Demand for Virus-Killing UV Rays Boosts Niche Businesses

(Bloomberg) --

With coronavirus lockdowns being lifted worldwide, businesses ranging from shops to hotels and bus operators are looking for new ways to avoid exposing their customers and staff to the pathogen. A couple of companies are betting a potential solution is to be found in invisible, ultraviolet light.

Graefelfing, Germany-based Dr. Hoenle AG, with a 240 million euro market cap and just 108 million euros ($118 million) in sales, saw its shares jump 30% on Monday, after German media picked up on its research project claiming the coronavirus “can be killed reliably within seconds” using its lamps emitting ultraviolet light. The shares have since pared gains to 16% for the week.

Ultraviolet-based disinfection solutions for food packaging and processing clients such as Tetra Pak AB and Krones AG accounted for about 5 million euros, or 5% of Dr Hoenle’s sales in 2019. Clients from many industries have been approaching Dr. Hoenle for its fans, lamps and sterilization boxes since the beginning of the pandemic and even more since the company published the project’s findings last week, Chief Financial Officer Norbert Haimerl said in an interview.

Its global market share in ultraviolet-based disinfection stands at no more than 5%, according to Warburg analyst Malte Schaumann.

Customer demand is coming from industries such as retailers, hospitals, transport companies seeking to sterilize buses and trains and hotel operators who want to use the devices to disinfect entire rooms, the CFO said. “With some companies we are in talks about orders of several hundred or even a thousand devices,” he added, expecting to close some of the orders starting next month.

Because of the uncertainties associated with the coronavirus crisis, Dr. Hoenle had furloughed many of its roughly 600 workers on state wage support. With the new momentum, Haimerl plans to take the entire sales team out of the wage support programs in early June and may soon do so for the production staff as well, he said.

Warburg’s Schaumann sees potential for Dr. Hoenle to triple revenue in the segment to as much as 15 million euros within two or three years, according to a note on Tuesday. While the company’s successful test of ultraviolet tech against the coronavirus is a long-term positive driver, the project’s results are unsurprising and the market’s expansion will take some time, Schaumann said.

Radiation Risks

Dr. Hoenle’s products designed to kill the coronavirus include fans that disinfect ambient air without exposing people in the room to the dangerous radiation. Other devices such as lamp towers can only be used in empty rooms, because the radiation can harm human skin and eyes. Staff using disinfection hand lamps must wear protective equipment.

Denmark’s UVD Robots ApS meets this challenge by offering robots that autonomously disinfect rooms in hospitals before patients or staff move in. Demand for the robots has grown “dramatically” in the first quarter, the company says on its website, with Chinese hospitals ordering more than 2,000 units since the outbreak of the pandemic.

Among other companies, German technology group Heraeus Holding GmbH has developed a hand-held device resembling a vacuum cleaner to radiate and disinfect anything from vehicle interiors to computer keyboards or bathroom faucets, as well as a stainless steel box that kills germs and viruses on small objects within two minutes. The company is working on robots that move along office floors or through train stations and disinfect the air as they go, according to emailed comments.

Haimerl is optimistic of gaining a decent share of the growing market. “The pandemic has sensitized people to the importance of disinfection, and I believe that the topic will remain in their heads permanently after the experience,” he said.

©2020 Bloomberg L.P.