Zoltek (ZOLT) Announces New Subsidiary Targeting Auto Industry

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08:38:18 pm on April 12, 2010

Zoltek (ZOLT) announced after the bell today that they will form a new subsidiary to speed the development of lightweight carbon fiber applications for the auto industry.  No doubt an increasingly important industry as manufacturers look for ways to increase gas mileage to meet federal regulations in the next few years.  More than a dozen existing Zoltek engineers will join two highly regarded experts to lead Zoltek Automotive.  Dave Stewart, founder of Stewart Auto Research, will act as CEO, while Martin O’Connor, who has experience in composites while working in Formula 1 racing, will act as President. 

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Zoltek CEO Zsolt Rumy acknowledged that the use of carbon in the auto industry is a much more complex endeavor than providing for the wind turbine industry. “We have long identified the automotive industry as the biggest single potential user of our low-cost, high-performance carbon fibers. While Zoltek has been active in developing automotive applications for carbon fibers for many years, the launch of Zoltek Automotive represents a new initiative to more closely align our development activities with the market opportunities we have identified. We have successfully demonstrated our ability to provide high-volume customers with assured long-term supply of carbon fibers at reliable low costs. As a result, we were able to unlock the first big commercial application for carbon fibers–wind energy– producing the largest and most efficient wind turbine blades.

Technically, ZOLT is a green stock to keep an eye on.  After struggling for more than two years, the stock has begun to see some bullish action and may just be ready to bust out of the long down trend.  It’s currently carving out a bullish wedge formation above the 50 and 200 day moving averages and a high volume move from here presents an entry signal.  Shares were flat today.

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