Environmental science and technology group Accsys Technologies (LON:AXS) saw its shares edge up by 18% to 0.26p this morning on news that Diamond Wood China, the company that holds a licence for Accsys’s Accoya wood, was closing in on a deal to build the first Accoya wood manufacturing facility in Nanjing, China.

At Diamond Wood’s AGM yesterday, the company confirmed that it was in advanced discussions with two independent parties who have each expressed an interest in investing sufficient funds to build the new manufacturing facility. One of those parties has signed a term sheet in connection with the fundraising and discussions are on-going with the other party. Accsys said it was delighted with Diamond Wood's progress on the fundraising and was looking forward to further positive news connected to the new facility in the near future.

Earlier this month, Accsys posted a net loss of €52.1m for the year to the end of March compared with a profit of 5.4m in 2009. Revenues fell to €16.7m from €31.2m with licence revenues down 71% at €6.7m. The firm posted a pre-tax loss, before impairment charges relating to Diamond Wood, of €16.7m and losses after the impairment of €52.2m against a profit in 2009 €1.8m. At the time, chairman Willy Paterson-Brown said he was confident that the new plans that it now expected to be carried out, together with a number of changes which it had made within Accsys, had left the firm in a stronger position.

Accsys operates five subsidiaries, most of which are branded under the group's Titan Wood banner. Between them they develop, manufacture and distribute Accoya-branded wood products, which are developed using wood acetylation, where additional 'acetyl' molecules are attached to wood to increase its durability, dimensional stability and colour stability.

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