Mark McNamara is something of a rare breed. As chief executive officer of AIM-listed Hydrodec plc, he’s watched his company’s share price soar in recent months.

And unlike many of his contemporaries, McNamara has been able to turn to his investors when more cash is needed. In return, the company looks set to stamp a fairly hefty mark on its markets.

Hydrodec’s proposition is simple. It owns the technology to recycle spent transformer oil and re-refine it into ‘Superfine’ transformer oil. Not only is the new oil of equal – or better – quality that the original, it’s also price-competitive. Add to that the positive environmental credentials the company can claim, and it’s turning out to be a winner for Hydrodec.

So it’s no surprise to hear McNamara’s current views.

“We’re pretty happy with where everything is going and where we are as a company,” he says. “It’s all good.

“This time last year we had our Australian plant running, we were selling oil and we were ramping up capacity. We’re doing well now. We’ve got 75% of the capacity sold and that is going to 100% shortly. It is perhaps three months behind where we really wanted to be, but it’s all pretty good.”

Hydrodec’s first plant in Australia will soon be joined by a second in the US, its biggest market. A third plant in America is about to break ground and a fourth, in Japan, is in negotiation.

But it was the performance of the Australian plant that set the scene for Hydrodec’s success so far. Attracting export orders from Turkey initially came as a surprise to the company but it showed that the products could be price-competitive despite flowing from an under-scale plant.

For McNamara it proved the company could punch above its weight as a global supplier.

With a London AIM listing in late 2004, he has been able to tap investors for cash to fund the US plans – where the company will eventually have ten times the capacity of its Australian operation.

McNamara is clear that AIM has been good news for Hydrodec. “Our experience has been good. Coming in it was a very efficient process to get listed, very quick, and that’s the thing that attracted us to it in the first place. It’s been liquid and there has been money around. The structure of the AIM market makes it a very agile, fast moving thing – and that’s good for us at our size and time of life.”

And with the cashflows predicted from the US operations by the second half of this year, McNamara is confident the company is nearly fully funded through into a major capacity roll-out. Indeed, he says the company won’t be building any more plants without at least a minimum level of off-take commitment. This is currently the focus in Japan.

“Going to Japan isn’t so much deciding where to build a plant and how big it will be – it is securing the off-takes before we get there,” he said. “It is the same thing for other countries that are on the horizon. For us now, we’re through most of the commercial and technical risks – it’s now about controlled roll-out.”

But while rolling-out the Superfine product to other countries looks set to be a certainty, McNamara appears quietly excited about some of Hydrodec’s other plans.

Having previously turned down the invitation by “a couple of fairly large international companies” to perform the same re-refining process but with other types of oil, he says the company is now actively looking at this.

“In this early stage we have been completely focused on transformer oil,” McNamara says. “We’re now getting to the stage where we’ve lifted our head a bit and turned our research reactor onto other oil types. Early results are really encouraging. So that’s something that is quite seriously on the agenda now.”

Questions over how long perfecting another process might take have held the company back from talking too much about its efforts. But there’s little doubt that McNamara sees new opportunities with other types of oil. And as the company ramps up capacity and enters new markets it’s likely that AIM investors will be keeping a close eye on it.

By Ben Hobson, SmallCapNews.co.uk