OrganoClick: New non-woven contract with Glatfelter - ABG

New contract with Glatfelter
OrganoClick announced a new contract with Glatfelter, a global non-woven airlaid producer, for the use of OrganoClick's biobased binders for its table-top products with commercialisation set to start in Q2'23. No volumes are disclosed in the press release, and while ramp-up will take some time, management claims that year-one ramp-up should be quicker than it was for the Duni contract. In '22, Glatfelter produced ~160kt airlaid non-woven material, and if it would convert all its production to biobased binders it would need 56-64kt binders from OrganoClick. At the same price point we have assumed for the Duni contract (~SEK 10 per/kg), this would imply potential annual sales to Glatfelter of SEK ~560-640m, however the initial agreed volumes are likely much lower.

Second new contract announced in '23
Management has previously guided for two potential new contracts near-term and besides this contract with Glatfelter, OrganoClick recently announced a contract with SharpCell, which has a potential ~3.5kt purchased from OrganoClick, implying a potential of SEK ~35m at SEK 10/kg. As with the other contracts, this too should take time to ramp-up. Overall, we see it as a positive that order momentum is started to pick up for the much hyped non-woven segment.