By Liz White, UT staffMontreal, Canada-Hackerproof Ltd is negotiating to buy the polymer and coatings producer Alcar Group Inc. in a share-exchange agreement which would be a reverse merger, according to a 10 Jan statement from Montreal-based equity firm Hackerproof. The parties have signed a letter of understanding and say they expect to sign a letter of intent by the first week of February.The Alcar Group makes unspecified polymer materials. Its Alcar Advanced Materials operation makes a wide range of polyurethane coatings, according to the unit's website. Hackerproof's statement on the potential merger said the deal "represents a significant market opportunity due to a serious worldwide supply shortage of raw materials for polymers"-which it estimated as causing a shortfall of over 6 million tonnes in 2006. The firm went on to say that the market price for the materials in question varies between $1000 and $3000 per tonne. Alcar Group has a patented process and bioreactor which allow production at costs savings of up to 40 percent compared to current production methods, Hackerproof said, emphasising that "this translates to gross margins of over 50 percent."With expansion already planned, the AGI process will have a total capacity of 120 000 tonnes annually of economical and environmentally friendly materials for polymers, said Hackerproof, without specifying a timescale for the expansion. Alcar Group Inc., set up in 1993 by current chairman and ceo Alexander Cavasin, is devoted to developing what it calls "innovative-patented methods for petroleum-independent fuel and plastics resin production (for example polyurethane) that significantly improve the offerings of its customers in the automotive, building products and recreational sectors." The coatings unit is based on a 600-sq.m site at Vercheres, Québec, Alcar has three divisions, including Alcar Advanced Materials Corp., which manufactures and distributes various "proprietary non-petroleum based plastics and coating systems." The Hackerproof statement said another unit, Alcar Advanced Energy Systems Corp., will manufacture and distribute high purity non-petroleum based ethanol and diesel fuels, while the third part is Alcar R&D-an advanced materials research and development centre."