Sale of HTS spin-off will help it grow - IRL

Friday 1st April 2011

A state science company says its sale of a key spin-off company using New Zealand superconducting technology in powerful electromagnets will help the company grow.

Industrial Research Ltd (IRL) chief executive Shaun Coffey said today that sale of a controlling stake in its associate company HTS-110 to Dunedin-based Scott Technology will enable the superconductor company to rapidly expand.

Endeavour Capital, the fund manager for the government's venture investment funds, sold its stake to Scott, and IRL and a United States investor, American Superconductor Corporation, diluted their shareholdings but each retained an interest.

Scott Technology, best known as a manufacturer of robotic meat processing machinery, has said it is looking at a rights issue to help fund the deal, expected to cost it $4.4 million for almost 51% of HTS-110.

Companies Office records today showed the key shareholders to be IRL (1.2 million shares), Scott Technology (879,000), EIP Nominees (837,000) and American Superconductor (460,000).

Applications for HTS-110's products range from cutting-edge nanotechnology to the manufacture of ultra-high capacity computer hard drives, and from accelerated drug development to increasing yields in biofuel plants.

Coffey said HTS-110 had been growing rapidly and it was now "appropriate" to transfer it to an ambitious New Zealand firm.

He suggested in February that the Government should subsidise supply of key components - such as IRL's high-temperature superconductor cable - to local manufacturers to build an export industry around more efficient electric devices.

IRL plans to shift the balance of its revenue sources to a 50:50 split between taxpayer funding and private enterprise clients. At present, its $62 million revenue is mainly made up of government funding, $45.2 million, with only $16.7 million from corporate clients.

Coffey said today that IRL would continue its superconductivity research and support to HTS-110.

Scott Technology managing director Chris Hopkins said that in the short to medium term HTS-110's strategy was to grow its market footprint, target industrial users and create alliances in selected industries.

Superconducting technology enables the transmission of electricity without resistance or the loss of energy. It can also be used to generate strong magnetic fields. HTS-110's magnets can use this technology in products ranging from cutting-edge nanotechnology to the manufacture of ultra-high capacity computer hard drives, and from accelerated drug development to increasing yields in biofuel plants.

The global market for superconducting applications has been estimated to be worth several billion dollars in the coming decades.

NZPA

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