MSAR Emulsion Bunker Fuel Manufacturer Quadrise Announces Cost Cutting Measures

Mike Kirk, Chairman, Quadrise Fuels International plc. Image Credit: Quadrise

Quadrise Fuels International plc [AIM: QFI] (QFI) today announced a number of cost cutting measures in the wake of what Executive Chairman Mike Kirk called a "challenging period" for the company.

"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," said Kirk.

"The cost savings are designed to have no impact on our operational or business development capacity."

As part of the changes, Finance Director Hemant Thanawala has agreed to step down with immediate effect and will become a Non-executive Director, said QFI.

The move reduces the number of Executive Directors from three to two.

"Mike Kirk, Executive Chairman, has agreed to reduce his cash salary by 50% with effect from 1st September 2017 with an uplift on the deferred element for potential future payment of 25%. In addition, the Non-executive Directors of the Company, including Mr Thanawala, have agreed to reduce their directors' fees to £24,000 per annum, with the balance being deferred, for potential future payment with an uplift of 25%," QFI explained.

"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."

While QFI did not detail any specific drivers for the move, it comes just three months after Maersk terminated its trial of the company's MSAR fuel.

And in a business update today, QFI said "Maersk's decision to end the operational and LONO trial early, despite the positive results was clearly disappointing. However, 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.

"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 Wärtsilä to actively pursue other opportunities in the marine market."