KleenAir Systems (KSI.L) - pollution reduction business exploiting the new London Low Emission Zone KSI.L
Full Report by Objective Capital , Jan 15, 2008(login for full report) Questions?
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Key Points:
KleenAir Systems provides a range of retrofit solutions for emission
abatement to allow vehicle operators either to comply with retrospectively
introduced legislation such as the London Low Emission Zone (LEZ) or meet
Corporate Social Responsibility targets and guidelines. KleenAir solutions
can bring commercial vehicles up to Euro III and Euro IV compliance on
particulate emission.
A lean business model is achieved through outsourcing manufacture
and fitting, while retaining control through the provision of applications
engineering and system design. KleenAir is essentially an engineering
consultancy business offering specific solutions, and by outsourcing
labour intensive functions is able to keep its cost base relatively low.
The London LEZ approved last May provides a market for KleenAir,
by requiring most non Euro III vehicles operating within the zone to be
modified to meet Euro III standards for particulate emission and Euro IV
by January 2012. Although subsequently watered down by TfL allowing
pre Euro III engines produced by the major manufacturers an exemption,
there is still a sufficiently large market to allow KleenAir to develop
a reasonable business until other opportunities develop.
Corporate Social Responsibility offers a potential market although it remains
underexploited and uncertain at the moment. CSR is generally voluntary and
not mandated by legislation, it therefore relies on peer pressure, conscience
and perceived business advantage. While possibly not a corporate priority in
a difficult consumer market it may take off in the future.
Other LEZs and business opportunities may develop once KleenAir has
established its UK business. A number of UK and European cities are known
to be considering LEZs and may give the green light once the effectiveness of
London’s LEZ is established. There may also be the opportunity to combine
KleenAir’s anti-pollution know how with other automotive businesses.
