Although he treats Palm Beach, Florida, like a second home, it took more than a decade for Czech billionaire Karel Komárek to take his business across the Atlantic. He says he was just waiting for the right angle to breach U.S. markets, and now the founder and CEO of KKCG – one of the fastest growing investment groups in Central Europe – finally found one: producing and selling methanol.
On a sunny spring morning I meet Komarek – 47 years old and worth nearly $1.8 billion – in Palm Beach for a bike ride, followed by lunch. The billionaire chooses to spend time in Florida because the weather allows him to practice all his favorite sports, from biking and golf to paddle-boarding. Cycling 40 to 50 miles along the coast three to four times a week has put him in great shape and I can hardly keep up with his pace. When the ride finally ends, we go to Mulligans Beach in Lake Worth where, over hot chicken wings and ice-cold beer, Komarek tells me about his ambition to conquer the U.S. market with his newly established US Methanol LLC, based inn Charleston, West Virginia.
“This venture is our first major investment in the U.S., which fits with our long-term strategy to expand into developed foreign markets,” says Komarek. “I believe we have the right timing and the right idea. This business is set to turn out fairly profitable.”
Komarek wants to take advantage of low oil and gas prices in the U.S., which are now less than half the average price in Western Europe. Methanol is produced from natural gas and has a wide range of uses in various industries—as a solvent, fuel and antifreeze, as well as a feedstock for the manufacture of chemicals and biodiesel.
“Methanol is a very suitable addition to KKCG´S product portfolio. It will diversify our exposure in this volatile energy price environment,” says Komarek, whose already diverse investment portfolio includes crude oil and natural gas exploration and production, lottery and gaming, tourism and real estate. “What I like about methanol production is that it is a nice niche product you can easily scale.”
Komarek´s US Methanol will own and operate a portfolio of mid-sized methanol plants in West Virginia, with initial daily production of around 400 to 500 tons. Its first plant will be relocated from a site in Slovenia to the U.S. A Second plant will be moved there from South America.
American methanol production was only fairly robust. In years prior it had been deemed unprofitable and most plants were shut down by the mid-2000s. The market then heavily relied on imported product, with as much as 90% coming from countries like Trinidad and Tobago and Venezuela, according to global shipping consultancy, Drewry.
But this is about to change now. There is an expectation in the industry that the U.S. production will be economical again thanks to low gas prices. “We have been seeing a resurgence of U.S. methanol production driven by the shale gas revolution,” says Gregory Dolan, CEO of Methanol Institute. “Plants that had been mothballed for a decade are now operating.”
Komarek is not the only one with the idea of moving a plant from abroad. Canadian firm Methanex relocated two plants from Chile to Louisiana in January. And there are others building greenfield facilities in Texas and Oregon. “They want to take advantage of low cost natural gas,” says Dolan. “There is certainly an additional appetite for U.S. methanol production capacity.”
Komarek´s new methanol plant will be constructed by an as yet undisclosed EPC contractor, which the fourth wealthiest Czech claims is “one of the best on the market.” KKCG hired executives Brad Gunn and Richard Wolfli to manage the project. Each has more than two decades of industry experience with companies like Ithaca Energy and RockBridge Resources.
“I believe that man should work till the day he dies, do sports till the day he dies and live well till the day he dies,” says Komarek. Besides sports, he works up to twelve hours a day, running his international business via email and phone. “You need to keep your muscles and brain working otherwise they degenerate.” His new American venture surely will keep him toned.
POST WRITTEN BY: Michael Mareš
Published at: www.forbes.com