The recent issue of corporate bonds by a Prague-based supplier of raw materials may not seem very newsworthy. However, the bond sale actually reflects changes happening in both financial and manufacturing markets. They are notable trends for sensible investors.
The sale was created by AG CHEMI GROUP who have been supplying industrial chemicals to manufacturers for more than 25 years. The company now has plans to also develop and produce nanotechnology to their customers and has issued a limited number of corporate bonds to raise funds for this expansion.
It is a situation that echoes the current times, representing a valuable investment opportunity.
The key points of these trends include:
1. The Returning Popularity of Corporate Bonds
For a long time, one of the most common ways for a company to raise investment funds was to issue shares (selling part of itself to investors). However, in recent years, corporate bonds have become increasingly popular for both investors and boardrooms alike.
A corporate bond is a financial tool which functions like a loan. The company borrows money from an investor for an agreed length of time in the form of a bond. Interest is paid on that debt either monthly or annually, and then the full value of the loan is repaid to the investor when the bond matures.
Historically, corporate bonds have been used to fund expensive projects. These large enterprises include power companies investing in the electrification of towns and cities in the late 19th century, the building of the trans-America railway network, as well as the construction of many dams, bridges, and other capital projects including the Panama Canal. All these ventures were funded (at least in part) through the sale of corporate bonds.
While the selling of stocks and shares has surpassed corporate bond activity in the past few decades, there has been a recent resurgence in issuing them. Noteworthy companies which have sold bonds include Amazon ($10 billion bond issue), Microsoft ($20 billion bond sale used to buy LinkedIn), NY World Trade Center (built through $1.8 billion bond funding), Alphabet Inc. ($10 billion bond in 2020), and Alibaba (raised $5 billion in February 2021).
Given the success for both sides in these bond sales, todays investors would do well to consider them as a helpful financial tool which can provide a steady return.
2. The Growing Market for Nanomaterials
A further trend for investors to be wary of is the progress being made in nanotechnology. For while many media headlines report on the breakthroughs being made with nanomaterials in electronics, computing, and pharmaceuticals, the use of nanotechnology is much more extensive than these high-tech sectors.
Instead, nanomaterial researchers are finding uses for nanotechnology in the production of glass, ceramics, industrial chemicals, rubbers, construction materials, paints and coatings, flooring systems, household chemicals and cleaners, in dyes and clothing production, as well as in modern composites to make cars, ships, planes, wind turbines, satellites, military hardware, spacecraft, and plastic.
This burgeoning market for nanomaterials is based on how nanotechnology can be applied to materials to give them different properties. For example, a paint can be made to dry quicker, fade less, and be crack resistant. A rubber can be made more durable yet still retain its flexibility. Clothes can keep their colour for longer, plastics can be made stronger, and flooring systems can prevent the build-up and sudden discharge of static electricity.
While these may sound like small advances, for manufacturers in each of these sectors, the application of nanotechnology can be the difference between failure and market success.
3. The Growing Strength of the Czech Nanotechnology Sector
The use of nanomaterials is changing manufacturing everywhere, especially in the Czech Republic where the nanotechnology sector is a global leader with great promise for further development.
Factors supporting the Czech nanotechnology industry include:
· The Czech Republic is home to the Prague science and technology cluster (known as STAR).
· The Czech Nanotechnology Association ensures close cooperation exists between business and academia.
· The first reliable method of spinning 200 nm nanofibers was developed in the Czech Republic.
· The Czech nanotechnology industry has considerable government support in terms of both administration and finance.
· Many Czech universities have large, well-funded nanotechnology departments, such as RCPTM in Olomouc, The Institute for Nanomaterials, Advanced Technologies, and Innovation at the Technical University of Liberec, and the Nanotechnology Centre at the Technical University of Ostrava.
· One third of global production of electron microscopes comes from the Czech Republic.
· Establishing a nanotechnology R&D centre in the Czech Republic costs half as much as it does in Germany or the USA.
4. The Excellent Returns Offered in AG CHEMI GROUP’s Bond Sale
With its strong customer base and years of experience in supplying raw materials, AG CHEMI GROUP is expanding rapidly into the nanotechnology sector.
The company (which sponsors this website) is already suppling clients with nanotechnologies to improve their products. It has established a wide range of ‘off-the-shelf’ nanomaterial products and has two patent-pending processes for the modification of plastics with nanotechnology.
However, the development of nanotechnology solutions involves detailed theoretical design followed by lengthy laboratory testing and trials before production can even begin. It is a process which requires considerable financial investment.
The aim behind AG CHEMI GROUP’s latest corporate bond issue is to make further steps into this market, create a production line by September 2022 with a 500-tonne capacity expanding to 1,000 tonnes by March 2024, and the construction of a NANO RESEARCH CENTRE focused solely on developing nanotechnology for manufacturing.
As a whole, the company is well-placed to make a success of its expansion, and so is able to offer an interest rate of 6.8% p.a. payable in monthly instalments. There are no brokers fees or handling charges, and with investment sums starting from as little as 10,000 Kč, it is easy to start investing. You can also work out your returns with this simple online calculator.
Wise investors should take note of economic and industry trends. Current shifts in technology and financial markets are highlighting the advantages of corporate bonds in nanotechnology companies.
If you are looking to invest, then you should consider investing in nanotechnology.
To find out more, visit AG CHEMI GROUP.
Photo credit: schliff from Pixabay, icondigital, ar130405, & AG CHEMI GROUP