s performance and our commitment to environmental technology, but we’re excited to keep pushing the boundaries of innovation and work with our customers to provide the best solutions for compliance and sustainability.”
About Arq
Arq (NASDAQ: ARQ) is a diversified, environmental technology company with products that enable a cleaner and safer planet while actively reducing our environmental impact. As the only vertically integrated producer of activated carbon products in North America, we deliver a reliable domestic supply of innovative, hard-to-source, high-demand products. We apply our extensive expertise to develop groundbreaking solutions to remove harmful chemicals and pollutants from water, land and air. Learn more at: www.arq.com.
Caution on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a “safe harbor” for such statements in certain circumstances. When used in this press release, the words “can,” “will,” "may," “intends,” “expects,” "continuing," “believes,” similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements. All statements that address activities, events or developments that the Company intends, expects or believes may occur in the future are forward-looking statements. These forward-looking statements include, but are not limited to, statements or expectations regarding: business strategy, expectations about future demand and pricing for our PAC and GAC products and our ability to enter into new markets, the estimated costs and timing associated with potential capital improvements at our facilities, potential production outputs thereafter, expected market supply of GAC products and the cost savings and environmental benefits of our GAC products, and the timing and scope of future regulatory developments and the related impact of such on the demand for our products. These forward-looking statements involve risks and uncertainties. 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, timing of new and pending regulations and any legal challenges to or extensions of compliance dates of them; the U.S. government’s failure to promulgate regulations that benefit our business; changes in laws and regulations, accounting rules, prices, economic conditions and market demand; impact of competition; availability, cost of and demand for alternative energy sources and other technologies; technical, start up and operational difficulties; competition within the industries in which the Company operates; our inability to commercialize our products on favorable terms; our inability to effectively and efficiently commercialize new products; changes in construction costs or availability of construction materials; our inability to effectively manage construction and startup of the Red River GAC Facility or Corbin Facility; our inability to obtain required financing or financing on terms that are favorable to us; our inability to ramp up our operations to effectively address recent and expected growth in our business; loss of key personnel; ongoing effects of the inflation and macroeconomic uncertainty, including from the ongoing pandemic and armed conflicts around the world, and such uncertainty's effect on market demand and input costs; availability of materials and equipment for our business; intellectual property infringement claims from third parties; pending litigation; as well as other factors relating to our business strategy, goals and expectations concerning the Arq Acquisition (including future operations, future performance or results); our ability to maintain relationships with customers, suppliers and others with whom it does business and meet supply requirements, or its results of operations and business generally; risks related to diverting management's attention from our ongoing business operations; costs related to the Arq Acquisition; opportunities for additional sales of our AC products and end-market diversification; the timing and scope of new and pending regulations and any legal challenges to or extensions of compliance dates of them; our ability to meet customer supply requirements; the rate of coal-fired power generation in the U.S., the timing and cost of capital expenditure, as well as other factors relating to our business, as described in our filings with the SEC, with particular emphasis on the risk factor disclosures contained in those filings. You are cautioned not to place undue reliance on the forward-looking statements and to consult filings we have made and will make with the SEC for additional discussion concerning risks and uncertainties that may apply to our business and the ownership of our securities. In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this press release. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise. The forward-looking statements speak only as to the date of this press release.
Source: Arq, Inc.
Investor Contact:
Anthony Nathan, Arq
Marc Silverberg, ICR
investors@arq.com
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