“Betolar is a Finnish growth-stage materials technology company whose mission is to enable the green transition globally across various industries, particularly in the construction, process, and energy industries.
Betolar is planning an initial public offering and listing on the Nasdaq First North Growth Market Finland marketplace.”
Virtual company presentation on Monday, 29 November 2021 at 18:00.
I wonder if I understood correctly, as Löppönen didn’t directly answer whether they have their own production for chemicals, etc., or if they only sell their recipes.
They state the following:
With the Geoprime® solution, side streams from various industrial sectors can be refined into environmentally friendly building materials, geopolymers. Such side streams include, for example, steel industry slags, such as blast furnace slag, coal fly ash and bottom ash, energy industry bioash, forest industry green liquor dregs, and tailings.
So, they have researched what chemicals are required for these side streams to ensure the concrete meets the requirements of the standards/project.
It immediately comes to mind that the side-stream products used in manufacturing should be thoroughly tested, even batch by batch. Can we know that the side streams are the same in India as, for example, in Indonesia?
So that this doesn’t happen:
It would be great if they succeed and the concrete remains consistently high-quality and lasts for years.
I also got the impression that there is no in-house chemical production. Is that also a partial business risk?
Are waste streams suitable for production? That thought came to mind quite quickly. Considering the variation in ingredient composition and content - too dangerous or expensive to purify, the risks likely exist. Does the company then have solutions for these risks, who knows, maybe?
Betolar is a very up-to-date “greenhouse savior” if it succeeds.
Questions for the company. Before the listing, will investors have access to verified comparative test results on the properties of the manufactured “concrete substitutes” and their durability under long-term stress in various conditions?
How will the future shift in steel industry manufacturing methods, e.g., to hydrogen technology, affect the raw material base?
I understood it that they develop a working recipe on a case-by-case basis. So it’s not like all kinds of waste are put into some factory, which turns it into concrete, but rather that one factory refines mine side rock into concrete with its own recipe and additives, and another then refines steel mill slag with a different recipe and a different additive mix.
When transitioning to hydrogen reduction, the blast furnace slag will be removed and replaced by electric arc furnace slag. I don’t know what the difference is between these in terms of concrete manufacturing or otherwise. The steel mill’s (process from blast furnaces onwards) slags will remain the same as they are now.
One would think that if SSAB were to implement some Betolar scheme, it would be designed for future slags, not past ones?
A small structure was created as a base for a charging point. Cement production generates CO2 emissions because its manufacturing involves heating limestone, which releases CO2 from the stone. If cement is replaced, CO2 emissions decrease. This is quite clear, but what portion of the money ends up in Betolar’s account and how is a less clear question?
The quantities are so large that even a small fee/ton of concrete could bring in a lot of money. The question is about competition and how well it has been ensured that Betolar gets its share?
This seems interesting because cement production is a major source of carbon dioxide emissions. Many questions are still open, but if successful, this could have great potential.
The CEO’s presentation was unusually vague. His previous employers include OP, Nordea, and Taimen OY (a fish farm with a turnover of 5 MEUR) - his fundamental expertise and experience in leading startups are a HUGE question mark.
Almost all management team members were hired in 2020 and 2021. It was strange to hear about long-term development work in the video.
If I understood correctly, the company makes concrete-like materials from industrial by-products. The innovation relates to processes, i.e., how by-products can be chemically processed into construction-grade material (like concrete). The business - WHICH DOES NOT EXIST - relates to the production and licensing of these processes (correct me if I’m wrong).
No revenue, no clear (and no proven) business model.
License revenue is likely a percentage of the final product. Achieving revenue targets requires significant sales of the final product.
Replacing concrete additives or aggregates is nothing new. The problem with industrial by-products is their inconsistent quality and scattered locations – their adoption and processing are not easy, not cheap (the CEO boasted about some 20 TEUR costs, the veracity of which everyone can weigh for themselves), and not ecological (logistics costs).
If every final product (e.g., industrial by-product X + chemical Y) has to be customized for the customer, it’s absurd to talk about world domination. Scaling takes time - the availability of raw materials (by-products) is not guaranteed, nor necessarily profitable.
This company has so far likely survived on public R&D funds. Such companies have many smart researchers - but little commercial expertise (or track record). If someone thinks that the world’s real concrete giants (e.g., Holcim) don’t have their own R&D activities, they should think again - these same ideas have been around for ages. Betonet (or the small Indian company mentioned) are not really relevant references for the entire concrete market.
The company’s CEO - without revenue - dreams of acquisitions. Shouldn’t they try to sell something first?
Am I going to invest?
The probability - based on the above - is zero. If I had to guess, the anti-money will burn on research, revenue targets will be far missed, and world domination will remain at the starting line. The management team’s experience, track record, and speeches only reinforce this view.
In my opinion, in a company so completely dependent on product development breakthroughs, one should not get too hung up on how much molecular-level understanding the CEO has of the technology. They lead the business, and the geniuses in the lab are key. Based on the video, the CEO’s substance expertise seemed quite reasonable for the job description, even if they weren’t a brilliant speaker like Jari Sarasvuo
Since there is no concrete visibility of a technological breakthrough at this stage, and the probability of success is difficult for a layperson to grasp, I almost compare this to a drug development company, and thus it is not an investable company for me. The collaboration with Lujabetoni seemed like a superficial scratch, and the real breakthrough will only come if cement can genuinely be replaced with a geopolymer equivalent.
However, construction is such a massive market, and concrete is its most used material due to certain properties, that the company is addressing a very significant issue from the perspective of reducing CO2 emissions. I remain skeptical but wish them the best of success as I follow whether anything comes of this.
When regulation, through standards (SFS 206; 7022 and concrete standards), allows for the increased use of binders other than cement in concrete, the big players in the industry will already be ready in the market to increase the amount of slag and fly ash, among other things.
Until then, this product can indeed be used under the name geopolymer, for example, in roadbeds, patio slabs, electricity pole bases, or as other secondary products.
In my opinion, the valuation should be based specifically on these low-level infrastructure solutions, and thus on the licensing fees received from them – they do not produce the products themselves but act as consultants.
“Chairman of the Board Tero Ojanperä explains how Betolar’s goal is to create a business ecosystem around its business model, based on data accumulated from geopolymer technology.”
I watched the CEO’s video and also the other expert video. I outlined my thoughts here on what this company’s business case is and also sketched out a few questions. Since company representatives are sure to read this forum, I would appreciate answers to these.
Business Case
• Evaluating the usability of industrial by-products and other materials in fresh geopolymer paste using self-learning neural networks (with materials from partner companies)
• Transforming by-products into usable forms in fresh geopolymer paste through chemicals and chemical processes. (Is AI utilized in this process?) (with chemicals and equipment from partner companies?)
• Predicting and optimizing the rheology of fresh geopolymer paste and the mechanical properties of hardened geopolymer paste using neural networks. (Proprietary AI algorithms)
A typical daily scenario could be as follows: A customer sees a really large pile of solid waste in their backyard and asks you to come on-site to assess whether it can be disposed of in a “circular economy spirit.” You examine the material, and based on that, you evaluate whether the ingredient could be utilized directly or by transforming it. You use a learning neural network for analysis, which you train to interpret from measured properties whether the material can be used as is. Another aspect is to assess whether exclusionary properties can be neutralized so that it could be utilized. Once you have decided to utilize a product, you engage another partner company to make geopolymer paste from the material, from which pieces are made that have many similarities with concrete but also differences.
Simple as that?
Questions for the company:
o Have you also included aggregates in this, or have you stuck to a 100% by-product paste that is cast as is, or as reinforced pieces?
o Does geopolymer paste protect reinforcements from corrosion in the same way as cement paste? Alkalinity, other quality properties – has this been studied?
o Have you practically tested this product in normal concrete by replacing cement with geopolymer? If so, how does the rheology of fresh concrete mix differ from conventional concrete on average?
o Apparently, the workability time is extremely short if there is already 5 MPa compressive strength at half an hour. How simple is it to slow down the process to achieve properties close to concrete mixes?
o Has pumpability been tested?
o What is the early-stage heat development and shrinkage of a geopolymer structure approximately compared to normal concrete, mm/m?
o How will regulation be tackled when moving into actual building construction?
o How do you protect yourselves from large players/cement producers performing similar optimization?
Edit 10:08 Finnsementti published on its website less than an hour ago that it has included CEM III blast furnace slag cement in its production. This grade contains blast furnace slag, a by-product of industry, up to 50% of the binder content.
“So, a typical daily scenario could be: A customer sees a really large pile of solid waste in their backyard and asks you to come on site to assess whether it can be disposed of ‘in a circular economy spirit.’ You examine the material, and based on that, you assess whether the ingredient could be utilized directly or by transforming it. You use a learning neural network for the analysis, which you train to interpret from measured properties whether the material can be used as is. Another aspect is to assess whether exclusionary properties can be neutralized so that it could be utilized. Once you have decided to utilize a product, you engage another partner to turn the material into geopolymers paste, from which pieces are made that have many similarities with concrete, but also differences.”
Perhaps so. I would rather understand that probably with R&D funds, various ways have been investigated to utilize different industrial by-products, which can be chemically processed into different building materials. This information can probably be converted into an algorithm, i.e., substance X + W amount of chemical Z => additive or building material Y. The problem, however, is still that the by-product is not uniform, and there are no guarantees of its continuous availability… I don’t believe any algorithm will solve this. In practice, the existence of many application areas is also a problem… instead of (endless?) research/algorithm modification, a product should be found that generates steady and significant licensing revenue…
…kudos to the company, of course, that the Chairman of the Board talks about AI in the media and the CEO does not.
The use of blast furnace slag in concrete is nothing new and has been used as long as I can remember, for example, as a retardant. The challenge in this company’s case is that probably all significant concrete users (e.g., Kreate and GRK) have their own circular economy units, and significant concrete manufacturers (e.g., Rudus and Ruskon Betoni) have similar units developing circular economy solutions.
Nevertheless, I wouldn’t dismiss Betolar’s case. In construction, due to regulations, material recycling has been made extremely difficult and “regulated to death,” so to speak. Due to the gigantic emissions of the cement industry, I would like to see such alternative solutions succeed.
It has been used a lot, but until now, CEM III has been a specialty product that, in my understanding, has required a fairly large scale and specific conditions for its use. Now that it’s available from a standard silo, the demand for this product could grow quite a bit, and that’s a good thing. Specifically, strength development will only be slower if the binder amount is optimized using CEM III – as a result, construction will slow down somewhat.
I myself wish that the concrete industry were less conservative and more innovative in this matter, and it’s possible that the University of Oulu’s geopolymers research has something to offer that, for example, hasn’t been considered or tried at the TKK (Helsinki University of Technology) concrete technology department. We need to get precise and clear evidence of that.
