We take it all for granted. What’s that you ask? The “stuff” we use day in and day out, but don’t think too much about. It’s called “infrastructure”. For instance, when you turn on the tap, you expect water to come out of the faucet. You don’t give it much thought. But behind that simple action, millions of dollars worth of pipes, pumps, water towers, etc had to come into play. Likewise, when that same water swirls the drain and finally gurgles its way down the pipes, it’s “out of sight out of mind’. But again, a labyrinth of pipes, drains, pumps, etc makes it all happen. From the roads we travel on, to the bridges we cross, to the tunnels we drive in, there is a maze of infrastructure that supports our daily activities, and for the most part, it performs flawlessly. Until it doesn’t.
There’s a problem with all this infrastructure, and the biggest culprit is age. Some of the most populated cities such as New York are running water systems and sewer systems that were designed and put in place over 100 years ago. The pipes are cracked, the leaks are mounting. Our highways are poster children for potholes, embankment erosion, and drainage problems. And then there are the bridges. That takes infrastructure trouble to a whole new level.
If you turn on the water and nothing comes out, it’s not the end of the world; it’s generally just the beginning of a bad day. But, when you drive across a bridge, any failure in that structure no longer becomes an annoyance to your day. It very well could be a life and death situation, and the bridge collapse in Minneapolis not that very long ago hammers home that point. In that tragedy, 13 people lost their lives as the bridge buckled and collapsed during evening rush hour traffic. It’s amazing that more lives weren’t lost.
When a support function of our infrastructure fails, we can be inconvenienced for a while, but usually it’s not going to lead to tragedy. When it comes to bridges, tunnels, structures, and even large equipment such as a crane boom, a failure can indeed lead to major injury and multiple deaths. So it’s no wonder that immediately after that disaster in Minneapolis, hundreds of workers were mobilized to increase the inspection rate of our nation’s bridges. Unfortunately, until recently, inspectors didn’t have much to work with besides their eye sight. Visual inspection was the gold standard for 85% of all bridge and ironwork.
But Material Technologies Inc. (Best known as “Matech” and trading under the symbol MTTG) has changed all that, and frankly none too soon. Material Technologies Inc. is an engineering, research, and development company that provides technology solutions for detecting, measuring and monitoring metal fatigue in metal structures and equipment. By utilizing patent protected technology, Matech has the ability to monitor metal stress and fatigue, and assign real world values to any changes in a structure’s integrity.
The volume of cars and trucks traveling our roadways has increased every year since WWII. A majority of the structure designed to carry the loads is severely overburdened and aged. Matech’s technologies allow better, faster and most importantly more precise measurement and monitoring of the true “soundness” or lack thereof, of these structures.
Is this important? In a nutshell, yes indeed. First let’s consider the scope of the “market”. For the purpose of this example, let’s simply focus on just one aspect for the utilization of their technology, improving bridge inspections. Federal law demands that bridges be inspected periodically and some 190,000 steel frame bridges must be inspected every two years at a minimum. Federal Highway Administration has stated that some 26% of our nation’s bridges were never designed to handle the volume they receive. They also suggest that almost a full 40% of all highway bridges are structurally deficient in some manner and maybe as many as 35,000 are functionally obsolete.
When large segments of the roadway collapsed during the violent earthquake in Southern California ten years ago, the public awareness of the bridge and tunnel situation was thrust on them by an act of Mother Nature. The cry went up for better engineering and billions of dollars has been spent upgrading and reengineering many miles of elevated roadway. When the Minneapolis disaster occurred, and the only culprit found to date has been estimates of metal fatigue, the public has become much keener on the concept of how badly our bridge system is in need of better inspection and monitoring. Tens of millions of extra dollars is being spent on increased maintenance and inspection, in an out and out attempt at warding off any similar disasters as witnessed in Minneapolis.
As an investor, one of the first things one wants to know about any company is if indeed there is any demand for their products. In Matech’s case the verdict is in, and the decision is Yes, absolutely. Two hundred thousand bridges that need inspection means that in any given year almost 100K bridges are being inspected by various crews. Matech has the technology and the monitoring equipment to improve the accuracy of all those tests. That alone is a market worth being excited about. But there’s more, much more. Windmills, radar towers, electrical towers, Cell phone towers, oil rigs, and virtually any place that metal structure needs to be evaluated for stress related wear is in fact a “customer”.
With a customer base that large, Material Technology Inc, is certainly in the right place with the right products at the right time and investors with a keen eye for a growth market need to take a close look at this opportunity.
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