Munitions dumps 'kill more' than landmines: UK firm seeks cash to clear them
Sunday 08 June 2008
John Reid is the man who developed those little security tags that go "beep" when thieves do a runner out of shops. By Reid's own admission, that made him "a lot of money".
Opening up his laptop – and once past the screensaver of Gnasher, his black Labrador – he shows images of where his current business interest lies: big, unexploded munitions. He has pictures of thousands of munitions stored haphazardly near a port in Central Europe. Holiday homes sit on the clifftops above.
If just one of these munitions explodes, the others will go off. "It is a catastrophe waiting to happen," says Reid. "Already there are a lot more people killed by munitions stockpiles than by landmines, which have received a lot more attention because of the likes of Princess Diana's campaign."
No one can be certain just how many of these munitions there are worldwide, but the consequence of war is that they can be measured in the tens of millions of tons. There are 2.5 million tons in Lithuania alone, says Reid.
The munitions are difficult to destroy. Typically, they have to be taken to fixed buildings where they are decommissioned. The travel involved makes this a time-consuming – and potentially highly dangerous – process.
Disarmco, Reid's company, is trying to raise funds to develop a mobile facility – a much cheaper alternative as about half the cost of destroying munitions derives from transportation.
Reid, although founder of Disarmco, is chief technical officer ("I'm more your oily-rag type"). He says he and managing director John FitzGerald are in talks with India to develop 19 of the units. Without allowing for bulk discount, these would be sold for about £4m each, and Reid claims a margin in "the very high double-digits".
Even more money would be made out of the decommissioning process itself. Although Disarmco, as a UK company, would be unable to operate the system in a separate sovereign state, it could team up with local firms. In India, Tata, the conglomerate that owns steelmaker Corus and the Land Rover and Jaguar brands, is interested.
Each unit can process about 7,000 tons of munitions a year. The cost is $1,400 (£715) a ton, meaning potential revenues of nearly $10m a unit every year.
The snag is, Disarmco lacks the money to develop the product, thanks to the universal debt-market squeeze. Disarmco has worked with the fund management business Pre-X Capital through the Enterprise Investment Scheme. "We raised nothing like enough," sighs Reid.
The company is now in talks with the likes of Close Ventures and high net-worth institutions for the latest round of fundraising. Reid wants £1.5m to build a prototype, and once the system "is demonstrable", Disarmco will try to raise £10m after Christmas. This would be used to build the first tranche of units.
If successful, Reid's ultimate aim is to sell up or to float the company. "I have no ego about owning this business. This is going to be gobbled up by one of the big defence companies."
And that, like anti-theft devices, is sure to snag Reid another lot of money.
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