Quadrise Fuels International plc, the emerging supplier of MSAR emulsion technology and fuel, announced a number of cost-cutting initiatives on Thursday, which included reducing the number of executive directors and laboratory personnel, and lowering the chairman's salary and non-executive directors' fees.
Hemant Thanawala has stepped down as Finance Director and will become a non-executive director, with immediate effect. Quadrise explained that this will enable the board to streamline the number of executive directors from three to two.
The Finance Director functions are to be absorbed within the existing senior team, whilst Financial Controller,
David Scott, is to lead the company's "focus on sound cash management, allied with strong project accounting".
Mike Kirk, Executive Chairman, has agreed to reduce his cash salary by
50 percent with effect from 1st September 2017 with an uplift on the deferred element for potential future payment of 25 percent. Furthermore, the non-executive directors of the company will have their directors' fees reduced to
GBP 24,000 per annum, with the balance being deferred, for potential future payment with an uplift of
25 percent.
The General Manager roles have been restructured to enable the three segments of Refinery, Power and Marine to be covered effectively by two General Managers. In addition, the laboratory personnel roles at the Quadrise Research Facility have been reduced by one.
Quadrise said its advisers have also agreed to "significant reductions" in fees.
In total, Quadrise expects these actions to deliver annualized savings in excess of
GBP 500,000 - around
18 percent of the company's underlying (non-project specific) annualized costs.
Commenting on the changes, Kirk said: "This has been a challenging period for Quadrise and we have made some important cost reductions to ensure that we can still actively pursue the significant opportunities for MSAR in the power and marine markets."
Quadrise said Maersk's decision to pull out of the MSAR fuel trial earlier this year was "
clearly disappointing", whilst adding: "It was based on a policy decision by Maersk to use low sulphur fuels, for IMO 2020 compliance and was not based on any issues with the MSAR fuel - with Maersk having confirmed that
good progress was made and no issues had arisen with the use of MSAR."
On the issue of ship operators using fuel - such as MSAR - with a sulphur content above 0.5 percent after 2020, the company reiterated: "Quadrise and many market commentators still believe that the use of high sulphur fuels in conjunction with Exhaust Gas Cleaning Systems, or scrubbers, will offer the lowest cost of compliance with the IMO 2020 sulphur regulations. We will continue to use the positive results of the trial, together with the interim LONO and inspection report from Wartsila to actively pursue other opportunities in the marine market."
Image: Mike Kirk, Executive Chairman of Quadrise Fuels International.
