Replies to post #1210 on Composite Technology Corporation (fka CPTQE)

[lentinman]

Craps:

You wrote: "I bet most of CTC core wire will be sold for rebuild/upgrade that will not involve new poles/structures = that is their BIG advantage."

I understand what you are saying, but let me present another angle. If you are buying new wire, are you going to string it onto dilapidated poles? Maybe, but I see a situation whereby new poles would be highly desireable if you are running new wire. I doubt poles would be involved in major transmission lines that run across the country, but otherwise...

I think of every municipality in the US. Eventually every road has to be replaced. They budget a certain number every year. When they do them, there is a good chance that they will do the sewar, gas and water and the same time. Utilities may very well just simply want the process overwith ... forever ... with respect to that section of line. And, that would mean replacing poles simultaneously.

If utilities were to budget a certain percentage of their lines/poles to be replaced on an annual basis, that is the type of recurring revenue that CPTC wants to get their hands on. Even a fraction of it would vault them into the stratosphere IMO.

If a utility is buying poles from one company and wire from another, they not only have logistical issues that may be a problem, but they cannot expect a discount on either product. If they go to the same manufacturer and buy both, they can say that they will buy X+ amount of wire IF they get a discount on the poles. It may mean the poles don't get sold for as high a margin, but money is money. Better than that, they cut other competitors out of the arena. And, best of all, their pole (availability) helps assure that they will get the wire deal.

I would be surprised if CPTC doesn't make a very concerted effort to try to bundle their product into packages. If they are unable to produce the amount of product they need, then they may not do that, but if they can, I they will IMO.

The market seems astronomical to me. I can imagine that they will have backlogs as far as the eye can see for a long, long time no matter how fast they produce product. Of course, I'm biased.

Len