Important milestone for Absolicon: Selling production line to Egypt
Absolicon takes an important step on the road to global presence through the sale of a production line to partner Creative Power Solutions in Egypt worth 3.7 million euros. The production line enables local production of Absolicon's patented solar collectors, which creates added value such as shorter transports, lower prices and locally adapted solutions. This creates competitive conditions for Absolicon's solar technology as Creative Power Solutions already has a project that includes 14,000 m solar collectors ready that will be produced in the newly established line in Egypt.
Absolicon has 2022-12-14 published a press release on the sale of a production line to CPS in Egypt. The following is an English translation of that press release.
In January 2022, Creative Power Solutions (CPS) signed a framework agreement with Absolicon to be the exclusive partner in Egypt and for the establishment of a production line for the Absolicon T160 solar collector in Egypt. At the end of the year, CPS received financing equivalent to EUR 2.7 million from KfW Development Bank through The Facility Investing for Employment (IFE). Now, in December 2022, CPS proceeded with the purchase of a production line from Absolicon. The value of the sale is EUR 3.7 million for Absolicon and the company plans to be able to deliver the production line to Egypt in 2023. In turn, CPS plans to start production in 2024 and already has a project equivalent to 14,000 m planned.
- The sale of a production line to Egypt is an important milestone for Absolicon and it is gratifying to be able to show the result of goal-oriented and hard work! The world needs renewable, cheap and efficient energy production that can cover the growing demand. Absolicon together with partners such as CPS can play an important role in meeting the needs of the industry for sustainable solutions to the energy challenge, says Joakim Byström, CEO of Absolicon.
- We are thrilled to set up the first manufacturing facility for solar thermal collectors in Egypt. With a total investment cost of EUR 5.4 million, the local production of the manufacturing facility will enable knowledge transfer, while boosting renewable energy deployment and creating jobs across various industry sectors. Through our innovative solar thermal technology, we are committed to contributing to the global endeavours towards mitigating climate change and supporting Egypt's Sustainable Energy Strategy 2035, Says Dr. Majed Toqan, Chief Executive Officer of Creative Power Solutions AG.
Solar heating market
Half of the world's energy use is heat, and industries consume huge amounts of fossil fuels to heat their processes. The market for large-scale solar heat is estimated by the International Renewable Energy Agency IRENA at 800 billion euro in investments in industry by 2050.
Absolicon has a unique technology, based on 20 years of research, to extract energy from the sun with concentrating solar collectors. The investment in Absolicon solar heating becomes competitive through local production, limiting transport costs and enabling an adaptation of material choices to the conditions and supply in the local market. The price is also optimized by the solar collectors' design, which allows mass production in Absolicon semi-automated production line with the capacity to produce one finished solar collector every 6 minutes. The Absolicon production line also helps in creating local quality jobs in a growing field.
Egypt hosted COP27, the United Nations climate conference in Sharm el-Sheikh, in November, which brought together leaders from around the world to discuss solutions to climate change and global warming. The country has many places with high solar radiation, mainly concentrated around coastal areas, which makes Egypt advantageous for the implementation of solar energy technology.
CPS is a Switzerland-based energy company that develops technologies for power plants. One of CPS' clients has signed a long-term agreement to increase the efficiency of a 600 MWe thermal power plant. The team identified that Absolicon's technology can bring major improvements in fuel efficiency.
The newly established production line will as an initial project produce solar collectors for a 14,000 m equivalent to 7 MW thermal installation at the power plant.
As a next step, similar opportunities are predicted throughout the electric power industry. In Egypt, the total electricity capacity of power plants is 53,000 MWe.
In addition to working on energy efficiency in power plants, the companies will also work towards key industrial segments in Egypt. For a production line producing the Absolicon T160 solar collector corresponds to 10% of the total estimated solar thermal market for the industry, the potential market amounts to 4.5 million sqm, equivalent to 800,000 solar collectors, which reduces carbon dioxide emissions in the industrial sector in Egypt as the use of fossil fuels is replaced as an energy source.The largest segments of Absolicon's solar collectors in the region are:
- Textile industry
- Chemical industry
Revenue from sales
Absolicon's revenue from sales can be divided into three groups: acquisition of the line, license revenue and revenue from material sales.
1. Sales of the production line
The production line is of the same model as Absolicon has in Sweden and which the company has already delivered to Sichuan province. The line is equipped with two six-axis robots from ABB and has a capacity to produce 50 MW (18,000 solar collectors) per year. Together with the hardware, Absolicon offers consultation support for marketing and technical support, development and technical training. The value of the sale to CPS amounts to EUR 3.7 million.
2. License to manufacture T160
For the right to manufacture T160 under Absolicon's intellectual property protection, take part in future product development and use Absolicon's trademark, an annual license fee at full production of approximately EUR 4-500,000 sales value.
3. Material supply
Through the agreement, Absolicon ensures access to patented components and high-quality inputs partly manufactured in Egypt or locally at the installation site.
At full production, the production line needs to buy materials for EUR 3-6 million per year through Absolicon. The outcome for Absolicon depends to some extent on the result of Absolicon's ongoing material investment.
CPS's purchase is conditioned by them being able to fully finance the production line. The payment of EUR 3.7 million to Absolicon will start within three months of signing the contract according to an agreed upon schedule.
The production line is expected to be delivered in 2023 and production of solar collectors in Egypt is planned for early 2024.
Absolicon Solar Collector AB (publ) was founded in 2005 as a research and development company in solar technology. Today, Absolicon is a listed company with more than ten years of operational experience from all parts of the world. Absolicon specializes in providing tools for the transition from fossil fuels, providing a profitable, easy-to-install and emission-free energy solution using solar thermalinstallations as well as complete robot production lines for the solar collectors. www.absolicon.com
Creative Power Solutions is a Switzerland-based energy company that develops technologies for power plants.
This disclosure contains information that Absolicon is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 14-12-2022 15:44 CET.