Energy Research Corporation Forms Joint Venture
30 July 1998
Energy Research Corporation Forms Joint Venture for Battery Production in China, and Reports Receipt of License Fee Income
DANBURY, Conn.--July 30, 1998--Energy Research Corporation (AMEX:ERC) has agreed with Xiamen Three Circles Company, Ltd., to enter into a joint venture in Xiamen to manufacture and sell ERC's advanced nickel-zinc rechargeable batteries in The People's Republic of China and Southeast Asia. Also, ERC reports the receipt of the license fee in conjunction with the joint venture. As a consequence, ERC expects to report a substantial addition to its operating earnings in the current fiscal quarter of $0.24 per share.ERC will invest $3,000,000 in the joint venture, named Xiamen Three Circles - ERC Battery Company, Ltd., and receive 51% ownership, as well as royalties based on sales. The joint venture expects to produce nickel-zinc batteries commercially before the end of 1999 from a manufacturing facility in Xiamen.
"We believe that there is great potential for our nickel-zinc battery technology in China and other parts of Asia," said Jerry Leitman, the CEO of ERC. "Electric bikes and scooters can provide a superior and environmentally benign transportation alternative for hundreds of millions of people.
"This market has been held back by the fact that the only available inexpensive battery type, lead acid, is very heavy and has limited range and cycle life. We believe that our nickel-zinc battery may be able to cause a major transformation in this market, because of its relatively low weight, long range and cycle life, which reduces the cost per mile well below that of lead-acid. Moreover, the Chinese government wants to avoid the serious air pollution caused by non-electric scooters in so many Asian cities, so we are optimistic that market demand and government policy will be favorable to the success of our venture."
"The decision we made to cooperate with ERC to manufacture nickel-zinc rechargeable batteries is an important movement for us towards the 21st century," said Mr. Shen Qi, President of Xiamen Three Circles Corp. "This movement has been strongly supported by our government. We believe the manufacture and commercialization of nickel-zinc batteries for bicycles and scooters will lead to a revolution in daily transportation in China, and the whole world will pay great attention as this is the most populous country."
Mr. Hong Yong Shi, the mayor of Xiamen added: "Xiamen makes this forward-looking decision of introducing environment-protecting nickel-zinc battery technology based on our full understanding of ERC's leading position in the field of this technology and based on our great confidence in our ability of utilizing new and high technology. As a model city in our program of national environmental protection, Xiamen pays great attention to manufacturing and utilization of new and clean technologies."
In addition to serving the market in China, Taiwan, and Southeast Asia, it is expected that the joint venture production facility will be capable in the future to supply batteries to customers in Japan, Korea, or other countries. That, however, would require an expansion of the geographical range of the license. ERC is seeking licensees and joint venture partners for similar and other applications throughout the world.
Energy Research Corporation, located in Danbury and Torrington, Connecticut, is an internationally recognized leader in the field of electrochemical technology for electric power generation and storage. ERC is developing its Direct Fuel Cells and batteries through funding from and in cooperation with government, electric utility and major international industrial organizations.
This press release contains forward-looking statements regarding the completion of the development, potential markets and commercialization of ERC's nickel-zinc rechargeable batteries in Xiamen, China, as well as potentially in Japan, Korea or other countries. The successful development and commercialization of the nickel-zinc rechargeable batteries involve significant risks and uncertainties. There can be no assurance that the development of ERC's nickel-zinc rechargeable batteries, or the manufacture and sale of nickel-zinc rechargeable batteries by ERC, will be successful in any of the targeted markets. The forward-looking statements in this press release speak only as of this date. ERC expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in ERC's expectation with regard thereto or any change in events, conditions or circumstances on which any such statement is based.