Feb 5 2008
Hanwei Energy Services Corp. announced today that it has entered into a licensing agreement with Aerodyn Energiesysteme GmbH, a leading international wind power engineering firm, that will further enhance its wind turbine blade production capabilities by granting Hanwei the non-exclusive right to produce two versions of Aerodyn's aeroBlade 1.5 in China.
The Agreement provides Hanwei with the moulds, technical know-how, specifications, and support to produce the 37.5 meter and 40.3 meter versions of the 1.5 megawatt ("MW") blades and market them in China under the Hanwei brand.
Terms of the Agreement require Hanwei to pay a one-time license fee of EUR (euro)380,000 (C$561,506) and an annual fee of EUR (euro)50,000 (C$73,882) for the first mould, EUR (euro)30,000 (C$44,329) for the second mould, and EUR (euro)15,000 (C$22,164) for each additional mould. The Agreement automatically renews annually, and can be terminated by either party.
In the event of termination, Hanwei would retain the right to produce the blades, but would lose any access to engineering support or technology improvements to the blades.
The Agreement will enable Hanwei to upgrade its current wind blade production and product offering. Aerodyn's proven design and production techniques place their products at the forefront of the industry. The Aerodyn wind blades are used throughout the world and are considered best in class by the industry.
In support of the Agreement, Hanwei has contracted Suzhou Red Maple Wind Blade Mould Co., Ltd. ("Red Maple"), a licensed Aerodyn agent in China, to manufacture and deliver four Aerodyn 1.5 MW 37.5 meter wind blade moulds and one Aerodyn 1.5 MW 40.3 meter wind blade mould. Each mould includes all necessary equipment, including heating, hydraulic, and vacuum systems required to construct the wind blades. In addition to supplying the wind blade moulds, Red Maple will also be contracted to provide training to Hanwei's engineers for the construction of the moulds and wind blades.
Hanwei expects to begin training on the production of the Aerodyn wind blades in March 2008, with delivery of the first 37.5 meter wind blade mould expected in May, 2008. Delivery of the three additional 37.5 meter wind blade moulds is expected to be completed by June 30, 2008. Delivery of the 40.3 meter wind blade mould is expected in August, 2008.
The two contracts with Red Maple (the "Training Contract" and the "Moulds Contract") are valued at RMB 19,640,000 (C$2,805,714). The Moulds Contract (RMB 19,000,000 or C$2,714,285) requires Hanwei to pay a deposit of RMB 950,000 (C$135,714) and an initial payment of RMB 2,280,000 (C$325,714) due within three days of execution, with the remainder due in installments based on the delivery schedule and successful testing and commissioning of the moulds. The Training Contract is valued at RMB 640,000 (C$90,000) and includes RMB 340,000 (C$48,571) in raw material costs associated with wind blade production.
Hanwei is pleased to announce that it has recently hired four senior executives and engineers with expertise in, turbine design and supply chain management, wind blade production and control system design and construction. Three of new employees were recruited from wind power companies operating in China, including Suzlon Energy Ltd. and Sinovel Wind Technology Company, one of China's fastest growing alternative energy companies.
"Our goal in 2008 is to acquire the technology and expertise required to establish Hanwei as a leading provider of wind power generation equipment to China's growing wind power industry," stated Fulai Lang, President and CEO of Hanwei. "Aerodyn's wind blade manufacturing technology, moulds and training will increase our effective capacity of top quality wind blades in 2008. The addition of the new members to our wind power team will assist us with meeting the technical and supply chain challenges of increasing production to deliver on the major contract that is part of our recently announced acquisition of Daqing Deta Electric Co. Ltd."
Hanwei recently announced the proposed RMB 600 million (C$85.3 million) acquisition of Daqing Deta Electric Co. Ltd which includes a contract for 1,200 MW of wind power equipment with Daqing Ruihao Technology Co. Ltd., a major wind power developer in Heilongjiang Province in China, valued at approximately RMB 8.4 billion (C$1.2 billion). The proposed acquisition also includes licenses for turbine and blade technology, and the land and building now being used by Hanwei for its wind power manufacturing plant.