Ammonia might seem at first glance like a somewhat insignificant chemical…
However, it is often credited as one of the most important chemicals for human survival in the modern era. Ammonia is used to produce the fertilizers that give us enough food to sustain and grow the human population. These fertilizers have quadrupled the amount of food that can be grown in a given area.
It is also used for a whole host of other purposes. However, agriculture is what most ammonia is used for and is the main focus of AmmPower.
In terms of the environment, ammonia production is responsible for 1% of global CO2 emissions and 2% of global energy usage. That’s quite the price for a household cleaner.
A new product by AmmPower aims to change that.
AmmPower, a company focused on creating new solutions for the ammonia-based fertilizer industry, has just made an announcement.
On July 25th, AmmPower announced in a press release that its IAMM (Independent Ammonia Making Machine) demo unit is “exceeding expectations” and about ready to roll. According to the company, the first assembly production unit is scheduled to begin in October.
Shortly after the announcement, AmmPower stock woke up… clearing $0.32 by August 1st, up from $0.16 on July 25th.
What is IAMM???
The IAMM is a standalone machine that’s about the size of a small walk in closet. It allows for the operator to walk into it and produce carbon-free “green” ammonia without the use of natural gas. Typical synthesis of ammonia uses natural gas, including almost all production of the chemical today. The IAMM uses just water, air, and energy.
Since natural gas is primarily methane, a greenhouse gas more than 25 times stronger than CO2, it is a very powerful contributor to climate change. This makes green ammonia very apt to growth in the coming decades.
Enough Science… What about the economics?
Besides its protection from policy risk, it also has practical economical purposes. Of course, it allows the company to cash in on carbon credits. But more importantly, the price of green ammonia should be far more stable than typical ammonia — since it isn’t reliant on fossil fuels. It also shouldn’t be vulnerable to shortages like the one going on now.
See, this recent fertilizer shortage, however tragic, seems to have made the agriculture industry more aware of its vulnerabilities… and its need for a product like the IAMM.
AmmPower is coming at a good time to take advantage of this with their new product.
The IAMM is capable of producing up to 4.4 tons of ammonia per day and allows everyday farmers to make ammonia on their own property for the first time.
So, clearly anyone who bought the stock a few weeks ago is doing well. But, do they have potential for growth?
Well, since they’re yet to sell the product on a mass market, the stock can certainly go up if the product is a success.
However, AmmPower is still a speculative stock. There are, of course, an innumerable amount of factors that can dictate the success of the IAMM and the company. The product shows promise, and AmmPower has a very small market cap of about $28 million USD.
Another plus, it seems the company has some knowledgeable and dedicated minds behind it. Its founder and president, Rene Bharti, is a serial entrepreneur who has founded several successful start-ups, his first of which sold for $300 million. He has helped raise over $500 million for several ventures over the past twenty years; as well as worked as a fundraising consultant and helped companies turn profitable.
Its CEO, Gary Benninger, PhD has had a very successful career working for NASA, Ford, and Magna. He has received several awards and holds numerous patents for automotive parts. In addition to being Vice President of Product Development at Magna, he was the CEO of Amerityre and the COO of another large company.
In addition to those two, they have a team full of highly-qualified individuals with experience in agriculture, ammonia production, and other related industries.
Long story short, there are several very successful people that have put their minds behind AmmPower and its future. They clearly have faith in the company and a strong direction for where they want to take it. The company was founded less than three years ago in December of 2019 and have done well thus far.
Until the company launches the IAMM, no one can know for sure how the product will perform. There are also several competitors to AmmPower — all working to claim their prize in the industry. In addition, several very large companies have started work on green ammonia projects… bringing with them big teams and plentiful funding.
For instance, Yara, the biggest ammonia producer in the world, has been working to begin a large-scale green ammonia plant in Norway. The largest ammonia producer in the US, CF Industries, also has a massive focus on developing environmentally sustainable ammonia and fertilizers.
But, AmmPower is a still favorite in the green ammonia space with many speculative investors. With what we know, it appears to have a future filled with possibilities. AmmPower seems to be going after the smaller market of farmers with the IAMM rather than compete over large-scale production with big companies.
In any case, AmmPower is certainly a stock you should watch in the coming months and years. It appears to have a team that believes in it and a strong sense of its future.
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