30 August 2007

UK: Hemp producer gets GBP 2.6 million investment

Hemcore to expand production of hemp-based building materials

The investment company Low Carbon Accelerator (LCA) has announced that it has made an investment of GBP 1,088,000 (approx. EUR 1.6 million) in Hemcore, the UK’s largest grower and processor of hemp, for a 30% equity stake. The investment was part of an overall GBP 2.6 million (about EUR 3.8 million) funding round led by LCA.

Around 1,000 hectares are being farmed for Hemcore under contract. No agro-chemicals are used in its production. Hemcore has revived this practice to produces low carbon raw materials for a wide range of industries that currently include selling the fibre into the European automotive industry for use in internal panels to replace glass and synthetic fibres, while the shiv, the woody part of the hemp plant, is sold as horse bedding.

The investment from Low Carbon Accelerator and the other investors will enable Hemcore to purchase and install a new operating plant in order to expand rapidly its operations and increase its range of products, and in particular to grow sales of the recently launched natural fibre insulation product being sold under the “Breathe” brand name.

Potential shiv market in the building industry
Hemcore is also excited by the potential market opportunity for shiv in the construction industry. The product can be mixed with a special lime, Tradical HB®, to make Hemcrete®, a material which can be used to improve the thermal efficiency of buildings. Hemp absorbs a significant amount of CO2 from the atmosphere as it grows which is then locked up in the structure for the life of the building, resulting in these having far lower carbon footprints than buildings that are constructed using conventional techniques. Hemcore estimates that approximately 30 to 45 tonnes of carbon dioxide could be saved in the walls of a typical family house if Hemcrete is used in place of conventional materials.

Options are also being explored to develop a light weight particle board made from shiv that would be used as loft board, work tops and furniture.

Low Carbon Initiative’s CFO will join Hemcore board
Andrew Newman, CFO of Low Carbon Initiative Limited, LCA’s investment manager, said: “As an investor in low-carbon buildings, we feel it is essential to look at the whole supply chain of construction materials, not just the finished building. Hemcore shows that low-impact, low-input agriculture can provide these materials. The market for these products is already large, so, just as with their crops, we look forward to watching this company grow.” Mr. Newman will be joining the board of Hemcore.

Mike Duckett, Managing Director of Hemcore said: “We welcome this injection of capital to boost our production. The demand for products derived from the versatile hemp plant is growing rapidly. Without the support of LCA this new exciting market could not be exploited to its full potential. We have always believed that British agriculture should diversify into non-food and sustainable alternative crops. Our business model shows how we can benefit British agriculture and British industry at the same time, while maintaining a low-carbon edge in both.”

About Low Carbon Accelerator
Low Carbon Accelerator Limited is a closed ended investment company created to invest in a portfolio of fast-growing low carbon businesses. The Company listed on the AIM Market of the London Stock Exchange on 11 October 2006, raising GBP 44.5 million.

The Company’s investment objective is to provide shareholders with an attractive return on their investment primarily through significant minority (predominately 25% and above) holdings in a diverse portfolio of unquoted private companies providing low carbon products and services.

The Company will initially invest principally in companies based in the UK, Europe and the US, which provide low carbon products and services across the following sectors:

  • Buildings (sustainable building materials, heating, lighting, clean air and water technologies for industrial, commercial and/or residential use)
  • Fuels (bio-fuels, low carbon fuels, catalysts and additives)
  • Energy efficiency (reductions in energy inputs at source, improved conversion and reductions at point of use)
  • Energy generation (sustainable and clean energy, micro and distributed generation)

The Company’s investment strategy is to target trading businesses with patentable technologies and products with a clear commercial application and the opportunity to gain a large market share of a new or expanding market. The Company focuses on businesses with experienced management teams who have developed commercially viable products providing easily adoptable solutions which deliver immediate reductions in carbon dioxide emissions.

Press release as PDF-document

(Cf. news of 2007-03-22, 2006-08-02 and 2007-06-04.)

Source: Carbon International, press release, 2007-07-18.

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