Accsys — Successful capital raise
On Tuesday 21 November, alongside the publication of its half-year figures, Accsys announced that it had raised €24 million in new capital and had been able to extend its financing facility with ABN AMRO. Teslin Participaties, as the largest and an active shareholder, was closely involved in this.
The capital raised will mostly be used to complete and start up the Accoya plant that Accsys is building in the United States together with American chemicals group Eastman. Unfortunately, due to high inflation, construction costs are coming in around 15% higher than estimated in 2021. America is the largest timber construction market in the world, and we therefore have high expectations for the plant, which will become operational in mid-2024. The remainder of the capital will be used to further optimise the existing Accoya plant in Arnhem and to strengthen Accsys's balance sheet.
The company is currently facing challenging market conditions. Sales this year are disappointing due to a weaker construction market. In addition, delivery times for building materials have shortened, so distributors are reducing their inventories. We also see this reflected in the half-year figures, which disappointed us despite a volume and revenue increase of 20% to 28,807 m3 and 21% to €71 million respectively. The fourth reactor in Arnhem is now operational, which in principle means Accsys could have produced and sold 35,000 to 40,000 m3 of Accoya.
Accsys itself is also to blame for some of these setbacks. The company had not adequately prepared for the increase in production capacity. Demand for Accoya had always exceeded what Accsys could produce, which meant commercial strategy received insufficient attention. This is now one of the key priorities for the recently appointed CEO, Jelena Arsic van Os. Another priority is making the company more efficient, so it can operate from a lower cost base. Several initiatives are already under way.
We expect the construction market to pick up again in 2024. Distributors will start building inventory early in the year, ahead of spring and summer, when most projects get under way. In recent months we have spent considerable time assessing the competitive position of Accsys's two products, Accoya and Tricoya. Following conversations with dozens of industry experts, among other things, we remain convinced that both products occupy a unique position in the high-end market segment and have significant growth potential. It is now up to Accsys to deliver on this.
To support the company in this, we and fellow major shareholder De Engh have decided to enter into a relationship agreement with the company. Among other things, we have agreed that we may nominate a non-independent supervisory board member for as long as our combined stake represents more than 15% of the outstanding capital. This will ensure our points of attention are actively placed on the board's agenda, resulting in closer cooperation between the company and its shareholders. Finding a short-term solution for the still-to-be-wound-down Tricoya plant in Hull is one such point of attention.
Within our own network, we have already identified a strong candidate with extensive experience in the building materials sector in both the United Kingdom and the United States — two important markets for Accsys. We expect to be able to announce our candidate soon.
We have been invested in Accsys since 2017. To date, this investment has not delivered what we had expected. The main reason for this is that the company has not yet succeeded in getting the Tricoya plant in Hull operational. Looking back, we underestimated the complexity of such a project and were insufficiently critical of the quality of management.
This capital raise gives Accsys a fresh start under the leadership of a new management team. The project in the United States is in its final stages, and we expect this to give Accsys a stronger foundation. We still regard the investment case as attractive and, based on our positive view of Accsys's proposition, have decided to participate in the capital raise for €4 million.
