IDA Idatech

 

TIDMIDA 
 
RNS Number : 5007Z 
IdaTech PLC 
23 September 2009 
 

For Immediate Release 23 September 2009 
 
 
IdaTech plc 
 
 
(the "Company") 
 
 
 
 
Supply Agreement Update 
 
 
IdaTech plc (AIM IDA.L), a global leader in the development and manufacture of 
clean and reliable extended run backup power fuel cell products for 
telecommunication applications today announces an update on the status of the 
supply agreement between IdaTech, ACME Group ("ACME") and Ballard Power Systems 
Inc. ("Ballard") signed in October 2008 ("Supply Agreement"). 
 
 
The Company reports that the core design of the natural gas fuel cell system to 
be delivered under the Supply Agreement, which incorporates IdaTech's 
proprietary fuel reforming technology, has been completed.  Additionally, 
IdaTech has achieved a significant cost reduction in this design through 
numerous technical achievements and by establishing a highly competitive supply 
chain. However, the development timeline has taken longer than originally 
planned,as it has taken longer for certain component development and to build 
the supply chain which is more geographically spread than originally envisaged 
and now spans India, China, North America and Europe.  Accordingly the fuel cell 
system will not be available for delivery to ACME in accordance with the time 
line specified in the Supply Agreement.  This delay means that a milestone in 
the product acceptance process is likely to be missed in October of this 
year. The Supply Agreement provides for an extension of the product acceptance 
process of up to 6 months if an acceptable remediation plan is submitted by 16 
November 2009.  Furthermore, to date IdaTech has not been able to achieve the 
challenging cost targets to a level that would be profitable at the price level 
specified in the Supply Agreement. 
 
 
Under the terms of the Supply Agreement, missing this particular milestone in 
the product acceptance testing process may result in the termination of the 
Supply Agreement without penalties to any party. If the Supply Agreement is 
terminated, this would mean significantly lower sales for 2010, but the 
Directors believe it will have no material impact on the timing of cash 
breakeven for the Company. A further update and the results for the six months 
ended 30 June 2009 will be published on 30 September 2009. 
 
 
The development work on both the natural gas and direct hydrogen fuelled systems 
over the past 11 months has brought major benefits to IdaTech with regard to the 
development of a global supply chain, significant cost reduction initiatives, 
technological innovation and system performance improvements. Many of these 
benefits will be applicable in the next generation of methanol - water fuelled 
systems currently under development and due for launch in 2010. In the event 
that the Supply Agreement is replaced by a more flexible agreement it will allow 
the Company greater freedom in shifting resources to other programs such as the 
next generation methanol systems, as well as modifying the product requirements 
to meet a broader range of applications. 
 
 
The Company believes that its work carried out to date has validated that there 
is a value proposition for fuel cell systems in the fast growing Indian 
telecommunications backup market, with higher efficiency and lower maintenance 
costs than the incumbent diesel generators and battery banks. In addition, 
IdaTech launched the ElectraGenTM H2 in July; these 300 systems are currently 
being built in IdaTech's Mexican manufacturing facility and are being shipped to 
ACME over the remainder of the year. Field trial data indicate these systems are 
performing very well in difficult environments and hitting their performance 
targets. 
 
 
 
Commenting on the update, Hal Koyama, CEO said: 
"IdaTech has made tremendous technical progress over the last year, driven by 
the focus of the ACME Supply Agreement.  Working with our partner Ballard, we 
have broken through a significant number of the cost barriers once thought 
unachievable with current technology and added core pieces of new technology to 
our portfolio, simultaneously moving the bar on PEM fuel cell cost and 
performance in a very significant way. We can now see that the Indian market is 
a key area for the initial mass application of fuel cell products and we have 
one of the best partners in that market. This program has also added the natural 
gas product to our portfolio, with market applications that go beyond 
telecommunications backup power. We look forward to continue working with ACME 
to develop the Indian market for the range of IdaTech products." 
 
 
Atul Sabharwal, Chief Operating Officer of ACME commented: 
 
 
"ACME is also disappointed with this delay, but feels as strongly as ever that a 
substantial market opportunity exists for fuel cells in wireless telecom backup 
and other applications in India, where a reliable, cost-effective and 
environmentally friendly solution is greatly needed" 
For further information please contact: 
 
 
+----------------------------------------+----------------------------------+ 
| IdaTech plc                            |                  +1 541 383 3390 | 
+----------------------------------------+----------------------------------+ 
| Harol Koyama, Chief Executive Officer  |                                  | 
+----------------------------------------+----------------------------------+ 
| James Cooke, Chief Financial Officer   |                                  | 
+----------------------------------------+----------------------------------+ 
|                                        |                                  | 
+----------------------------------------+----------------------------------+ 
| Numis Securities Limited               |             +44 (0) 20 7260 1000 | 
+----------------------------------------+----------------------------------+ 
| Michael Meade                          |                                  | 
+----------------------------------------+----------------------------------+ 
|                                        |                                  | 
+----------------------------------------+----------------------------------+ 
| Buchanan Communications                |             +44 (0) 20 7466 5000 | 
+----------------------------------------+----------------------------------+ 
| Charles Ryland / Catherine Breen       |                                  | 
+----------------------------------------+----------------------------------+ 
 
 
About IdaTech 
 
 
IdaTech plc is an advanced fuel cell products company which is operationally 
headquartered in Bend, Oregon, USA and is listed on AIM with the ticker code 
IDA. 
IdaTech designs, develops, and manufactures extended run backup power fuel cell 
products for Telecom applications requiring 100 W to 15 kW of backup power. 
IdaTech's unique PEM fuel cell technology provides solutions for a wide range of 
applications to directly support efforts towards sustainable energy. 
IdaTech's portfolio of industry-certified fuel cell products are based on the 
company's fuel processing, purification and fuel cell system integration 
capabilities. With the support of strategic partners and customers, the 
company's extended run backup power products are being deployed worldwide for 
stationary applications. 
Additional information may be obtained by contacting the company direct or by 
visiting its website at http://www.idatech.com. 
 
 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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