FuelCell Energy and Marubeni Extend Distribution Agreement
FuelCell Energy, Inc. has extended the distribution agreement with its Asian partner, Marubeni Corp. (TSE: 8002), to sell the company's Direct FuelCell® (DFC) products in Japan. Terms of the revised agreement include a commitment by Marubeni to order 6MW of DFC power plants and a cash down payment related to the commitment. In exchange, FuelCell Energy agreed to extend Marubeni's exclusivity to sell DFC products in Japan.
"With the number of DFC power plants in Japan and Korea increasing, commercial and industrial customers in Asia are recognizing that Direct FuelCell power plants can provide firm, reliable power generation while reducing energy costs and greenhouse gases," said Kenji Natori General Manager of Marubeni's New Technology & Renewable Energy Department. "With the highest electrical efficiency of any power generation technology in their size range, DFC power plants provide customers with greater control of their energy usage while reducing harmful emissions."
Today's announcement supports FuelCell Energy's long-standing strategy for addressing the growing market opportunities of selling DFC power plants in Japan. Initially, FuelCell Energy will add several local personnel for sales and servicing, supporting Marubeni's recently increased sales staff of its Fuel Cell Japan subsidiary formed last year. In addition, the two companies will continue their efforts towards the formation of a joint venture for the packaging of DFC power plants in Japan. Moving more of the assembly of DFC power plants to Japan and incorporating balance of plant components from local vendors is expected to reduce product cost to be more competitive.
"Marubeni's commitment clearly demonstrates that the market drivers for our high efficiency and ultra-clean DFC products in the Asian market are strengthening," said R. Daniel Brdar, President and CEO of FuelCell Energy, Inc. "Commercial and industrial companies in Asia are demanding high efficiency and reliable onsite power generation such as our ultra-clean power plants to help them reduce their power costs while complying with the mandates of the Kyoto Protocol."
Marubeni's cash down payment for the 6MW commitment reserves inventory and placement in FuelCell Energy's recently expanded manufacturing schedule. DFC power plants will be released for production and included in commercial product backlog when sales to specific customers are finalized.