Laser gas sensor ready for Australian market

University of Otago spin-off company Photonic Innovations is well on its way to raising $1million in new capital, having just secured a New Zealand-wide distribution deal – with important Australian deals pending.

Photonic has developed and commercialised a laser gas detection device, to detect ammonia, and has just clinched a distribution deal with Active Refrigeration, giving it access to more than half of New Zealand’s market.

Photonic Innovations’ executive chairman Steve Silvey, left and chief executive Ojas Mahapatra with an ammonia detection device, readying for delivery. Photos: Gregor Richardson

Newly recapitalised, Photonic Innovations is also eyeing a stock exchange listing in the future, which could potentially be a dual listing in New Zealand and Australia.

Photonic’s chief executive, Dr Ojas Mahapatra, said there were up to 800 refrigeration sites around New Zealand, servicing mainly meat processors, the dairy industry and cold stores, of which Active Refrigeration had a more than 50% market share.

While Photonic has five main competitors, they rely on using chemical sensors which can become depleted and must be monitored closely for reliability.

He said Photonic’s selling point was not only its patented laser technology, but also the ability to monitor the devices 24/7, either through cloud computing connectivity or by mobile application.

”Yes, an [on-site] alarm goes off … but 24/7 we can check the device is working and check the calibration of the sensors.

”It’s not only peace of mind of product functionality, but also with a [monitoring] service guarantee,” Dr Mahapatra said.

In lay terms, an invisible laser is bounced constantly between two mirrors, just a few centimetres apart, with the laser calibrated to detect a designated type of gas, which could be one of six gases chosen for a particular customer’s needs.

Dr Mahapatra has visited Nasa, which was developing laser technology to detect gases on Mars. There were researchers in Europe also developing the technology, he said.

”We’re the only supplier of laser-based [gas] detection devices,” he said.

Dr Mahapatra said since November the company had secured about $700,000 of the $1million sought, and expected to get a further $300,000 by the end of July.

Photonic’s is readying itself to launch into Australia in coming weeks to secure a distribution deal. Dr Mahapatra expected that deal to be clinched within a month.

”At present about 50% of inquiries are from Australia; that market is where we really want to be,” Dr Mahapatra said.

He could only say the two Australian distributors represented respectively 40% and 20% of the entire cross-Australia market.

Photonic executive chairman Steve Silvey, who is also investment manager for seed funding shareholder PowerHouse, said technology patenting was an important aspect of Photonic’s growth.

”IP [intellectual property] protection is part of the value for investors,” he said.

He expected the new $1million capital would see Photonic through to the first quarter of 2018, at which time more investment would be sought.

Most shareholders now on board were high-net-worth individuals, and while it was too early yet to attract the attention of large institutional investors, institutions ”would be the next step up”, he said.

”That [2018] will be the next phase seeking expansion capital,” he said.

On the question of listing on the stock exchange, he said ”that’s on the three- to five-year horizon” and did not rule out consideration of a dual listing on the NZX and ASX.

The $1million investment would be used as working capital, to expand Photonic’s market presence, the size of the business and go towards research and development.

Staff at Photonic, based in the university’s Centre for Innovation, had since last year doubled to six.

Dr Mahapatra was confident manufacturing of the device in Dunedin could meet increasing demand from both New Zealand and Australia.

He said ammonia’s popularity as a refrigerant had ”increased dramatically” in recent years due to its green credentials; having no carbon footprint.

Unlike other refrigerants, ammonia required neither hydrofluorocarbons (HFCs) nor chlorofluorocarbons (CFCs), some of which are environmentally damaging.

”[However] there’s been quite a few near-death ammonia leaks at food processors in New Zealand recently,” he said.

Ammonia in large concentrations can cause immediate burning to the nose, throat and respiratory tract and airway destruction.

In mid-May there was an ammonia leak at the Affco meat works in Moerewa, Northland, where 60 workers were evacuated; then just days later Invercargill’s meat works at Lorneville reported an ammonia leak, prompting emergency service callouts.

Dr Mahapatra said both leaks had prompted installation of Photonic detectors.

He said recent changes to health and safety legislation and refrigeration safety standards had also prompted the need for gas detectors.

”There’s a drive to reduce companies’ risk profiles, that includes a need for detection devices,” he said.

Photonics was working with WorkSafe NZ, as it expanded into methane detection, which is important in the mining and oil and gas industries.

The technology was developed by Prof Andrew Wilson’s research group at the Jack Dodd Centre for Quantum Technology and the Department of Physics at Otago in 2005. Prof Wilson later left and development was shelved for almost three years, before being revived in 2014.

Since 2014, private investment group PowerHouse Ventures and the Governments’s New Zealand Venture Investment Fund have supplied more than $700,000 R&D funding.

Of the total 245 shareholders, PowerHouse and the Venture fund have respectively a 30.77% and 25.04% stake in Photonic, the university’s commercialisation company Otago Innovation Ltd has 14.30% and Dr Mahapatra 3.97 %.


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