(BFM Bourse) – Identifying in the company a potential nugget in the treatment of hazardous waste, the buyer of Europlasma Jérôme Garnache-Creuillot, at the helm since 2019, explains why he launched such a challenge and details the ambitions of the firm, hoping to quickly achieve profitability at the operational level.
BFM Bourse: Europlasma is one of the painful issues on the Parisian coast. The plan to produce electricity while eliminating waste using plasma torch technology never really worked and the company went into receivership. Via your company Zigi Capital, you were the only candidate for the takeover under the continuation plan. What motivated you to take over the company?
Jérôme Garnache-Creuillot: We quickly understood that we had to give up on advanced gasification because the energy efficiency of the process was not there, which not only made it a financial pitfall (hardly profitable even assuming subsidized electricity sales tariffs), but was also not ecologically satisfactory because it produced soot which was more polluting than the waste used as fuel. As we indicated at the time, even investing an additional 30 million euros it was not possible to guarantee the improvement of the process to an optimal level. On the other hand, from the outset we were convinced that Europlasma was a potential nugget with regard to the considerable market for depollution and treatment of hazardous waste. This is opening up, supported by very powerful engines – notably the ban on landfilling which was decided in China and which is gradually arriving in Europe. Therein lies a colossal opportunity. On the management of asbestos alone, France has needs of 300,000 tons per year whereas we are today with Inertam at a treatment capacity of 6,000 tons per year – and we also have the possibility of treating waste from abroad (Switzerland, Italy or Luxembourg in particular) because Europlasma is the only company to have an ecologically operational solution for final destruction within the meaning of the Basel Convention. This is why we also decided more recently to prepare waste from economic activity [la fraction des déchets qui ne peut être recyclée ou valorisée de façon traditionnelle, NDLR] on behalf of industrialists or communities one of our axes of development. The principle is to transform this waste into Solid Recovered Fuels that cement factories or other industrialists can then use as a substitute for fossil energy in order to reduce their carbon footprint.
But why did you present such a generous offer, keeping all the staff, rather than waiting for the liquidation to buy back only the tangible assets?
Jerome Garnache-Creuillot : Recovering three turbines at a bargain price would not have made sense: what we wanted to take back was an industrial tool which would be able to find its economic profitability with a little investment and above all know-how capable of allowing the expansion of the Group’s scope of action. For this, it was necessary to have a fully operational demonstrator, but if the company had closed the administrative authorizations also fell, we lost the employees, going up something equivalent would have taken years. On the balance sheet side, I knew that it would be possible to neutralize the debt fairly quickly. The continuation plan rather than a cessation of activity also solved the question of the historical stock of asbestos waste – moreover much larger than the 7,000 tonnes announced at the time of the filing of the takeover offers – which would have ended up on the hands of public authorities.
Financially, however, this represents a very heavy burden, which is still felt in the course.
Jerome Garnache-Creuillot : The downward pressure on the stock due to the OCABSA, the only means of financing the first years essential to Europlasma’s recovery, was inevitable. But with the reduction in liabilities for historical waste, which did not generate cash, and the new activities deployed, the use of OCABSAs will serve the creation of value since 75% of the financing program is dedicated to future investments that will boost the profitability of the group. Not everyone necessarily sees that Europlasma has now reduced its debt by 50 million euros and that production is breaking even on its two main areas of activity, the preparation of CSR and the inerting of asbestos! We were aiming to break even in 2022 on the historical scope, this should be the case under an ambitious savings plan. In addition, the group aggregates new, profitable activities, by acquiring a strategic production tool – and as it grows, this reduces the relative weight of structural costs, previously oversized compared to historical production (the holding generated 50% of the costs before the legal proceedings).
Barely saved, Europlasma is now becoming a buyer in its turn: what do you expect from the takeover of Tarbes Industry and the revival of the activity of Forges de Gerzat?
Jerome Garnache-Creuillot : We were looking to develop Europlasma’s base in the recovery of other recycled raw materials thanks to new technologies based on the plasma torch. It was while exploring the possibilities around aluminum – particularly the subject of work carried out in China since 2020 – that we examined the Tarbes Industry file, and we realized almost by chance that this gave us the possibility of manufacturing the electrodes of our plasma torches: only three companies in the world supply plasma torches, two from North America and one from Europe. Until now, this has contributed to significantly increasing costs. Now the takeover of Tarbes Industry gives us unique agility and will very significantly reduce manufacturing costs and lead times. Beyond that, we have the ambition to revitalize a strategic industry for France, as evidenced by the commitments made by the DGA of firm orders for several years, for amounts giving us the financial visibility justifying the acquisition. The takeover of the aluminum hollow body production activity of the former Société Métallurgique de Gerzat also provided us with an impressive level of know-how and skills. The factory had been closed by Luxfer a year before the Covid crisis, which highlighted all the more the strategic interest of maintaining in France a production capacity for cylinders intended for medical oxygen in particular. With the progress made successfully on the treatment of aluminum waste and the integration of Forges, we have a formidable position, going beyond treatment but really in the recovery of waste from aluminum production. .
What are the next challenges for Europlasma?
Jerome Garnache-Creuillot : We are still very small compared to the potential of our markets and one of the main challenges for the company will be its ability to mobilize funds, investments from industry or communities, to finance infrastructures that use our technologies. and which will be much larger than those of Morcenx, like the LOIs already signed in China.
Interview by Guillaume Bayre – ©2022 BFM Bourse
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