Valence Embarks Upon Manufacturing Expansion For Lithium Phosphate Battery Packs
Valence Technology, Inc. announced that it plans to increase the company’s manufacturing capacity to meet anticipated demand for its Lithium Phosphate energy storage systems. By March 31, 2009, Valence plans to have in place an expanded manufacturing capacity of $35 million to $50 million per quarter to support anticipated product sales. As the company’s manufacturing capacity expands, Valence believes it can achieve gross margins of approximately 30% of revenue with operating profit from 17% to 20% of revenue.
Valence recently announced it had secured an agreement with Tanfield Group Plc that will result in the purchase of up to $70 million of product during the first phase of the contract to power zero emission, all-electric commercial delivery vehicles. The Valence battery systems are being installed in leading-edge vans and trucks produced by Tanfield’s UK-based trading division, Smith Electric Vehicles, described as the world’s largest manufacturer of electric vans and trucks.
"Increasing our capacity to manufacture additional battery systems will assure we have the capability to fulfill the anticipated demand we believe to be building in our sales pipeline," said Robert L. Kanode, CEO and President of Valence Technology. "And, with operational full service fulfillment centers in Europe, North America and China we are ready to provide the service and support our customers need."