China TMK Battery Systems Signs Distribution Agreement with US based Alexis Power Supply

July 07, 2010 by Jeff Shepard

China TMK Battery Systems Inc., a China-based manufacturer and distributor of customized rechargeable battery solutions to global consumer product companies, announced that it has signed a 5-year, exclusive distribution agreement with Nevada-based Alexis Power Supply, Inc. ("Alexis Power") and has commenced commercial production of proprietary, rechargeable Nickel Metal Hydride (Ni-MH) battery packs to be used as back-up power supply sources for multiple industrial applications. Alexis Power will market and distribute the batteries in the US and other targeted international markets. Shipment of the initial order under the agreement is expected to commence by October 2010.

TMK and Alexis Power will focus initially on the telecommunications market, by introducing large-frame NiMH-based back-up power solutions to replace existing lead-acid battery products, in addition to targeting new installations at both remote and central telecommunications facilities. Alexis Power, which was founded by industry veterans, maintains existing relationships with AT&T, Verizon, Frontier and other major telecommunication-focused distributors in the US and abroad. The management team has worked with TMK during the past two years to design and develop products focused on meeting specific customer applications. Alexis will leverage its distribution warehouse and service facility in Reno to sell TMK products directly and through a network of established dealers and distributors. TMK and Alexis Power are also collaborating to introduce new back-up power solutions to the solar, railroad and traffic control industries, where Alexis maintains existing relationships, in addition to performing market analysis on other synergistic verticals.

"We believe that this agreement with Alexis Power Supply marks a key inflection point in our business and is a critical step in our strategy to become a leader in the market for innovative new back-up supply solutions," stated Henian Wu, Chairman and President of TMK. "While we continue to witness increased demand for our environmentally friendly rechargeable batteries used in consumer products, this agreement represents our move to aggressively capitalize on large growth opportunities in the $5 billion global Ni-MH market. We expect that our new offerings, such as our intelligent, back-up battery solutions, which address new market verticals such as the telecommunication infrastructure grid, will meet a significant market need."

Alexis Power plans to price TMK’s proprietary Ni-MH batteries at approximately 20% higher than lead-acid batteries and offer an eight-year warranty on them, based on the known benefits of Ni-MH batteries and additional benefits offered by TMK. Ni-MH batteries provide a superior return on investment, due to less maintenance costs and a significantly longer lifespan, for the Ni-MH end-user. Current industrial lead-acid batteries used for back-up storage are environmentally hazardous, have a relatively short life span ranging from 1.5 to 3.5 years, have high failure rates, especially in extreme temperature climates, and are a challenge to test and maintain. The need for alternative power solutions is significant due to the limitations of traditional power sources, ongoing cost to maintain and replace, and the mounting government pressure globally to address the issue of toxic waste disposal. Ni-MH batteries are non-toxic and have a life span of up to 10 years, making them an ideal replacement solution for a variety of mission critical applications. Furthermore, TMK’s proprietary remote monitoring system will provide users with real-time access to power levels, thus improving the quality of maintenance and decreasing on-going service costs. The batteries will also be equipped with emergency shut-down during critical periods, which will protect the cells and increase life-span.

"We are pleased to have the opportunity to team up with China TMK Battery Systems, Inc. to deliver a superior, rechargeable Nickel Metal Hydride battery pack that we expect will establish the benchmark of back-up power solutions for multiple industries," commented Rex Dawson, Chief Executive Officer of Alexis Power Supply, Inc. "We believe that Ni-MH battery packs for the telecommunications industry, solar, railroad and now traffic control industries will help lead the revolution toward mass deployment of environmentally-friendly and longer lasting power solutions in the United States and other international markets."

As a result of the agreement, TMK plans to increase its maximum production capacity from 200,000 battery cells per day to 300,000 battery cells per day, with the addition of two Ni-MH production lines with operations starting in July 2010. Upon commencement of the two additional Ni-MH production lines, the company expects to reduce the utilization rate of the current production lines from 90% to 75% in order to increase efficiency in its aggregate production.