The company that’s making a big rumble in the Indonesian jungle

What’s better than signing a major contract worth several million dollars? Signing two such contracts within the space of six months of course, along with an long renewal of the underlying exclusive distribution agreement – a significant show of faith in the progress and direction of the company.

Over the past few months, SAPEX has been piling on the good news, furthering their story with yet another noteworthy tie-up last month with Ophir Indonesia. Ophir Indonesia are not first-time users of SAPEX’s Dura-Base Composite Mats, having rented 240 mats in the first quarter of 2018. This time around they’ve turned to SAPEX once more, this time more than doubling the quantity of rented mats for the same 4 month rental period.

Ophir Indonesia is the Indonesian PC operating arm of Ophir Energy, a large, London Stock Exchange listed energy company. Using technology developed by the US military to transport armored vehicles, the Dura-Base mat technology is the perfect alternative in the jungle terrain of Indonesia where otherwise only the construction of a road would suffice. The benefits don’t just end with the construction either; once a project is done, the mats can be lifted up, and reused for more than a decade afterwards. By comparison, the waste of resources and potential for ecological damage in removing a road is substantial.

Further good news for SAPEX this month was the announcement of a renewal of the exclusive distribution license for Indonesia with Newpark Mats & Integrated Services. Since the agreement was first implemented over 10 years ago, SAPEX has operated on 1-year rollover contracts. This time around, however, Newpark have chosen to make a significant  endorsement with the partnership it has with SAPEX, granting a 3-year license, through to December 2021. Indonesia is a prime location to maximise the full benefits of the Dura-Base matting system, and SAPEX’s capacity to lock up a long-term exclusivity agreement for the region could facilitate a further broadening of its offering.

The benefits of a 36-month agreement, as compared to only 12 months, could be momentous. In the March investor briefing, where the $3.66 million contract with SAKA was discussed, it was revealed that SAPEX is targeting further contracts like the one signed late last year. It will provide the company with more flexibility to make viable long-term propositions to serious players in the region, increasing the attractiveness of what SAPEX has to offer. All these positive developments, and potential developments to come, mean that SAPEX provides a compelling upward narrative leading into its proposed ASX transition  in a few months’ time.

Investors interested in the coming Sapex Group IPO can register their interest here to receive details when they become available as well as updates from the Company.

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SAPEX Group trades under the NSX code: ‘SAA’

More information on SAPEX Group can be found at their Investor Centre.

*Reach Markets is paid a retainer to assist SAA with private investor management.