Hexagon Composites ASA has signed a term sheet for a strategic cooperation and joint venture agreement with CIMC ENRIC, a leading Chinese manufacturer of energy equipment, headquartered in Shenzhen, People’s Republic of China. CIMC ENRIC is a subsidiary of China International Marine Containers (Group) Co., Ltd. (CIMC), a global leading supplier of transportation solutions headquartered in Shenzhen. The Parties will now proceed towards a final agreement.
This alliance will serve the fast-growing demand of the Chinese market for safe, lightweight and cost-efficient compressed Hydrogen storage solutions. The strategic cooperation will support the transition to zero emission transportation also in Southeast Asia. The Parties intend to jointly establish facilities for manufacturing of cylinders and assembly of systems to serve the Chinese and Southeast Asian markets.
About the market
China, the world’s largest auto market with over 28 million vehicles sold annually, has set its sights on creating a world-leading market for fuel cell electric vehicles (FCEVs) within a decade. Chinese policymakers expect the market to grow from 5,000 vehicles by the end of next year, to 50,000 by 2025, and 1 million by 2030. The initial focus is on fuel cell electric buses and commercial vehicles. This will improve public awareness and showcase the safety of hydrogen. The Alliance of Southeast Asian Countries (ASEAN) announced its collective ambition to achieve 23% renewable energy integration into its energy system by 2025, and even more by 2030.
The shift to zero emissions vehicles is driven by the desire to improve air quality and reduce CO2 emissions, as well as to increase energy independence by utilizing large amounts of hydrogen already available in China. Additionally, hydrogen provides a cost-efficient storage for surplus renewable energy from wind and solar.
“China is on its way to becoming the largest market globally for hydrogen mobility and distribution,” says Jon Erik Engeset, CEO of Hexagon. “We wanted to team up with a strong Chinese industrial partner to secure the leading role in this development. Together we can become the largest provider of hydrogen storage and distribution solutions in China and Southeast Asia.”
“CIMC ENRIC has a long history of remarkable performance and breakthroughs in alternative fuel storage and transportation. And now hydrogen will take the lead as the ultimate solution for the future needs of the mobility sector in China and on global scale. As a clean energy enterprise, our strategic alliance with Hexagon will accelerate the adoption of zero-emission transportation by fast tracking the introduction of all-composite Type 4 Hydrogen storage and transportation in China,” says Mr. Xiaohu Yang, General Manager and Executive Director of CIMC ENRIC”
The companies aim to sign the Joint Venture Agreement in the 3rd quarter 2020 after board approval and final due diligence, based on a structure that allows both parties to consolidate their contribution to the business. Production in the new venture structure is expected as early as 2021.
About Hexagon Composites
Hexagon delivers safe and innovative solutions for a cleaner energy future. Our solutions enable storage, transportation and conversion to clean energy in a wide range of mobility, industrial and consumer applications including light-, medium- and heavy-duty vehicles, ground storage, distribution, marine, rail and backup power solutions.
With extensive experience in pressure vessel development since the early 1960s, our long and proud history is rooted in innovation and change. We have a strong international presence with facilities in Norway, Germany, USA and Canada, and sales representation in some of the world’s most important clean energy markets in Europe, Asia and the Americas.
Learn more at www.hexagongroup.com and follow @HexagonASA on Twitter and LinkedIn
About CIMC ENRIC
Founded in 2004, CIMC ENRIC Holdings Limited (Stock code: 3899.HK) is one of the companies listed on the Main Board of the Hong Kong Stock Exchange. It is a subsidiary of China International Marine Containers (Group) Co., Ltd (000039.SZ). CIMC ENRIC is principally engaged in design, development, manufacturing, engineering, sales and operation of, and the provision of technical maintenance services for a wide spectrum of transportation, storage and processing equipment that is widely used for the clean energy, chemical and environmental and liquid food industries. We have built a global marketing network and have over 20 subsidiaries located in China, the Netherlands, Germany, Belgium, United Kingdom and Canada that operate production bases and internationally advanced R&D centers. CIMC ENRIC has 10000 employees and achieved an annual revenue of RMB 13.74 billion in 2019.
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.