27 October 2005
27 October 2005
Resin Systems Inc has entered into a cooperation and initial purchase agreement with Jiangsu Far-East Group Co., Ltd. and Shenzhen Chamber of Commerce for Electric Power Service for its composite utility poles.
Under the agreement, Far-East and SCCEPS will purchase RS's RStandard modular composite transmission utility poles for use in China's expanding power grid.
RS will start monthly shipments of RStandard modular composite transmission utility poles in Q1 2006, once product approval is received from Chinese authorities. Approvals are expected to be completed by year-end. The shipments will be a minimum $2 million USD per month and will continue for a minimum 18 months.
During 2006, Far East, SCCEPS and RS will establish a joint venture company (""FERSTGRID"") to manufacture and distribute RStandard modular composite utility poles in China under a standard RS license agreement. RS will be responsible for providing all technology input for the complete implementation of RStandard production facilities in China, training the FERSTGRID personnel to ensure an efficient start up of production and providing all ongoing technical support as required.
The initial China plant will be based on the new Calgary, Alberta production facility and will consist of twin production cells capable of an annual production of approximately 10,000 metric tons of finished RStandard products. RS will grant FERSTGRID on an ongoing basis, additional standard licenses to meet future RStandard demand in China. RS's Alberta production facilities will produce all RStandard requirements for China until the new plant is operational.
China power grid requirements are forecasted to continue to grow at rates in excess of seven percent annually including constructing in excess of 100,000 kilometres of new transmission lines over the next five year period to meet current electrical demand requirements.