FRENCH WINERIES TOAST AUSTRALIAN TECHNOLOGY

FRENCH WINERIES TOAST AUSTRALIAN TECHNOLOGY from Alchemy Equities

By: Alchemy Equities  12-Apr-2012
Keywords: Business Advisory, Entrepreneur, Equity Capital Raising

Flextank International Ltd, an Australian wine technology company, has made its first inroads into the European wine market with its innovative wine maturation vessels. The company has shipped the first two containers of its patented polymer cubes to 10 different wineries in France, located in Bordeaux, Languedoc and the Rhone Valley. This is a significant breakthrough for Flextank. Its polymer cubes are already used in more than 500 Australian wineries, but according to Managing Director Peter Steer, the main game has always been about the much larger European and US markets. Flextank’s vessels are intended to replace barrels in the wine-making process. The cubes are significantly cheaper to buy – about a quarter the price of barrels. They also last for 20 years against only 5 years for barrels, they are easier to handle than barrels and provide more even oxygenation of the wine. Professionally conducted wine taste tests have demonstrated that the quality of wine matured in Flextank cubes is equal to and arguably superior to the same wine matured in barrels. Flextank Managing Director Mr Peter Steer said that traditional European winemakers were obviously sensitive to costs in the current difficult market environment. “After all, they’re running a business. And the savings available from our cubes are too significant to ignore. “If the quality and taste of the wine are the same, why wouldn’t you buy the cubes?” Mr Steer said Flextank had sent one early container of cubes to France to enable winemakers to conduct tests on the vessels. These tests had been successful and winemakers had already placed orders to convert half the cubes used in those trials to sales. “So in effect, we have now sold two and a half containers of the vessels to French wineries.” Mr Steer said Europe was the biggest wine market in the world and once strict rules imposed on winemakers were continuing to be relaxed. “When winemakers use our cubes, we provide them with oak staves to place in the cubes, to provide flavor, aromatics and structural components to the wine. That is now permitted in many parts of France whereas it was once forbidden.” Flextank recently pulled off something of a coup by appointing Alban Petiteaux as its European and Mediterranean Sales and Marketing Director. Mr Petiteaux had previously been Commercial Director of Seguin Moreau, one of the most prestigious barrel companies in France and fourth largest in the world. Mr Steer said Flextank was now a significant and growing supplier of oak in stave and chip forms. Flextank launched a global first late in 2011 when it introduced hand-split staves made from barrel oak to the wine market. “The vessels are a durable item with an operating life of 20 years. The oak staves give us a consumable product because they are replaced in our maturation vessels every 12 months.” Mr Steer said turnover in both parts of the business was growing rapidly. He said that while Europe was the largest prospective market for Flextank, the company would mount a substantial sales drive in the US later this year. “We have already established a strong presence there. Many wineries on the West Coast have conducted trials on our cubes and we are achieving growing sales traction there.” Flextank is a client of Alchemy Equities and is currently present on the Australian Small Scale Offerings Board. For more information visit www.assob.com.au/flx *********** The writer is Dan Liszka, Managing Director of Alchemy Equities, a private equity advisory firm based in Sydney Australia. Alchemy works with angel investors and retail investors to support innovative Australian companies through equity capital raising, small business grants and commercialization advisory.

Keywords: Business Advisory, Entrepreneur, Equity Capital Raising, Private Equity Fundraising,

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