Ballard signs $168 mn deal to produce fuel cell stacks in China

By Editor


Ballard Power Systems has signed a deal worth $168 million with Guangdong Nation Synergy Hydrogen Power Technology to establish an FCvelocity-9SSL fuel cell stack production operation in the City of Yunfu, in Guangdong Province.

The fuel cell stacks will be packaged into locally-assembled fuel cell engines and integrated into zero-emission buses and commercial vehicles in China.

Upon closing of the transaction, expected in late-2016, a joint venture will be created to undertake the stack manufacturing operations and will be owned 90 percent by Synergy and 10 percent by Ballard.

Under the terms of the five-year agreement, Ballard will receive $18.4 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 line in Yunfu for the manufacture and assembly of FCvelocity-9SSL fuel cell stacks.

Most of the revenue from this deal is expected to be recognized in 2017;

On commissioning of the operation, expected in 2017, Ballard will be the exclusive supplier of membrane electrode assemblies (MEAs) for each fuel cell stack manufactured by the joint venture, with minimum annual MEA volume commitments on a “take or pay” basis totaling in excess of $150 million over the initial 5-year term from 2017 to 2021.

The transaction represents significant progress for Ballard’s China strategy over the past 18-months, accelerated by an historic meeting and key talks at Ballard’s headquarters in Vancouver on May 9th this year with the visit of Mr. Hu Chunhua, Party Secretary of Guangdong Province, the company said in a statement.

“There is unprecedented market interest for fuel cell buses and commercial vehicles in China – the largest market in the world,” said Randy MacEwen, Ballard’s President and CEO. “With our leading brand, technology and field experience, Ballard is uniquely positioned to address the market for fuel cell buses and commercial vehicles with our partners in China.”

Under the terms of the joint venture, Ballard will contribute RMB 20 million (approximately $3.0 million) for its 10% joint venture interest, appoint one of the three joint venture board directors, have veto rights over certain key joint venture decisions, agree on the marketing strategy and will have no further obligation to provide future funding to the joint venture.

After commissioning of the operation, the joint venture will have an exclusive right to manufacture and sell FCvelocity-9SSL stacks in China. Ballard will have the exclusive right to purchase fuel cell stacks and sub-components from the joint venture for sale outside China.

Rajani Baburajan

[email protected]


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