how much do we need multiserv

I know people need to vent at times, but I think we've got the message.....

Someone touched earlier on whether APG could/should go it alone with the steel mill pickle liquor/scale processing.
Whilst it would be potentially profitable per plant, the overall outcome would be probably be less favourable.

Multiserv obviously have a foot in the door in the industry. Putting a couple of plants in Aus is all well and good, but we only have about 0.5% of total steel production in this country. We need to roll out into China, Europe, Japan and the US. China produces 500 million tonnes steel and has over 1000 mills. I wouldn't want to see APG learning how to access those markets when others have already gone down that path.

Multiserv would have a number of things that may be delaying any evaluation. The steel prices have obviously plummeted (but starting to pick up in the last few weeks... see
http://business.smh.com.au/business/sinosteel-wants-more-iron-ore-20081216-6zt0.html
That would be affecting mill capital expenditure.
Harsco may have higher % debt equity issues not apparent from the last annual report.

In particular, they may need further convincing that the tail end of the process works consistently. Pickle liquor can already be regenerated back to acid using pyrohydrolysis. The difference with APG's technology is that it metallises the product. They would need to assure themselves that (1) the metallisation is a financially viable feature compared to pyrohydrolysis alone, and (2) the process works consistently. With respect to (1), factors such as the reduction step residence time are crucial in determining the reactor size, and therefore capital cost (it takes up to several hours). We can't see the subtleties of that decisionmaking process from the end of a modem, so are not really in a position to lay blame for perceived delays.

Neither APG or Multiserv have the upper hand, but we are likely to both benefit from a relationship. We have some technology.... they have experience, access and distribution channels.

I think that we also need to remember that the steel mill process is an offshoot to the main game. As far as I'm aware, the engineering preparation for the BFS is happening, which is roughly to schedule against the projection given at the 2007 AGM. MT also said back then that cash flow from the demo plant would start in Q1 2009. Given the mod'ns required, the outcome is also roughly as expected.

Yes, the SP is low, but if we don't have a P/E to show, there is nothing for the market to benchmark it against.