Notes and reflection on the Calix investor presentation this week.

Just to follow on from others, here are my thoughts on this week's presentation.

I didn’t know much about Calix before viewing the presentation other than I’d heard they were doing something with low-emission cement. I’m currently exploring companies in the cleanttech/renewable space so thought I’d listen in.

I wasn’t expecting it to run for nearly 2.5 hours(!) but there was plenty to cover.

One thing that struck me was the enthusiasm of the team. This is hard to quantify (can’t really plug it into a valuation model) but the tone was different to many other presentations I’d heard. There was a real sense of drive. That’s not enough on its own to grow a business but definitely helps.

Calix calls itself a technology business. They have a novel kiln which can heat powdered materials up to ~900?. Carbon dioxide is vented from the kiln and can be captured (and sold or sequestered). The kiln is fuel-agnostic, so can be powered by zero emission electricity.

They have a dizzying array of opportunities and applications where they believe this kiln process can be utilised. The core areas are:

• Water treatment
• Co2 mitigation
• Biotech
• Batteries
• Sustainable processing

Water treatment is the most developed and is currently an actual business for them. They provide magnesium hydroxide liquid to water treatment plants as a safe and sustainable alternative product to conventional products. They bought US business to distribute this in North America and appears to be growing well. Plans to expand into the aquaculture market in Asia have been delayed by COVID.

CO2 mitigation is also advancing with pilot plants in Europe that involve fitting the Calix kiln (called CFC) to cement plants. Smaller test facility LEILAC-1 has concluded successfully. Currently funded by the EU and industry to build LEILAC-2 through to 2023. LEILAC-3 to follow which is expected to be a full scale facility. Clearly this is a large market if they can pull it off, but still some years away.

Biotech involves using the magnesium products for crop protection and marine anti-fouling. Promising test results in both areas but from what I understand no commercial activity here yet.

Advanced batteries involves developing a magnesium based cathode for lithium ion batteries. Very early stage and they expect to have more testing conducted next year. No doubt battery demand is only going up, but again this is pretty early stage.  

It all looks very interesting, and there are clearly large opportunities in these markets.  It’s impossible to say how many of these ventures will pay off. With increasing demand for decarbonisation technology in the coming years I’m going to follow Calix with interest. They already seem to have successfully engaged partners for joint ventures and funding which is encouraging.