Hydrodec's Ohio refinery back up and running

Hydrodec Group announced its return to the US transformer oil market, with strong sales of Superfine transformer oil from its rebuilt and expanded plant at Canton, Ohio, to customers in the US and Mexico.

The oil and chemical technology provider said the Canton plant has produced transformer oil since 24 September and it expects to increase production from the first four trains to operating design capacity of around 70,000 litres a day.

In July, Hydrodec said production from the refinery in Canton had to be stopped in the early stages after commissioning as a result of “equipment integrity issues”.

Hydrodec said the plant itself is on track to deliver 10m litres of processed oil this year, as previously advised, and it is expected to be cash-generative from an operating perspective by the end of 2015.

In addition, the company said that in order to reinforce its short-term working capital position during the ramp-up of production at Canton, it has inked a short-term working capital facility agreement with non-executive director Andrew Black.

The facility is for up to £1.35m with interest payable at 7% per year on drawn-down funds on normal commercial terms and is repayable at any time. It is secured over the company's licence of and rights to develop the CEP lubricant oil re-refining technology in the UK.

Chief executive Ian Smale said: "We are confident that the rebuilt and expanded plant has a unique market proposition and will be well placed in 2016 to leverage the production of the highest quality transformer oil produced in the US, meeting all US and international standards.

“The additional working capital facility reinforces the company's short term working capital position and ensures that Hydrodec's North American business remains adequately funded during the important ramp up of production from Canton."

At 1300 BST, Hydrodec shares were up 2.6% at 6.80p.