VANCOUVER, BC and YUNFU, China, Sept. 6,
2017 /CNW/ - Ballard Power Systems (NASDAQ: BLDP; TSX: BLDP)
announced that a ceremonial opening event was held today at the
company's FCvelocity®-9SSL fuel cell stack joint venture
operation in the City of Yunfu, in China's Guangdong
Province. Ballard has a 10% interest in the joint venture –
called Guangdong Synergy Ballard Hydrogen Power Co., Ltd. ("JVCo")
– together with partner Guangdong Nation Synergy Hydrogen Power
Technology Co. Ltd. ("Synergy"). The fuel cell stacks manufactured
by JVCo are expected to be used primarily in fuel cell engines
assembled in China to provide
propulsion power for zero-emission fuel cell electric buses and
commercial vehicles in China.
Today's event was attended by the Party Secretary of
China's Guangdong Province, Mr. Hu Chunhua, Mayor of
Yunfu, Mr. Wang Sheng, and
Vice-Mayor of Foshan/Yunfu, Mr. Xu
Guo, together with other Chinese government officials.
"This landmark opening of our stack joint venture operation
represents a critical part of our localization strategy to
profitably service the unprecedented level of market interest for
Fuel Cell Electric Vehicles, or FCEVs, in Heavy Duty Motive
applications in China – the
largest market in the world," said Randy
MacEwen, Ballard's President and CEO, while attending the
opening ceremony. "Our strategy is to enable Ballard's Chinese
partners to rapidly achieve scale and significantly drive down
product costs while also satisfying local content objectives for
locally manufactured stacks and modules."
Mr. MacEwen continued, "With Ballard's brand strength,
technology leadership and field experience, we believe the Company
is uniquely positioned to address the fast-growing market for FCEVs
in Heavy Duty Motive applications in China and around the globe."
David Whyte, Ballard Vice President – Operations added, "This
impressive stack production operation already has over 90 employees
and has begun producing qualified product. Work is also underway to
achieve certification to ISO9001:2015 and IATF16949:2016 quality
standards."
The JVCo operation is currently ramping to an annualized
production capacity of 6,000 fuel cell stacks by late 2017 and is
designed to achieve an annualized production capacity of 20,000
fuel cell stacks, based on 3 shifts running 5-days per week. The
operation has implemented certain advanced automation
techniques.
The joint venture transaction, which closed in October 2016, has a contemplated minimum value to
Ballard of $170 million over 5-years,
comprised of:
- $20 million in Technology
Solutions revenue for technology transfer services, production
equipment specification and procurement services, training and
commissioning support in relation to the establishment of a
production facility for the manufacture and assembly of
FCvelocity®-9SSL fuel cell stacks, with most of this
revenue expected to be recognized in 2017; and
- Ballard's exclusive supply of membrane electrode assemblies
(MEAs), a key component of every fuel cell, for each fuel cell
stack manufactured by the joint venture, with minimum annual MEA
volume commitments on a "take or pay" value of at least
$150 million over the initial 5-year
term from 2017 to 2021.
Mr. Whyte continued, "Our business model in China is risk adjusted, capital light and IP
protected, while offering near-, mid- and long-term cash flow
streams at various points in the value chain. Our $150 million long-term MEA supply contract
provides forward visibility on baseload MEA production volumes. We
also expect Ballard to realize value at the stack level from our
participation in JVCo. Finally, at the module level, we expect to
receive technology transfer fees as well as recurring royalty
payments from modules assembled by local partners, while driving
demand for stacks from the JVCo production line."
JVCo has an exclusive right to manufacture and sell
FCvelocity®-9SSL stacks in China. Exclusivity is subject to certain
performance criteria of the joint venture, including compliance
with: a code of ethics; Ballard's quality policies and branding
practices; payment terms; and certain intellectual property
covenants; as well as achievement of the minimum annual "take or
pay" MEA volumes. Ballard will have the exclusive right to purchase
FCvelocity®-9SSL fuel cell stacks and sub-components
from JVCo for sale outside China.
Mr. Whyte concluded, "JVCo will also provide Ballard access to
additional stack production capacity to help us cost effectively
meet growing global demand while mitigating the need for future
capital spend on in-house capacity."
Ballard contributed approximately $1.0
million for its 10% interest in JVCo. It has no further
obligation to provide future funding to JVCo. Ballard's CEO serves
as one of the three members of the JVCo board of directors. Ballard
has veto rights over certain key JVCo decisions, including the
appointment of certain key management, appointment of auditors, and
JVCo's pricing and branding policies.
About Guangdong Nation Synergy Hydrogen Power Technology Co.,
Ltd.
Synergy is a high-tech enterprise and fundamental
platform for the hydrogen industry of Foshan and Yunfu, with
hydrogen fuel cell technologies and products at its core. The
company is located in the South Area of Foshan-Yunfu Industrial
Transfer Park, Silao town, Yuncheng District, Yunfu City,
Guangdong Province, China.
About Ballard Power Systems
Ballard Power Systems
(NASDAQ: BLDP; TSX: BLDP) provides clean energy products that
reduce customer costs and risks, and helps customers solve
difficult technical and business challenges in their fuel cell
programs. To learn more about Ballard, please visit
www.ballard.com.
This release contains forward-looking statements concerning
expected revenues and other benefits of the transactions, market
interest in our products, anticipated market demand for fuel cell
products and available government subsidies. These forward-looking
statements reflect Ballard's current expectations as contemplated
under section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Any
such forward-looking statements are based on Ballard's assumptions
relating to its financial forecasts and expectations regarding its
product development efforts, manufacturing capacity, and market
demand.
These statements involve risks and uncertainties that may cause
Ballard's actual results to be materially different, including
general economic and regulatory changes, detrimental reliance on
third parties, successfully achieving our business plans and
achieving and sustaining profitability. For a detailed discussion
of these and other risk factors that could affect Ballard's future
performance, please refer to Ballard's most recent Annual
Information Form. Readers should not place undue reliance on
Ballard's forward-looking statements and Ballard assumes no
obligation to update or release any revisions to these forward
looking statements, other than as required under applicable
legislation.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities. The Ballard
Common Shares have not been registered under the United States
Securities Act of 1933, as amended, or the securities laws of any
other jurisdiction and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
SOURCE Ballard Power Systems Inc.