Over the last four years, Sofame has adapted to challenging market conditions which included low natural gas prices due to fracking supplies, tight capital investment budgets at end-users, and an absence of bank financing in the normal course of business. Sofame undertook extensive cost reductions, and began a program of outsourcing in 2011. The new business model allowed the company to cut overhead, incur costs only when contracts are in production, and pursue more projects simultaneously. Closing seven orders values at $2.4 million was a significant achievement in 2012.
It is Management's opinion that the current order book does not reflect the marked improvement in demand for the Company's custom engineered industrial energy efficiency products. Ten projects are being pursued presently with a total value exceeding $4.6 million. Four of these projects are close to fruition. In the first quarter of calendar 2013, well head gas prices recovered from about $3.25/DT to over $4.25, a gain of 30%. Interest in natural gas as a fuel is driving up the prices, and two-year paybacks on energy efficiency investments has become the norm for Sofame's industrial water heating solutions. These results are better than expected compared to the past several years of history.
Sofame's operations are now running smoothly, and marketing in the United States is accelerating since we have installed projects in New York, New Jersey, Illinois, Michigan, Delaware, Colorado, North Carolina and Maine. The company has identified new key suppliers to complete design, engineering, fabrication, installation and start-up phases of its work. Through experience in the field, the team has retained the best partners and strives to supply products which meet expectations and budgets. The Company is encouraged by the year's results so far and is striving to close more orders and generate consistent revenues and profits with a larger volume of contracts.