ZBB Energy Corp., a developer of renewable energy power platforms, says it has entered into agreements for the establishment of a joint venture (JV) company that will initially assemble and ultimately manufacture ZBB products for sale in the power-management industry on an exclusive basis in mainland China and on a non-exclusive basis in Hong Kong and Taiwan.
The new company will build a new manufacturing center in WuHu City, Anhui Province, that will begin operations in early 2012. The JV partners will include ZBB PowerSav Holdings Ltd., AnHui Xinlong Electrical Co. (Xinlong Electrical) and WuHu Huarui Power Transmission & Transformation Engineering Co. (WuHu Huarui).
The China JV company will have an exclusive, royalty-free license to manufacture and sell ZBB's ZESS zinc-bromide flow battery, version three (V3) battery (50 kW) and ZESS POWR PECC (up to 250 kW) in mainland China, and a non-exclusive royalty-free license to manufacture and distribute the products in Hong Kong and Taiwan in the power-management industry.
In addition, ZBB and the China JV company will enter into supply agreements under which the China JV company will purchase certain manufactured products from ZBB and ZBB may purchase certain manufactured products from the China JV company.
Key terms of the joint venture include cash and technology capital investments of approximately $13.4 million. ZBB's capital contributions to the JV will be a contribution of technology to the China JV company via a license agreement valued at approximately $4.0 million. ZBB's indirect equity interest in the China JV company will equal approximately 33%. ZBB will maintain control over the JV through its board of directors positions.
The JV will be established upon governmental approvals from China, which are expected in November.
