Contract Win

15 June 2012

Hydrodec Group plc

("Hydrodec" or the "Group")

Breakthrough mandate won from Mexican national utility to process PCB-contaminated oil 

Hydrodec, the cleantech industrial oil re-refining group (AIM: HYR), has been jointly awarded a material mandate from Mexico's national electricity utility for the export to, and processing of, 900,000 litres of polychlorinated biphenyl (PCB) contaminated oil at the Group's plant in Young, Australia.

The mandate has been awarded to Hydrodec and System of Energy SA DE CV ("SESA"), a transformer servicing and maintenance company, following a competitive tender with the Federal Electricity Commission of Mexico ("CFE") to service CFE's decommissioned transformers and provide the safe treatment of PCB contaminated waste oil extracted from its hardware.

Hydrodec and SESA have a collaboration agreement under which SESA sources used oil from various locations in Mexico as a feedstock for the Group. Hydrodec's economic and environmentally-friendly re-refining process, which enables the 100% removal of PCBs, is considered to be a major factor in the tender's success. The breakthrough is expected to lead to further volumes becoming available for tender in Mexico in the future.

Hydrodec will re-refine the Mexican used oil at Young to produce high quality SUPERFINETM transformer oil and base oil and these volumes should help to achieve full utilisation of the plant's capacity. Containers are currently being loaded, sampled and tested, such that transportation can commence upon receipt of the relevant export and import permits, expected in the third quarter of 2012. 

Hydrodec has been supplying SUPERFINETM transformer oil to customers in Mexico from its plant in Canton, Ohio since 2009. In 2011 a total of 3.1 million litres were supplied into Mexico and a further 1.5 million litres in the first five months of this year.

Ian Smale, Chief Executive of Hydrodec, said: "We are delighted with this breakthrough into a new market for feedstock. The volumes will sustain production capacity for Young and validate the global competitiveness of Hydrodec's PCB treatment and re-refining technology, while the competitiveness of SUPERFINETM is already established in Mexico."

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Notes to Editors:

Hydrodec's technology is a proven highly efficient oil re-refining and chemical process which is being initially targeted at the multi-billion US$ market for transformer oil used by the world's electricity industry. The Group takes spent oil, including polychlorinated biphenyl ("PCB") contaminated oil, as the primary feedstock, which is then processed at its two plants enabling 99 per cent or greater recovery of oil for reuse while also eliminating PCBs, a toxic additive banned under international regulations, without environmentally harmful emissions.