HeiQ: Growing, innovative specialty materials company with big aspirations

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Newly-listed HeiQ Plc (LON:HEIQ) aptly demonstrates the cosmopolitan nature of the London Stock Exchange.

Based in Switzerland, it employees 24 different nationalities at offices in the US, Australia, Portugal, China, Taiwan and Japan.

“The sun never sets on HeiQ,” jokes chief executive and co-founder Carlo Centonze.

His business is tapped into the US$24bn textiles chemicals market, and the US$10bn antimicrobial fabrics sector and this year it entered the anti-viral medical device arena.

HeiQ’s specialism is helping create technologies that cool, warm, dry, purify, repel and stop viruses.

It has an impressive 200 innovations that are used by 300 different brands. Its Viroblock NPJ03 has proven spectacularly (99.9%) effective at repelling SARS-CoV-2 (the virus causing covid-19) and has been woven into a range of masks.

Clear vision 

Going forward, the company has a very clear vision: to increase by ten-fold its turnover in the medium-term. And as Centonze says: “All the pots and pans are there already to do this.”

In more formal, business parlance HeiQ is operationally geared to grow very quickly.

Digging down, you soon realise the company is unique in the industries in which it operates.

Not only does it carry out the R&D work, but it is also a manufacturer and marketeer of its own advances.

And it has broken the mould for the way companies collaborate with academia.

Working with 15 universities it helps fund researchers – both from its own coffers and by applying for grants.

It calls its process ‘rapid deep-innovation’. Essentially, this means that once the proof-of-concept phase is completed, the “furtherment” of the intellectual property is swiftly taken in-house. It is then developed ready for the manufacturing stage.

Unique approach

While HeiQ will partner with brand names such as Dickies or Serta Simmons Bedding it will market its smart innovations alongside the product.

Centonze calls this the “three-pillar approach” (design, manufacture and market). It allows the company to be the master of its own destiny at every stage of the process, he adds.

It can also be fleet of foot when the 600-pound gorillas from the world of functional chemicals come stomping all over one of its many niche areas. It will direct its focus on a new high-margin area of development rather than stay and fight “broadside after broadside”, Centonze explains.

Its unorthodox but flexible methodology also means that new solutions can be brought to market in roughly half the time it might take a larger more conventional company in the field.

The business model helps deliver gross profit margins of around 55%, which is around 10 to 15 percentage points higher than its competition.

The float on London’s Official List brought in £20mln of new funds and leaves HeiQ primed and ready to kick on commercially.

It has an acquisition in the works that pre-dated the float, but the remainder of the growth plans are organic.

Of course, the HeiQ Viroblock technology is selling well, while the investment will be made into the core products portfolio, revenues from which grew by a very solid 17% in the first half.

Moon shot product

The company is also entering the medical devices field and it has also developed what Centonze describes a “moon shot product”.

This is a highly-porous graphene membrane that can be used for desalination and in batteries, electronics and filtration.

“Those four markets are big enough for us to exhaust all our entrepreneurial energy,” says the HeiQ chief executive.

The company also plans to “capitalise on the momentum we have” to strengthen brand awareness, says Centonze, while plans are also in train to increase the company’s geographic footprint.

“With the capabilities and the assets we have in place we can capture a lot of new business – but we are not after small fish, we are after the whales,” he adds.

Directors and investors on same page

With 23% of the business held by management, Centonze and his team have to make the crucial next phase of growth really matter.

“There is a huge alignment between what we as management want to achieve and what shareholders want to achieve,” concludes Centonze.

“I think that’s important for prospective investors to know this too.

“We have been growing over the years, so we have a strong track record.

“It’s why we are confident we will continue to grow – not only in 2020 but strongly and sustainably over the coming years.”

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