CDTI: Strategic Review completed. Emphasis to shift to Material Science Platform. The company has filed a Form 424B5, preliminary prospectus.
By Ian Gilson, PhD, CFA Clean Diesel Technologies Inc. ( Nasdaq-small:CDTI) has completed the strategic review of its businesses and has decided to "pursue aggressive development of its unique materials science platform". Clean Diesel is a leader in zero platinum group metal (ZPGM) catalyst systems but has no competitive edge in metal bending.
As mentioned in the fourth quarter and full year 2012 conference call, profits were influenced by price volatility in the Platinum Group (6 elements including platinum and palladium) and the rare earth group (17 elements including the 15 Lanthanides) metals. However, the PGMs tend to be high priced, often over $1,000 a troy ounce, and a 1% price change is significant. The lanthanides are relatively cheap and a 1% change may be measured in pennies.
The skill in making catalyst systems is how to deposit the catalyst on a substrate, which may be silica or silicon carbide (of which there are many suppliers). Clean Diesel has patented its processes and the composition of the catalysts. As such they are a leader in the market.
We would expect the company to form more JVs and partnerships, especially where it can add value to a system without the cost of iron piping.
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