ECD Expansion Necessitates Move to New Consolidated Headquarters
ECD Expansion Necessitates Move to New Consolidated Headquarters
Increasing growth and demand on business calls for move to larger facility TROY, Mich., Aug. 20 With the widespread acceptance of the technology and products of Energy Conversion Devices, Inc. (ECD) , the company is in the process of moving to a new, larger consolidated facility located in Rochester Hills, Mich., about nine miles from the current smaller multi-building complex in Troy. Due to increased activity, ECD's Production Technology and Machine Building division is expanding its capabilities and will move into a larger facility next to the new headquarters later this year. The new headquarters will house the corporate offices and staff, the financial, accounting, legal, patent, purchasing, marketing, shareholder relations and human resources departments. A new Central Analytical Laboratory and Clean Room are also part of the facility. The move is expected to be completed in September 2001. Correspondence and phone calls should continue to be directed to the current location until further notice. Equipment installation is underway at Texaco Ovonic Hydrogen Systems LLC for the initial production of the compact Ovonic hydrogen storage containers. Accordingly, Texaco Ovonic Hydrogen Systems LLC and Texaco Ovonic Fuel Cell Company LLC, two of ECD's 50-50 joint ventures with Texaco Energy Systems, Inc. (TESI), a wholly owned subsidiary of Texaco Inc. , will complete their move to their new expanded locations in Rochester Hills in the next few months. Commenting on the moves, Stan Ovshinsky, President and CEO, said, "We are the only company that provides a complete systems approach with products necessary for the hydrogen economy -- photovoltaics and fuel cells for generation, batteries and hydride materials for hydrogen storage and infrastructure, and the production of hydrogen using photovoltaics to break up water. The enthusiastic acceptance of ECD's commercial photovoltaic, battery and hydrogen storage products has translated into increased business in all of our energy area. Our technology provides needed solutions for the transportation and energy sectors. Similarly, in the information technology area, we are providing solutions to the optical and semiconductor sectors where new products are an absolute necessity. The move to our new headquarters and the large-scale expansion of our production facilities allows us to respond to these critical needs and to offer additional support to our joint ventures and manufacturing units." He further noted that the increased growth at ECD has resulted in the hiring of new people throughout its operations. Recent examples of increased business activity include: * Ovonic NiMH batteries are the batteries of choice for hybrid electric vehicles of all sizes, passenger cars, light-duty trucks, buses and heavy-duty trucks. The July 18 announcement by Texaco Ovonic Battery Systems LLC, a 50- 50 joint venture between TESI and Ovonic Battery Company, Inc., ECD's battery subsidiary, of its $150 million commercial expansion program will help meet the requirements of potential customers now testing or evaluating production- intent NiMH battery pack systems for their vehicles. Examples of recent vehicles with NiMH battery packs include: -- 44-passenger transit hybrid bus -- European manufactured 5-passenger hybrid van -- U.S. mid-size hybrid SUV -- U.S. full-size hybrid pick-up Ovonic Battery's new plastic case mono-block is especially suited to these vehicle applications because of its compact liquid-cooled design available in various power and energy ratings to meet a wide range of manufacturers' specifications. With the number of inquiries being received, we expect the joint venture expansion to be fully utilized; additional future expansion plans are already underway. Texaco Ovonic Battery is busy implementing the expansion of its Ovonic NiMH manufacturing capability to meet the needs of its customers. Since its formation, Texaco Ovonic Battery Systems has been receiving numerous customer requests for quotations. * We are in the process of setting up the initial production line for the Ovonic hydrogen storage system containers. Production is expected to start this fall at Texaco Ovonic Hydrogen Systems, with commercial market entry shortly thereafter. * The ECD unique Ovonic Regenerative Fuel Cell(TM) technology is advancing rapidly. There is a need for a realistic, robust, high-efficiency fuel cell for transportation applications. Work at Texaco Ovonic Fuel Cell Company is proceeding well. * On-going manufacture and installation of the 25MW photovoltaic machine in the new United Solar Systems Corp. Auburn Hills, Mich., facility. When completed in early 2002, it will be the world's largest amorphous silicon photovoltaic production machine. The 25MW machine has been designed and is being built by ECD's Production Technology and Machine Building Division under a $50 million contract from Bekaert ECD Solar Systems LLC, a joint venture between United Solar and N.V. Bekaert S.A. United Solar's current 5MW capacity is not sufficient to meet customer orders in a timely manner. Our photovoltaic roofing products have generated a great deal of interest because of their unique advantages and ease of installation. United Solar continues to receive new orders. The recently announced order from Texaco to design and install a photovoltaic system to supplement Texaco's electric power requirements in its Central Valley oil field operations in California could amount to a total of 1MW, the largest thin-film photovoltaic installation to date. The petroleum industry has a growing need for photovoltaic systems which is reflected by the installation of our Ovonic photovoltaic systems on the canopies of Texaco filling stations. * The joint development program between Ovonyx, Inc. and Intel Corporation in connection with the Ovonic Unified Memory technology (OUM) is progressing very well. In an interview with CNET News.com, Stefan Lai, VP, Intel Technology and Manufacturing Group, said, " ... OUM is likely the most promising for its combination of low cost and ease of integration with other memory technologies." According to Lai, OUM could offer price and read/write performance to take over the majority of storage duties for devices such as handhelds. In an article published in Forbes magazine (April 30, 2001), Lai said, " ... we're banking on ovonics." * The management committee of Ovonic Media, a joint venture between ECD and GE Plastics, a division of General Electric, is pleased with the progress to date and the next phase in expansion of the joint venture is being planned. * The programs with Rare-Earth High Tech in Inner Mongolia, China are advancing as planned. As a result, we expect to recognize another $2.5 million of license fees in the 4th quarter of fiscal year 2001. Robert C. Stempel, Chairman, discussing the move, said, "This move to a new consolidated headquarters facility underscores the fact that ECD's proprietary technology-based commercial products continue to gain acceptance and be demanded by the marketplace. Products based on ECD's technologies in photovoltaics, energy storage, energy generation and information technology are being used worldwide. This facility provides the room we need to accommodate our present as well as expected future growth." He further added that with the improvement in our operations and the proceeds from the recent warrant exercises, ECD continues to have a strong balance sheet with cash and cash equivalents in excess of $100 million. In further discussing the new headquarters, Stempel and Ovshinsky noted the new Central Analytical Laboratory and a 10,000/1,000 Clean Room equipped with the latest in electronic test equipment. Part of the new clean room and its equipment is expected to be contracted by Ovonyx, Inc., a joint venture among ECD, Tyler Lowrey, Intel Corporation and other investors to commercialize ECD's OUM technology. ECD will utilize the clean room for next generation product development work. The Central Analytical Laboratory provides services to all of ECD and its joint ventures. The new headquarters is an approximately 50,000 square foot single story high bay leased building in Rochester Hills at 2956 Waterview in a modern industrial park development. Approximately half of the building is office, meeting and demonstration room space with the balance devoted to the Central Analytical Laboratory, Clean Room and workspace. About 80 people will occupy the building when the move is completed. ECD is the leader in the synthesis of new materials and the development of advanced production technology and innovative products. It has pioneered and developed enabling technologies leading to new products and production processes based on amorphous, disordered and related materials, with an emphasis on advanced information technologies and alternative energy, including photovoltaics, fuel cells, hydride batteries and hydride storage materials capable of storing hydrogen in the solid state for use as a feed stock for fuel cells or internal combustion engines or as an enhancement or replacement for any type of hydrocarbon fuel. ECD designs and builds manufacturing machinery that incorporates its proprietary production processes, maintains ongoing research and development programs to continually improve its products and develops new applications for its technologies. ECD holds the basic patents in its fields. ECD's web site address is http://www.ovonic.com . This release may contain forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on assumptions which Texaco and ECD, as of the date of this release, believe to be reasonable and appropriate. Texaco and ECD caution, however, that the actual facts and conditions that may exist in the future could vary materially from the assumed facts and conditions upon which such forward-looking statements are based.
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