K-TIG signs 8-year deal with the Teo family in Singapore to establish key foothold in Asia-Pacific
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Special Report: Today’s announcement marks a key milestone in the company’s strategic execution, as it capitalises on a unique opportunity in the fast-growing South-East Asian market.
High-tech precision welding company K-TIG (ASX:KTG) is making waves in the Asia-Pacific.
The precision welding company has just announced an eight-year welding-as-a-service (WaaS) licensing agreement with the Singapore-based Steel-Ti Precision Welding.
K-TIG’s precision welding technology will be used at Steel-Ti’s new purpose-built manufacturing facility that will be completed in January 2020. The facility will supply high value tanks and vessels to the oil and gas, aviation and shipping industries across SE Asian and Japanese markets. Under the terms of the deal all usage of K-TIG’s technology will be monitored for transparent reporting and billing purposes.
Markets took note of the deal, sending shares in K-TIG more than 10 per cent higher at the opening bell and the stock held its gains into midday trade.
K-TIG will also deploy its cloud-based function, which provides Steel-Ti the capability to store its welding data, roll out software upgrades and upload new weld routines that customers may require.
And in addition to its WaaS platform, K-TIG “will also provide extensive advice and support to Steel-Ti in relation to materials handling, cutting and automation equipment that will facilitate exceptional quality and high-volume output from the facility”, the company said.
K-TIG CEO David Williams said the deal was strong evidence that K-TIG’s technology was viewed as a core value-add platform by well-established businesses in the industry.
Steel-Ti was incorporated by Michael Teo from the billionaire Teo family in Singapore, which oversees a conglomerate of family-owned companies across fabrication, shipping and logistics.
“We are excited to be the first company in South-East Asia to deploy the latest generation of K-TIG’s technology, and one of the first companies in the world to adopt the Welding-as-a-Service model pioneered by K-TIG,” Teo said.
“We are strategically located in one of the world’s highest-growth regions, we have exceptional commercial networks throughout SE Asia and Japan, and plan to leverage this to grow our welding business exponentially.”
The commercial terms of the deal with Steel-Ti include an advanced payment, together with long-term licensing fees based on usage rates and minimum monthly charges.
Williams said the agreement was “illustrative of K-TIG’s strategic growth priority of a strong focus on long term recurring revenue generation and growth.”