Good day, and thank you for standing by. Welcome to the Accsys Technologies PLC preliminary results webcast. At this time, all participants are in listen only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press Star and One on your telephone keypad. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Robert Harris. Please go ahead.
Thank you very much, and welcome everyone to our full year results presentation for 2022 financial year. Before we start, as always, I'd like to pause for a photo moment. As you know, we are very proud of our products in Accsys. This is an architect-designed family villa in Madrid with Accoya windows, Accoya doors and Accoya cladding. Accoya's dimensional stability and durability make it a great choice for this poolside home. I trust you all agree. We have the usual disclaimers that I know will be familiar to you all. Thank you. In terms of this morning's agenda, firstly, I'm going to give you a quick initial overview of the results. Then William Rudge is going to take you through the financials. I'll then walk through the business review, including how we continue to focus on the compelling growth opportunity for our products and furthermore, our outlook.
Looking across today's results, we have delivered good revenue growth in FY 2022, despite remaining capacity constraints at Arnhem and broadly flat sales year-on-year of just under 60,000 cubic meters. Group revenue was up 21% to EUR 121 million, driven by sales prices and pricing power, where we have continued to successfully offset cost inflation. Gross profit is up 9%. Demand for our products remains really strong and continues to be in excess of capacity, and we have just a 2% market share of our target market, leaving us about 98% opportunity. We have made substantial progress in our capacity expansion projects despite ongoing challenges during the year and in the Q1 of FY 2023. Construction of both the world's first Tricoya plant in Hull and our Accoya plant expansion in Arnhem is largely complete.
While some near-term issues have been identified, which are being addressed and causing some additional delay, commissioning of both facilities is in progress, with both expected to be operational in the coming months. We really have worked our socks off to realize this progress. Our U.S. JV's new 43,000 cubic meter plant to service a substantial North American market is under construction, and I'll update more on our projects in the business review. EBITDA is up 3% to EUR 10.4 million, with a higher gross profit being partially offset by investment in our organizational capability ahead of increased capacity coming online. Importantly, we are investing in our organizational capability, people, talent and processes to manage and deliver the growth ahead and crucially, growing sustainably. We've made good progress on our ESG goals this year, including on our safety first culture, which we are building in Accsys.
Our lost time incident rate for the group is now at 0.5 versus 1.8 last year, which is really, truly great result, and we will not stop here. At this point, I will now pass over to Will, please.
Thank you, Rob, and good morning, everyone. First of all, another image very briefly here. It's of an airport hotel in Rotterdam, in the Netherlands. Accoya was selected for the cladding on this project, and the project had a particular commitment to sustainability, so another excellent project demonstrating Accoya in use. I'll move on to look at the financial highlights, and these are the financial highlights for our year to March 31, 2022. As Rob said, Accsys has delivered good revenue growth driven by strong demand. Our Accoya sales volumes have remained relatively flat at 59,649 cubic meters, reflecting that we have been operating at the capacity levels with a slight reduction compared to last year, reflecting some isolated maintenance issues which we previously reported in the second half of the year.
The strong revenue growth of 21% were driven by an increase in our average sales prices compared to last year. That enabled gross profit to increase by EUR 3 million, with our price increases more than offsetting raw material costs, which I'll come on to. However, price increases and change to our sales mix resulted in our percentage gross margin decreasing, and I'll explain that in more detail as well. During the period, we continued to invest in our organization and in particular our people to support our future growth, and that resulted in EBITDA increasing by 3% to EUR 10.4 million on an underlying basis.
We have reported a net debt and an adjusted net debt and an adjusted cash figure, with the adjusted figures excluding the funding which is committed to be invested into our U.S. joint venture in Q1 of the new financial year. On this basis, the adjusted net debt increased by EUR 43 million, driven by EUR 45 million of capital investment in the year, principally into the Hull and Arnhem expansion projects. Moving on to the next slide, looking in more detail in our sales mix. During the year, we have balanced our customer demands with our capacity constraints, while successfully being able to target key growth markets. The left hand chart sets out the proportion of our Accoya sales by end market, with the percentages in the brackets reflecting the change to this proportion compared to last year.
Here we continue to see strong underlying demand for Accoya across our regions and with our Tricoya panel manufacturers. Notably, we increased sales into North America by 5% of total sales, which equates to 44% volume increase in the region to just under 10,000 cubic meters. This is where we are targeting the market ahead of our planned US capacity expansion. With total sales volumes largely flat year-on-year, other markets saw a small decline in sales volumes. This does not reflect a change in underlying demand, but a shift in the allocations, which also reflected a rebalancing following the previous year, which as you recall, was impacted by COVID. The chart on the right-hand side sets out the revenue growth year-on-year and where the overall 15% increase in Accoya wood revenue was generated.
The changes here are more significant than the volume changes as a result of the increased average sales price, but also changes to the product mix. Accoya sale price increases were implemented in June and September last calendar year and in January this year in most parts offset inflationary input cost pressures. However, average prices were also higher than the prior year due to changes in the product mix, which included growing proportion of Accoya Color together with a lower proportion material sold to Tricoya customers, which decreased to 22% of total volumes compared to 26% last year. One point of detail within the rest of Europe segments, we do sell a portion of our material via a tolling mechanism where the customer is responsible for the raw wood purchase, and here, tolling sales halved, and that's part of that rebalancing I mentioned earlier.
The next slide sets out in more detail how EBITDA progressed during the year and how we have sought to carefully manage our profitability at a time of increasing raw material costs. While the previous page highlighted that changes in our sales mix resulted in changes to the revenue, these sales mix changes had minimal impacts on our profitability. The sales price increase I just referred to enabled us to more than offset the raw material cost increases you can see in this chart. The increase in raw materials was driven predominantly by a 39% increase in our net acetyls price. While we continue to benefit from a partial natural hedge as a result of acetic acid by-product, this increase was driven by a significant increase in natural gas prices to which the acetyls pricing is linked.
Raw wood costs also increased, but more moderately and as we had expected. The increase in fixed overheads was largely due to logistics costs as we built up our inventory levels from a lower than optimum stock level last year and ahead of the fourth reactor coming online, and also labor costs, again, as we increased operations headcount ahead of the fourth reactor becoming operational. The breakdown for the EUR 3 million increase in Accoya operating costs shown in the pie chart. Much of this is due to higher headcount, with the main drivers being an increase in sales, marketing, and travel costs, following the reduction in the previous year and ahead of the new capacity come on stream in the new year.
In addition, we incurred EUR 600,000 of costs following acquisition of assets in the period which will enable us to significantly increase the volume of Accoya Color, which we expect to benefit from as volumes ramp up over the coming period. On the next slide, the chart shows how we've continued to improve profitability over time. The profit per cubic meter, represented by the bars. As a result of the price increases more than offsetting raw material cost price increases as just set out, the profit we make per cubic meter has continued to increase year-on-year with 11% increase last year to an average of EUR 595 per cubic meter.
However, our percentage gross margin, represented by the line, decreased as a result of price increases implemented to offset raw material costs, changes to the product mix, as well as higher acetic acid prices. Over the next period, revenue will be influenced by changes to product mix further, including for Accoya Color and following the commencement of the Hull plant, which will free up capacity in Ireland for higher price to Accoya. In addition, in the new financial year, we've implemented an energy price premium from May, which enables us to pass on the effects of the higher volatile gas prices and the impact that has on our input raw material costs. We previously set out that we continue to expect a 30% gross margin to be achievable, and this continues to be the case.
However, as a result of these sales mix factors and inflationary price increases, the percentage margin may continue to vary a little. However, importantly, we will target further growth in the profit per cubic meter and expect to be able to benefit from the economies of scale with the fourth reactor coming online in the next quarter. The next chart, this sets out the movement in net debt in the year, starting from net debt of EUR 12.2 million at the first of April and ending with net debt of EUR 27.2 million at 31 March 2022. There are a number of moving parts worth highlighting here. The Accoya business and its improved profitability now generates significant cash inflows, EUR 21.3 million in the year.
While the Tricoya corporate and R&D segments have partially offset this, we expect the Tricoya segment to generate positive returns following the start up of the whole plant. The EUR 9.2 million increase in working capital in the period largely reflects an EUR 8.1 million increase in inventory levels. In particular for raw wood, which started from a low point at the beginning of the year, but ended higher than expected, given a lower than anticipated production levels in the second half of the financial year. The significant capital investment was predominantly split between two key projects, with EUR 24.7 million invested into the Arnhem expansion and EUR 18.4 million into the Tricoya plant in Hull.
It also includes just under EUR 1 million in respect to the acquisition of assets from Lignia, which have been successfully repurposed in the second part of the year to enable us to grow sales of Accoya Color. The Accsys equity issuance represents net proceeds from the placing and open offer completed in May 2021. This was primarily to fund the expansion of the Accoya business into North America through the construction of the U.S. plant with our joint venture with Eastman. In this regard, EUR 3.8 million was invested into the U.S. joint venture in the period. Following the final investment decision in March this year, the remaining EUR 27.8 million is committed to be invested, but will be invested in Q1 of the new financial year.
As a result, we have shown an adjusted net debt figure of EUR 55 million, which excludes this cash. The next slide briefly summarizes our cash position. Just explain the component parts of this. Our cash at the end of March 2022 was EUR 44.1 million. However, this included the EUR 27.8 million of cash committed to the U.S., as I just explained. It also included EUR 10 million of cash, which is held by and pledged to ABN as part of our U.S. joint venture financing arrangements, which I'll come onto. As a result, excluding these, our adjusted cash was EUR 4.3 million.
Subsequent to the year-end, in May, we completed a capital raise with a net EUR 19 million raised, and that's to help fund EUR 7 million of additional costs associated with the fourth reactor, as well as with the balance to improve liquidity and to strengthen the balance sheet in the context of EUR 200 million of ongoing capital projects. The next slide, the final finance slide summarizes our key financing arrangements. These have changed substantially over the last year with the result that we've simplified our historic debt structure, reduced our financing costs, and put in place a financing package to support the U.S. project. On the left hand is a summary of the funding arrangements for Accoya U.S.A, the joint venture with Eastman.
The details are, as announced in March, with the expected $336 million total project cost to be funded through a combination of debt and equity. Just to summarize this, for those that haven't seen it before, the joint venture has secured $80 million of debt facilities from First Horizon Bank at a low interest rate, lower than the average cost of debt to Accsys. Eastman and Accsys will fund the balance of our equity in proportion to our 40%-60% equity stake. Accsys is 60% owner. However, to secure these favorable terms, both shareholders have put in pro rata guarantees to support that debt. In Accsys's case, we've further supported our $30 million guarantee with a $20 million letter of credit, which has been issued by ABN AMRO.
To support that letter of credit, Axis has agreed a EUR 10 million convertible loan with De Engh and have placed the proceeds of that on deposit with ABN AMRO. On the right-hand side, to explain these parts. In October, we successfully completed a full refinancing with ABN AMRO, which enabled us to repay five different historic debt facilities with a single-term loan, which significantly reduces our interest costs going forward. Part of the arrangement also included a revolving credit facility, which was subsequently increased to $25 million in March. $20 million of this is used to support the U.S. project, as I just set out. The whole plant construction is being funded by the arrangements in place of the Tricoya U.K. Limited consortium entity.
This includes a EUR 17 million loan from Axis, agreed in November last year, and a EUR 17.2 million loan from NatWest. We are in discussion with NatWest about securing a EUR 3 million increase to the loan. However, it's important to note that as a result of this and an element of the forecast project cost being unfunded, this facility remains in technical default. In addition, in June, we identified some additional costs required to complete the whole plant. As a result, we are in discussion with our consortium partners regarding the funding options for this. With that, I'll hand back to Rob, who I know will come onto the state of the whole project in more detail.
Thank you, Will. Turning now to the business review. Just before I do that, this picture shows Accoya cladding and decking on the refurbishment of New Zealand's oldest surf life-saving club, looking out over the Pacific Ocean. Interestingly, the project also used Tricoya on the roof overhang. Both products are going to age well against the big surf and sandstorms in this coastal environment, and actually look really great. I will start with a quick recap on what we do, our products, our market, and our strategy for those who are newer to Accsys.
Our proposition is this: We have world-leading products and innovative technology with a large market opportunity of over 2.6 million meters cubed, of which to date we have just 2%, coupled with a global growth strategy to increase our production capacity by 5x to 200,000 meters cubed by 2025. We sell two key product brands into the building materials market, which you can see here on the right of the screen. Firstly, Accoya, our solid wood product brand, and also our more recent innovation, Accoya Color, colored surface decor, and with all the same performance properties as the original Accoya. Our second product brand is Tricoya, our chipped wood elements that are used to make high-performance panels. We make our products through unique and protected processes and technologies.
We use acetylation, which as I've referenced before, is a bit like pickling, using acetic anhydride and industrial vinegar to transform sustainably grown softwood into our high-performance wood products. Essentially, our technology boosts nature. Our process transforms our wood into a high-performance product that is highly stable. It doesn't shrink, it doesn't move, and it lasts a very long time. Two key things that are valuable in wood performance and why our customers just can't get enough of our products. It's important to mention that these are also highly sustainable products compared to competing materials, from wood plastic composites to aluminum to PVC or even tropical hardwood. This is why we say that we really are changing wood to change the world. Firstly, turning to the Accoya business segment. As mentioned previously, the group revenue growth has been driven by Accoya revenue growth, driven by increased sales prices.
Overall, across the year, our existing three reactor plant at Arnhem has been running at capacity. In Q4, we reported some temporary production downtime, primarily due to the installation of the new fourth reactor and specific maintenance work to address isolated plant reliability issues. We have a team identifying areas for process improvement and production efficiency in an ongoing sense. During the year, the team worked hard to rebuild inventory levels at Rawwood to be ready for the startup of R4, replenishment post-COVID, and to insulate our business in these macro uncertain times. I should also mention that Accoya Color, our innovative new product in the Accoya family, which is actually now gold-level Cradle to Cradle certified, I hasten to add, is proving very popular. During FY2022, we have won a number of industry awards for our product brands, both for their performance and sustainable attributes.
Furthermore, although still in the pilot stage, our Accoya Offcuts program continues to build momentum, with manufacturers supplying their Accoya offcuts back to us, which we then upcycle for use in making Tricoya. In the period, as Will mentioned, demand and sales volume in North America has been really strong, and I'll focus on this result for a moment on the next slide. During FY2022, we have increased the volume of Accoya available for supply to North America to ramp up sales volumes in the region ahead of the new production capacity coming online. North America represents the largest potential regional market for our product, with an achievable market for Accoya of up to 1 million cubic meters per annum. In FY2022, it's the first time we've been able to supply higher volumes to a market and just see what happens.
We have seen 44% growth, and we could have sold a lot more. Our team has done a super job with our customer and sales platform. We have five great distributor clients or partners, and importantly, have proven that we can replicate our sales model globally, implementing our successful Approved Manufacturer program in Europe and now in the U.S. As you can see from the pictures on the right, Accoya is being chosen for beautiful, high-quality projects across North America, and where the different climatic environments of North America let Accoya really show its strength. From a civic building restoration in the warm humidity of Florida on the top left to a Malibu beach home on the California coast on the top right.
Accoya also featured in an architecturally award-winning New York State home, where it will weather those cold winters there as well, and actually would do the same on the Aspen Fire Department in the Colorado Rockies, which you can see in the picture on the bottom right. Moving to this next slide, during FY2022 for Accoya, we had three main areas of strategic development. First, a single reactor, 33% expansion to the existing Arnhem plant, which we call R4. Secondly, the construction of a new two-reactor plant in the U.S. under our JV there. Thirdly, a smaller acquisition of a site in the U.K. to allow us to produce Accoya Color in-house. I'll go through each one in turn.
At Arnhem, looking at FY2022, overall across the year, we progressed construction of R4, which will add 20,000 cubic meters of capacity to bring the total to 80,000 cubic meters capacity per annum. At the end of the year and into the start of this financial year, we faced some bumps in the road in the anticipated completion of this expansion. Firstly, in early March, we reported challenges in the final installation and experienced temporary production downtime at the Arnhem plant. Following this, early in the new financial year, we experienced further unplanned delays in the final installation, the tie-ins, as we call them, for the fourth reactor, and delays in the supply of certain equipment, which we also reported in May.
This led to a delay in the expected operational startup of R4 until June, and resulted in a further unplanned second shutdown across the plant in April/May. Commissioning of R4 is well underway, and as reported in May, this progressed to actually getting wood into the reactor. I need to say here that the plant's existing three reactors are now back up and fully operational. Since May, commissioning work has continued with vigor. During commissioning and testing in June, defects were identified in certain previously installed items of equipment which required remedial work to get them repaired. This remedial work has resulted in operational target date of June to be extended from the first quarter in FY 2023 into the second quarter of FY 2023, and we expect this delay to unfortunately impact the schedule by at least eight weeks.
At present, the estimate for the remedial work cost to be around EUR 1 million, and we are looking to establish if these costs are recoverable. This further delay in June has been a deep frustration. On one hand, from experience, something that does arise in technical commissioning and testing processes to operate plants safely. On the other hand, we've actually scored some own goals. We are working as efficiently as we can to progress and complete these remedial works. We continue to allow for a two-year ramp up of R4 to reach capacity. Rest assured, if we can accelerate this, we most certainly will. For completeness at Arnhem, our 100,000 cubic meters new stacker is successfully installed and will support the overall expanded site with greater handling efficiency and improved safety. Turning now to the U.S.
Under our 60/40 joint venture that Will referenced with Eastman Chemical, we are building a new 43,000 cubic meters capacity Accoya plant at their Kingsport, Tennessee site, which will replicate our existing Accoya technology in Arnhem. In March 2022, we reached a final investment decision to proceed with the project and moved to commence construction with ground broken in April 2022. To paint a picture, and you can see here on the bottom right, what was formerly a car park on the Eastman industrial site is now being transformed with deep foundation piles to now install our new facility and provide those foundations.
We have been proactive in locking in the purchase of equipment early to help manage the macroeconomic inflationary pressures, and with a focus on stronger project management and applying the lessons learned from Hull and Arnhem, we're now fully leveraging Eastman's considerable project management expertise and capabilities in this project. Construction is scheduled to take around two years. Finally, during the year, we expanded our ability to produce Accoya Color through a great small acquisition in the U.K. The integration and site repurposing went very well, and it was operational within a single month of taking over the site last August. Further expansion in the future is possible to support the strong growing global demand for this great product. Turning now to Tricoya. As you know, we are building the world's first Tricoya plant at Hull in the U.K.
Looking at the project as a whole across FY 2022, construction progressed at pace after challenges in the first half of the year and the termination of the EPC contractor. We took over the final construction project management ourselves. The construction is now largely complete. Commissioning is in progress in stages through different zones across the site. Mechanical and electrical commission is well underway and began in March, and utilities were brought into the plant from April of this year. Wood chip commissioning is progressing to further stages of the plant, with steam testing to follow next. On-site, there is currently a real buzz of progress. Electrical control systems and dashboards are lighting up, and we're checking through actions and items on the commissioning list. However, today we are also reporting some slippage in the timeline to completion.
Related to this, we have reported updated expectations on the total project cost for the Hull facility. Since May, through the commissioning process, further ongoing challenges in completing certain day-to-day aspects of the construction have been experienced, and commissioning has identified necessary rework of certain areas. As a result, we now expect completion in the coming months. With this, the project team costs are also running for a longer duration during these final resource-intensive stages of the project. In addition, we have been unable to mitigate certain third-party costs, including in relation to the mechanical, electrical, instrumentation, control, and piping work to the extent previously forecast. Our expectations for the total project capital cost for the project are now between EUR 94 million and EUR 103 million, compared to between EUR 90 million and EUR 96 million previously forecast.
We are in discussion with our consortium partners regarding the consortium's funding options for these additional costs. Notwithstanding the recent fundraise, given the recent developments outlined above, there is a risk that Accsys may not fund the full extent of any cost overrun at this time if an appropriate agreement with the consortium is not reached. As with Arnhem, we are deeply disappointed to report this slippage on cost and timing. However, we continue to work systematically through the commissioning processes. As you would expect, the Accsys board is actively monitoring the project to ensure the best interests of Accsys are maintained. To also just finally recap on Tricoya, we retain our Malaysia partnership with PETRONAS, and we will review the opportunity to build out Tricoya there once Hull learnings are established and the plant is fully operational.
Moving to the next slide, our people are central to us achieving our business goals, and we have stepped up the investment into training our existing colleagues, as well as bringing in strategic new hires into the business to ensure we have the right skills and the right talent across our different geographies. I want to turn specifically to how we are managing our CapEx growth projects. We recognize we still need to further improve the way we are delivering our capital projects. On the one hand, some of the slippage and delays are unavoidable against wider market dynamics. However, frankly speaking, there are also a level of underperformance by us, and I've discussed some of these own goals previously. There are five actions we are taking here to improve further the delivery of our capital projects. We are reviewing our group engineering and project finance capabilities.
We have changed internal reporting lines and accountability for the sites, so there are managing directors accountable for our facilities at Arnhem, Hull, and Kingsport to drive better site-level accountability and management. We're continuing to strengthen our internal project management teams and project cost management to provide greater and add necessary assurance that we deliver on time and on budget. We're also strengthening our contracting practices and capability. Finally, we are applying our learnings to our U.S. project and leveraging Eastman's project management expertise on the construction management side for our Kingsport facility. When it comes to ESG, we have a really holistic approach across the E, the S, and the G, which spans our 10 material issues. ESG is actually becoming part of our DNA. In FY 2023, we've made progress across the board, but I just want to call out health and safety again.
Last year, we introduced safety observation cards to drive a reporting and a continuous improvement culture within Accsys. Under our mantra of think safe, act safe, we have seen a big year-on-year increase in the number of safety observation cards submitted. 667 years to date versus 118 for the same period last year. We have set an ambitious target of 1,000 safety observation cards for the year. Across all of our ESG, though, we have been really focused on reporting and transparent disclosures. For the first time, we have submitted information to the S&P Global Corporate Sustainability Assessment, or otherwise known as CSA. Accsys was benchmarked with forest and paper product industrial companies, the strong majority of which are large companies with a market capitalization of over EUR 1 billion.
Accsys gains an industry percentile ranking of 61 and a company score of 38 compared to the industry average of 37. We're really pleased with our first year score, which creates a baseline and a way for us to assess our progress on our ESG journey against independent criteria in addition to our own self-set targets. We are determined to demonstrate that alongside our highly sustainable products, we are also committed to improving our business operations and becoming a corporate citizen that really is a force for good, changing wood to change the world. In summary, despite our lack of production capacity, we have still been able to deliver good revenue growth, demonstrating our pricing power and our ability to offset the inflationary environment.
Demand remains strong and the 44% sales volume growth in North America has been an exciting taster of what is ahead as we bring our higher capacity production products online and have more product available in the market. While we have made progress on our expansion products, with the US moving to plan, challenges in the completions at R4 and Hull have pushed the timing into the coming months. We have identified actions we need to take to specifically improve our capital project delivery, and we have the growth platform in place to operate at higher capacity levels as our projects come online. In terms of our outlook, revenue growth should accelerate in H2 of FY 2023 as Hull and R4 volumes ramp up. Price increases in January and June this year will also support our revenue growth outlook.
For FY 2023, we are targeting to double EBITDA compared to FY 2022. Looking further ahead, we continue to expect to achieve improved profitability and operating cash flow generation as we benefit from the greater economies of scale with higher operating levels. Finally, we remain absolutely committed to our strategic growth plans to meet the significant latent market demand for our products through increasing our capacity 5-fold by 2025. With that, Will and I will now take your questions, please. Thank you.
Thank you. Dear participants, we'll now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone and then wait for your name to be announced. The first question comes from the line of Martijn den Drijver from ABN AMRO. Please ask your question.
Yes. Good morning, gentlemen. Two questions. With regards to Tricoya Hull, you're in discussions with your consortium partners. Can you share with us your plan B if they decide not to co-fund the additional CapEx? What are the various options you're looking at? That would be question one. My second question would be, there have been significant price increases. I was wondering if you could share with us as far as you can, what the delta is now, relative to substitute products. Has that increased? Has that decreased? And whether there's any risk of demand destruction. Is it possible that customers, despite all the positive characteristics, may downtrade in a more uncertain environment? Just trying to get a grip on that element too. Thank you.
Okay. It's Rob. Martin, thank you for those two very, very good questions. This one around the Tricoya consortium. Our plans at the moment, as we said, is to get the plant up and running in the coming months. The question around the funding of the project, I really restrict my answer here that the consortium is in commercial discussion around what that means to develop a plan B. I'd like to say that our consortium partners are supportive in managing through these challenges at this difficult time. I'd rather not speculate to where that would end. I don't think that's appropriate to really answer that from a commercial perspective. In terms of the price movements we're seeing in our business and the successes we're having there and your question around substitution effects.
At this point, I'd like to answer that from two perspectives. We are taking a very diligent approach to pricing and enhancing the margins. As Will has illustrated, the unit margin per cube of Accoya has moved to a record level, passing through inflationary costs. There are two things really to consider here. We're not seeing our customers substitute with other materials. They are delighted with the performance they get from our products, the use of the product and the applications that they put them in. We are also conscious that we are stimulating demand, so we have to be very careful to how we manage pricing, not to switch prospects off to trialing material from Accsys, trialing Accoya and Tricoya. We're very conscious of that. Our customers are staying very loyal.
We've tested that through mystery shopper programs with our customers to see their reaction to what we've been doing on pricing, and they're extremely loyal, and they're extremely pleased with the performance of the product. Our balance really on pricing is how we stimulate new demand rather than switching off existing demand. Maybe I'll just pause there. Comments from you, Will.
No, that's clear. Thank you.
Thank you. The next question comes to line of Christen Hjorth from Numis. Please ask your question.
Morning, guys. I've got two questions, if that's okay. The first one, just around liquidity and how you're viewing that, in light of the further delays and incremental CapEx, although I understand, you know, you can't comment on potential funding, but just maybe you could look at it the other way in terms of where your liquidity position is and whether there's potentially any impact on repaying the convertible loan within the two years or whether that would still be a priority. The second one is just on lessons for the U.S. Accoya plant, and I do note there are differences there in terms of who's carrying it out versus how, particularly, given you already have Arnhem.
You know, what gives you the confidence that you're not gonna see similar delays in the U.S. construction and commissioning? Thank you.
If I take the liquidity point. Morning, Christian. I think first of all, to note two things on liquidity. One, we've completed the cap raise in May, as you're aware, which significantly enhanced the strength of the balance sheet. The further delays for the fourth reactor, while frustrating, are not expected to be significant in the context of that. And as Rob set out earlier, we need to conclude the discussions as to the funding of the additional costs for the Tricoya consortium. I think at this point it's worth noting, first of all, in addition to the cap raise, the existing three reactors from the Arnhem side do generate strong cash returns. As Rob explained earlier, they are operating at full capacity. We're confident that we can manage our liquidity appropriately over the next period of time.
When we take into account all those factors. I think your second element of the question was specifically about the convertible loan and how does that impact our convertible loan. I think the convertible loan was had the option to repay after two years, so it would be March 2024. I think two considerations. One, we're expecting to generate strong cash returns from existing three and the fourth reactor during that period of time. That's the first one. Secondly, there is the potential also to increase our broader credit with ABN and our banking arrangements, which may well help us to offset that. We have a couple of options there. It's still very much our intention to repay that convertible loan before that two-year maturity period.
Yeah.
Does that cover the liquidity question, Christian?
No, that's very clear. Thank you.
Thank you. I think, Christian, your second question was, you know, the lessons learned and how is it gonna be different in Eastman and what we're doing for our Accoya U.S.A joint venture. As I said, despite the actual total commitment and hard work of the Accsys teams, you know, we still need to get better at executing our project management philosophy. I've reviewed earlier in my presentation the four or five things we're doing to improve that from, you know, reviewing our group engineering and putting stronger internal project management processes in place and our contracting practices.
One of the big fundamental changes we've made on the Accoya U.S.A joint venture is that the project lead for the EPC, you know, the construction, taking it through to the commissioning of the plant, the project lead for that project is an Eastman person, which is a really great measure of the collaborative approach that Eastman are taking to this project. For us, the $130 million of project cost that's out there at the moment for us is a very large number. For Eastman, it's something they do every day. We're delighted that they're taking that hands-on approach to leading the EPC project management for us. Thank you, Christian.
Thank you very much. Thank you.
Dear participants, once again, if you wish to ask a question, please press star and one on your telephone keypad. We'll have another question come from the line of Martijn den Drijver from ABN AMRO. Please ask your question.
Yes. Thank you, gentlemen, for taking my additional question. Perhaps you could share your CapEx guidance for 2023 with us, and then more particularly the phasing between first half and second half. I imagine that a majority will be first half, but if you could share with us the phasing of that CapEx in 2023, that would be most appreciated.
Yes. Thanks a lot. I think CapEx guidance. I'll break it down into two different buckets if I may. I think the completion of the fourth reactor is expected in the region of EUR 8-9 million. That will all be in the first half of the financial year. It's possible some cash payments might flow into the second half, but all the first half. The whole project, we set out the additional costs resulting in an increase of EUR 7 million approximately. Taking that into account, the CapEx for the whole project is in the region of EUR 15 million in the financial year.
There is a range as we set out and some uncertainty as well, as we've highlighted and Rob explained, and that will primarily be in the first half of the financial year. Other CapEx outside of those key projects, which primarily relates to maintenance CapEx and other areas outside of manufacturing operations, estimated to be in the region of EUR 3 million, spread more broadly over the financial year. I think separately from that, not pure CapEx, but obviously the investment, the balance of the investment into the U.S. joint venture, is expected to be contributed from Accsys to the joint venture in the first quarter of the new financial year.
Got it. Thank you. Just to follow up, I apologize for not having read the complete press release yet. On slide 12, there's the familiar EUR 25 million revolving credit facility. That EUR 5 million for general group liquidity, have you drawn that down, or is that still available?
It was drawn down shortly earlier this year. It may well be repaid shortly following the capital raise that completed in May.
Okay. When you say earlier this year, you mean early in fiscal year 2023?
Correct.
It was undrawn at the end of FY 2022?
Correct.
Got it. Thank you. Those were my questions.
Thank you.
Thank you. The next question comes from the line of Thomas Rands from Investec. Please ask your question.
Good morning, gents. Thank you for taking my question. Just a quick one on the Accoya Color. What are your expectations for kinda volumes this year? Could you remind us what the premium is that you can charge for this product? Thanks.
Yeah, you can say the volume one's easy to answer, but the premium one.
Look, I think for volume, we're not setting that out in detail, Tom. I think what we've set out is that the capacity of the site, the fantastic site in South Wales is up to about 12,500 cubic meters before the potential to expand it. We want to ramp up to that level. We believe the demand is strong, but these are new assets and as with other plants, we're allowing a period of time to ramp up to that level. That's not a precise answer, but I hope it gives you an indication. From a pricing perspective, we are talking about sort of at least a 25% increase in price compared to normal Accoya.
From a profit per cube perspective, similar or potentially slightly higher profit per cube, but on a percentage gross margin, that's not necessarily higher and hence part of that variance to the margin that I was explaining earlier.
Great. Thank you.
Does that help?
Excuse me, Thomas, have you finished with your questions?
Yes. Thank you.
Thank you very much. Our last question comes to the line of Johan van den Hooven from Edison Group. Please ask your question.
Good morning. It's Johan van den Hooven, Edison Group. A few questions, please. You mentioned during the presentation regarding the additional cost in Arnhem of EUR 1 million that they are perhaps recoverable. How can you explain to us how that might work? What about the additional costs in Hull of EUR 47 million? Is that recoverable sometime in the future? Second question is about the planning, the 5x planning for FY 2025. If you look at PETRONAS Hull, if that starts sort of the end of the year, plus six months testing, plus two year construction, I end up in the summer of 2025. So that gives you sort of a six months leeway in sort of delays. Can you confirm if that calculation is correct?
Uh, if-
Yeah.
Shall I talk to?
Yeah.
Shall I talk to that one? Yep. Yep. First of all, shall I talk about the cost? I think.
The costs, I think, for the Arnhem site, it's something which we will be exploring in detail. Our focus at the moment is completing the rectification works. But we believe there is a reason to be able to recover some or all of those costs, but that's something which we'll be exploring in detail. I mean, your question, apologies, you slightly broke up. I think you may have been asking us, is it the same possibility for the Hull additional costs?
Correct.
If that's correct, I think in that situation, what we set out is there's a range of possible costs. I think that highlights there are aspects to the additional costs where there's not yet certainty as to what the final outturn will be. What we don't have, following the taking of the construction project, is a sort of fixed price contract mechanism which gives us a clear mechanism to recover costs. We don't have that similar sort of mechanism in place for Hull. I think we would not be able to recover costs in such a way. But there is a range of possible outcomes, as we've noted. Then I think your last question is around Hull and timing.
I don't know, Rob, whether you want to answer that.
No, I think your question was just on the ramp up. Are we still looking at the three year ramp up from when we successfully start up the plant and our plan is unchanged on that. Clearly, we will do it as quickly as we can and absolutely safely. We'd love to accelerate that, but our current plan is unchanged in terms of three-year ramp up and the current economic position where we previously stated the 40% gross margin on that project for the Tricoya product sold is still being held. We're still working on that three year ramp up plan from when we get commercial operations started up.
Okay. Thank you. Also my question was about the target of the 5x by 2025. Due to another delay in Hull, of course, you need some testing for the PETRONAS in Malaysia, I mean. six months testing, two years construction, I end up in summer 2025. That gives you only a leeway of six months sort of to get to your target, if I'm correct.
Yes. That's a great observation. It's clearly tight. Two things to say on the project. We want to take the learnings from Hull to our next project to Tricoya and make sure that we don't have the same mistakes. PETRONAS, as a partner, is very supportive of that approach. They see the value in this project, both from a sustainability perspective, but also added value to their own streams of business. They're absolutely in the wings ready to do this, and we are saying to them that we need this time. We do not want to import problems into a project. We need to smooth all this out and get the plant operational.
As a partner, they're still very actively involved and patiently frustrated waiting for us to get Hull commissioned.
All right. Thank you.
Thank you. Dear speakers, there are no further questions. This concludes today's conference call. Thank you for your participating. You may now all disconnect. Have a nice day.
Thank you very much.
Thank you. Thank you very much.
Thank you.