Dynetek Industries Ltd. (Dynetek), a Canadian based manufacturer of alternative fuel storage and fuel systems, has executed a shareholders agreement with S.V. Greentech Private Limited (“S.V. Greentech”), an affiliate of S.V. Energy Partnership (“S.V. Energy”), to form Dynetek Cylinders India Pvt. Ltd. (DNK India), an Indian joint venture 49% owned by Dynetek and 51% owned by S.V. Greentech. The agreement fulfills a Letter of Intent executed in September 2010 to bring about the formation of the new company, aimed at garnering a share of the Indian lightweight compressed natural gas (CNG) cylinder market.
In exchange for its 51% interest, S.V. Greentech will invest the capital necessary for DNK India to establish a winding and systems assembly facility near Mumbai, India and fund the initial working capital requirements of DNK India. The facility is expected to be operational by the end of the second quarter of 2012 and will replicate the operations of Dynetek’s German subsidiary. Liners will continue to be sourced from Dynetek on an exclusive basis and shipped to DNK India for cylinder winding and final system manufacture and assembly. Pending establishment of the DNK India facility, Dynetek will manufacture and provide cylinders and systems to DNK India to meet initial demand. Once sufficient sales volumes have been achieved by DNK India, a liner production facility may be established in India.
Mr. Douglas Pigot, Executive Chairman of the Board of Directors of Dynetek commented, “We are excited about the opportunity to capitalize on our first-mover advantage in India. Dynetek remains the only Type III manufacturer with systems certified for sale in India. Prototype systems have been provided to several leading municipal bus operators with very encouraging results that highlight the performance and long-term life cycle economic advantages of our Type III product over the currently used Type I alternatives.”
Mr. Amit Shah, Director of S.V. Greentech commented, “We see a great future for Dynetek’s products in India where demand for CNG fueling and bulk transportation systems continues to grow at an accelerating rate.”
A recent article in India’s Business Standard reported more and more consumers are shifting to CNG, where the fuel offers 65% savings at current prices. The article states, “CNG consumption is growing at 15%”.
This item compiled using information supplied by Dynetek Industries.