Fake whisky galore – and that’s great news for scientists who can detect it
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SCOTCH whisky is widely considered to be the best in the world – so much so that many unscrupulous distilleries try to copy it. In Thailand, for example, up to half the whisky trade is fake, amounting to about 12 million bottles a year. This is mirrored across Asia and the Scotch Whisky Research Institute is determined to address it.
Finding the counterfeiters is tough, but the institute is discussing potential solutions with Microsaic Systems, a small, Surrey-based firm that has developed a device to measure and analyse everything from food and drinks to fuel.
Traded on Aim, Microsaic’s shares are 46½p and should increase substantially as the company acquires new customers and cements its reputation in the mass spectrometry market, an industry worth more than £3billion a year globally.
Mass spectrometers are used to analyse substances, from earlystage drugs to the blood of murder victims and the purity of drinking water. Used by pharmaceutical companies, food manufacturers, forensic scientists and general industry, they play a crucial role in key aspects of everyday life.
Traditionally, these instruments are big – over 6ft long and weighing up to 16st. They cost at least £100,000 to buy, annual service charges are about £10,000 and they can only be used by highly specialised operators with doctorates in their field.
Microsaic has developed a miniature version, the size of a microwave oven. Its mass spectrometers cost about a third of the price of traditional models, do not require annual servicing and can be used by technicians rather than PhD chemists. Crucially too, Microsaic’s equipment can be transported to where it is needed, meaning operators can obtain instant results, rather than having to send substances to centralised laboratories.
The business was founded in 2001 by three professors from Imperial College, London. The trio then spent a decade creating Microsaic’s first product and the company joined Aim in the same year, 2011.
Breaking into an established market can be difficult, particularly for small firms that have to keep a close eye on their cashflow. In 2012, analytics expert Colin Jump was parachuted in to the company to help take it from one with great ideas to a money making enterprise.
Jump concluded that Microsaic would stand a far greater chance of success if it focused on its groundbreaking technology, outsourced manufacturing and worked with much larger companies to bring the mini mass spectrometer to market.
The strategy is beginning to bear fruit. Microsaic has signed contracts with several large scientific companies to supply its devices and this month announced a partnership with US giant GE Healthcare.
Under the deal, Microsaic will initially supply 50 units, scaling up to more than 200 a year over the next four years. These will be combined with GE’s own life sciences equipment and used to enhance drug research.
GE is one of the best known medical technology companies in the world, so its decision to team up with Microsaic is seen as solid proof that its instruments work and deliver concrete benefits. However, Jump is also in talks with a number of other partners, because the devices have the potential for so many different uses.
They also require consumable products, which need to be replaced every time the machines are used. Over time, these should provide substantial profits.
Discussions are ongoing with security companies involved in airport screening, as Microsaic’s instruments could detect possible explosive material more accurately than technology already in use.
And Southampton University is working with the firm to see if its devices could be used to make sure aviation fuel is pure before flights take off – an essential part of aircraft safety.
There are even talks with the NHS about blood tests. GPs routinely send blood samples to hospital labs to be analysed for anything from cholesterol levels to vitamin deficiencies. But this can be costly and time-consuming. Using mini mass spectrometers could allow some of these tests to be done in local clinics or health centres. The results would then come through almost immediately, providing significant savings in both time and money.
Midas verdict: Microsaic’s revenues last year were £1.2million and the group is loss-making, as it invests in research and sales. However, it is backed by top institutions such as BlackRock and Fidelity, and entrepreneur Nigel Wray has a large stake in the business.
The company has spent years developing its instruments, but success is now in sight. The shares are not for the risk-averse but, at 46½p, they are worth a punt for the adventurous investor.