Iq Power AG (fka IQPOF)

[Aduke]

23.11.2011

News from the Licensee iQ Power Asia in Gwangju, South Korea


iQ Power Asia sending first battery deliveries by ship to iQ Power AG in Europe and to a major North American customer
Production systems expansion at South Korean plant in Gwangju
iQ Power Asia and Daewoo International sign preliminary agreement for securing the supply of raw materials
KG Power and the Korean consortium agree to increase their involvement in iQ Power AG by at least EUR 1.7 million


iQ Power AG has received the following information from iQ Power Asia Inc.:

iQ Power Asia Inc. in Seoul, South Korea reports that some 12,000 JIS (Japanese Industrial Standard) batteries containing iQ Power technology will be sent by ship this month to iQ Power AG in Europe. This shipment represents the start of regular deliveries from Korea to Europe. JIS batteries have a market share of about 12% in Europe, a figure that is trending upwards. The selling of Asian battery sizes is expected to increase the sales volume primarily in countries such as the United Kingdom and Ireland, as well as in Eastern Europe, where Japanese and Korean vehicle models are extremely popular.

Furthermore, and also this month, the first 48,000 battery units were sent by ship to a major customer in North America which serves battery distributors in Canada and the United States. This North American customer has already indicated that it will be placing additional orders for more than 200,000 battery units in December 2011. The tools for manufacturing American battery models will most likely be transferred to the plant in Gwangju, a move that would increase the order volume to more than one million battery units.

A capital increase in the amount of $19 million, which was subscribed predominantly by major Korean investors, was successfully completed in May 2011 with an eye towards the investments required for expanding the manufacturing systems at the plant in Gwangju, South Korea (see Corporate News dated 26 May 2011). iQ Power Asia is also set to receive a future loan of $9 million from major Korean financial institutions. iQ Power Asia plans to expand its plant by the addition of two more battery production lines. One production line will be used for commercial vehicle battery sizes, another for automobile battery sizes, along with one line for the manufacturing of lead plates. The expansion is scheduled to be completed by the end of Q2 2012. This ultra-modern manufacturing facility will then enjoy a production capacity of 5.1 million battery units and lead plates.

In light of the tremendous amount of raw materials needed to support such large-scale production, iQ Power Asia and Daewoo International have come to a preliminary agreement on securing the supply of commodities and raw materials. The needed inventories of raw materials valued at more than $25 million will be stored at an area adjacent to the plant and administered by Daewoo. This action not only creates an effective manufacturing environment, but also optimizes space utilization and reduces costs at the same time.

In addition, the Korean consortium affiliated with KG Power has reaffirmed the trust and confidence it has in its relationship with iQ Power AG and has agreed to increase its involvement in iQ Power AG by at least EUR 1.7 million in connection with the current convertible bond issue.

The CEO


http://www.iqpower.com/index.php?pid=1,1&id_news=983