Market potential
Uruguay is one of the leading countries in Latin America, with financial stability and commitment to the environment. Moreover, Uruguay has a divers industrial sector, emitting 204 ktons of CO2 every year*. The use of Absolicon T160 Solar collectors to reduce the use of conventional fuels will decrease the carbon impact and fossil fuel dependance of those industries and the country. Replacing only 10% of industrial heat demand, the potential of the T160 Solar collector is estimated up to 590 million sqm (300 MW).
The collaboration is built on the qualified experience of h2t consultores in the Uruguay and Argentina market.
The largest segments of Absolicon’s solar collector technology in the region are:
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Pulp and Paper
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Chemical
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Textile
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Food and Beverage
The framework agreement sets out overarching principles
The framework agreement prescribes the general principles for the separate agreements to be drawn up, and the steps to be taken before a binding agreement for the acquisition of the production line can be signed. The estimated value of sales is subject to change as well as the definitive design of the production capacity of the production line. Absolicon estimates today that the sales value of the agreement is at the lower end of the range of € 4-5 million.
If h2t consultores fails to meet its commitments at every stage, they lose the right to complete the acquisition and then have the opportunity to recover part of the purchase price, but never for Absolicon’s incurred costs.
1. Sale 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 with two six-axis robots has the capacity to produce 50 MW solar collectors (100,000 m2) per year. Together with the hardware, Absolicon provides consulting support for marketing and technical support, development and technical training.
The total value of hardware and activities covered by the agreement is estimated at € 4-5 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, a monthly license fee of approximately 4% applies to the sales value.
The production line in full production produces on a shift 50 MW solar collector (100 000 m2) per year with sales value € 20-25 million which with 4% license fee would mean about € 800 000 per year in license revenue. Absolicon’s estimate, however, is that it takes time for h2t consultores to develop the solar thermal market for industries in the region so that these volumes can be achieved.
3. Material supply
Through the agreement, Absolicon ensures access to patented components and high-quality inputs partly manufactured in Uruguay or locally at the installation site.
At full production, the production line needs to buy materials for € 10-15 million per year where 20% – 30% of purchases may go through Absolicon and 70% – 80% from local subcontractors. The outcome for Absolicon depends to some extent on the result of Absolicon’s ongoing material investment.
Next steps
In this case, negotiations for the signing of the framework agreement have been fast and cooperation is still at an early stage. Discussions have just begun on the first pilot installations of the T160 in Uruguay. More detailed contract writing is now taking place. Payment is made step by step in the same way as in the previous sale of the production line to the province of Sichuan.
*source: iea.org
New framework agreements with partners in different countries have previously been published as inside information in accordance with the regulations in the EU Market Abuse Regulation. After more than ten signed framework agreements, we can state that the establishment of framework agreements is now part of the day-to-day operations and is no longer counted as inside information.
