Sprintex targets next phase of growth with $6.3m supply deal into the Chinese market
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Sprintex is further expanding its foothold in the green, no emission space after winning a key industrial air compressor supply agreement in China for use in the water treatment industry.
Sprintex Limited (ASX: SIX) has entered into a 3-year supply agreement with Nanjing RGE, a leading manufacturer of wastewater treatment equipment and systems in China.
RGE is a specialist water treatment membrane bioreactor and water treatment system company, with product sales and services covering all provinces in China.
Under the terms of the deal, Sprintex will customise and develop a series of stand-alone, high-speed centrifugal air compressors for use in the water treatment industry.
RGE and Sprintex will collaborate on the design of dedicated water treatment systems, ranging from 10-60kW.
Sprintex designs and manufactures compressors and superchargers for use in a wide variety of combustion engines, industrial and hydrogen fuel cell applications.
The company has predominantly been focusing on leading the way in the green economy by reducing automotive carbon emissions whilst boosting engine performance.
However, the RGE deal is major step forward in Sprintex’s expansion into electric compressor market.
Sprintex will supply a minimum of 400 units of mixed models over a two-year initial term, 100 of which must be purchased in the first year and 300 in the second year.
The minimum contract value is worth RMB30m (~AU$6.3 million) over the first two years of the initial three-year term.
First deliveries are expected to be completed in Q1 2022 with quarterly minimums applicable.
Sprintex Managing Director Jay Upton said the company was excited to cement its first industrial air customer and was pursuing further opportunities in the sector.
“Whilst the clean energy market is providing many opportunities for the future, the agreement with RGE is a major step forward in the company’s expansion into the electric compressor market, Upton said.
He added that the deal gives Sprintex an entry and a secure foothold into more mature industrial markets “that are hungry for the efficiency improvements that we can offer”.
“Every efficiency improvement in an industrial process is a benefit that goes straight to the bottom line, so we are expecting to see more demand from the industrial sector as more companies become aware of our enhanced efficiency proposition for clean air compressor applications,” Upton said.
RGE Executive Director Baochang Zhou said a high-speed electric centrifugal compressor was the ideal solution for water aeration applications.
“Replacing the traditional roots type compressors with Sprintex compressors in a medium size 320kw water treatment site will save about 500,000kW of electricity annually for our customers, cut 375 tonnes of CO2 emissions and save about RMB500,000 (AU$104,000) in costs in the process,” he said.
We also note that the Sprintex compressor system features water-cooling and smart control, which makes it over 20% more efficient and reliable than the compressors we have been using.”
With its new electric compressor business in China, Sprintex has been expanding into hydrogen fuel cells in electric vehicles and fuel cell power generators.
Under the deal, Sprintex will use its expertise in turbomachinery and air bearing to fast-track development of a range of eCompressors, based on Aeristech’s advanced electric motor and controller technology.
It will then manufacture and supply these eCompressor products to Aeristech under a sales agreement.
In June, the company also announced the opening of its 1,500 sq metre manufacturing facility in China.
This article was developed in collaboration with Sprintex, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.