Expanded PAC Volumes Commence for $24M Reworld Contract

Carbonxt Group Ltd (ASX:CG1) (‘‘Carbonxt” or “the Company”) is pleased to announce that it has commenced the delivery of additional Powder Activated Carbon (“PAC”) volumes to Reworld, a global leader in sustainable waste solutions, from its Black Birch facility in Swainsboro, Georgia.

• Expanded PAC Delivery to Reworld: Carbonxt has commenced full-scale delivery of additional Powder Activated Carbon (PAC) volumes to Reworld from its Black Birch facility, supporting Reworld's emission control efforts across 17 U.S. waste-to-energy plants.
• First deliveries under Carbonxt’s 4-year, $24m contract extension with Reworld, which will generate annual revenues of ~$6m for the duration of the contract with a significant uplift in gross margins for the Black Birch facility
• Resilience Post-Hurricanes: Despite the impact of Hurricanes Helene and Milton, the Black Birch facility experienced only a brief outage and sustained no significant damage, allowing Carbonxt to quickly resume operations and meet delivery commitments.

All amounts are in AUD unless otherwise stated.

This marks a critical milestone in the Company’s previously announced contract extension with Reworld, which now encompasses a larger portion of their PAC supply for use in 17 waste-to-energy plants across the U.S. The PAC, manufactured at Carbonxt’s Black Birch plant, is a key component in Reworld’s efforts to meet stringent mercury, dioxin, and furan emission regulations while supporting their broader sustainability goals.

The additional PAC deliveries form part of Carbonxt’s 4-year, $24m contract extension with Reworld, with first shipments completed in line with the planned October commencement date (refer ASX Announcement 22 July 2024). A key decision factor for Reworld in extending its contract was the sustainable nature of Carbonxt’s PAC products, which aligns strategically with Reworld’s move away from fossil fuels and its focus and commitment to advancing zero waste initiatives and meeting its sustainability objectives.

The contract is valued at around $6 million annually, with the additional volume delivery representing a significant scale-up for Carbonxt’s operations. The Company has optimized the Black Birch facility to handle the increased demand, implementing new efficiencies and ensuring a consistent, high-quality PAC supply to support Reworld’s emission control systems.

Update on Business and Manufacturing Operations Post-Hurricanes Helene and Milton

Carbonxt is also pleased to report that despite facing two recent major weather events, Hurricane Helene and Hurricane Milton, the Company’s Black Birch manufacturing facility has resumed full operations with no significant damage.

The plant experienced a short outage during the hurricances, however, there was no long-term impact on production capabilities or the integrity of the facility. Thanks to prompt recovery efforts and robust contingency planning, the facility was back online swiftly, allowing Carbonxt to continue fulfilling its delivery obligations with minimal disruption.

As part of its long-term collaboration, Carbonxt will continue to work with Reworld through their Preferred Supplier Program and in joint sustainability initiatives, including the development and acquisition of renewable energy credits.

Comment

Managing Director Warren Murphy said: “We are thrilled to have successfully ramped up production at Black Birch and to now be delivering the increased PAC volumes to Reworld. This contract underscores the strength of our renewable PAC products and the trust that Reworld has placed in our capabilities. We look forward to continuing our partnership as a key supplier of PAC product to assist Reworld in meeting their emissions targets and achieving their long-term sustainability objectives.”

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