TRANSCU: Trading resumed, funds needed to bring products to market

Life science company Transcu currently generates revenue from products under its skincare brand Electore, but it also has a strong pipeline of hi-tech products under incubation.

AFTER A long wait of 15 months, Transcu shareholders heaved a sigh of relief now that the stock has resumed trading since Monday, 8 Oct 12.

Trading had been suspended since 10 June last year due to the company's insufficient short-term working capital.

The stock currently trades at 2.1 cents, giving the company a market cap of S$65 million.

"My strength is in driving businesses," said new CEO Lawrence Komo. Photo by Sim Kih

The company has appointed a new CEO, Lawrence Komo, who happens to be the husband of Nanz Chong, the former owner of the now-defunct ONE.99 chain of shops.

Mr Komo, 53, had been an independent director of Transcu since last November and has close to 15 years of investment banking experience.

Biomass technology close to market

In a media conference yesterday (15 Oct), Mr Komo noted renewed industry interest in Transcu’s technology for biomass energy as a result of a Japanese energy policy that came into effect on 1 July 2012.

Utility companies are now required to buy electricity from renewable sources such as solar, wind, geothermal, biomass and hydroelectric power at premium prices for the next 20 years.

”The problems created by the Fukushima nuclear reactor resulted in a revolution in Japan's energy sector.  The crisis creates an unique opportunity for biomass energy to contribute to the recovery of Japan in a positive manner,” said Mr Komo.

Before the Tsunami that shook Japan in March last year, nuclear energy had been an affordable energy source.

"The most important thing is working capital for the various businesses," said Ms Jenaline Low. Photo by Sim Kih

Post-crisis, most of the 54 nuclear plants that were shut down have yet to resume operation.

It has been estimated that replacing the loss of nuclear energy by importing fossil fuels will cost Japan as much as US$57.5 billion in 2012.

”The change in Japan's business and social environment greatly helps us bring our biomass product to market.  We only need to outsource the manufacturing and we need to raise funds for that,” said Mr Komo.

Transcu subsidiary, BIOMASS Energy Corp, is an incubator of technology that produces crude methanol from biomass, a greentech term referring to biological material from living, or recently living organisms.

Examples of biomass include forest residues (such as dead trees, branches and tree stumps), yard clippings, wood chips and even municipal solid waste.

"We are looking for 3rd party manufacturing partners in Japan and other countries," said chief operating officer, Ms Jenaline Low.

Couple more years for drug delivery system

Mr Komo expects it it would take another two to three years before Transcu’s drug delivery system is ready for commercialization.

”We need additional capital and a partner to help with marketing and distribution.  We have identified a Japanese partner to help us,” he said.

Mr Akihiko Matsumura is Transcu's largest shareholder with a 8.9% stake. NextInsight file photo.

Of its 3 business segments - cosmetics, pharmaceutical solutions and green technology -- only the cosmetics segment is currently generating revenue.

It posted 1QFY2013 (Apr-Jun) revenue of US$1.4 million, a contraction of 15.9% year-on-year.  Net loss attributable to shareholders was US$2.1 million.

”The priority now is to get Transcu financially sound,” said Mr Komo.

Mr Komo's predecessor, Mr Akihiko Matsumura, retired as CEO on 5 October and continues to serve as non-executive vice-chairman.

”Mr Matsumura remains a major stakeholder in Transcu and has a strong vertical network that is important for the company. He will concentrate on developing the businesses in Japan,” he added.

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