CALGARY, June 2 /CNW/ - Dynetek Industries Ltd. ("Dynetek") (TSX:DNK) is pleased to announce the formation of Dynetek Korea Co. Ltd. ("DNK Korea"), a Korean joint venture 51% owned by Sejung Co. Ltd ("Sejung") of Seoul, Korea and 49% owned by Dynetek. Dynetek has established this joint venture to maximize its penetration of the Korean market for lightweight compressed natural gas and hydrogen fuel storage cylinders and systems.
The joint venture will be executed in three stages.
First, DNK Korea will market Dynetek's lightweight cylinders and systems on an exclusive basis in Korea and to Hyundai Motor Group and its subsidiaries ("Hyundai") on a worldwide basis. DNK Korea will initially operate under a Sales and Marketing Agreement with Dynetek whereby Dynetek will manufacture and provide cylinders and systems as required to meet initial demand.
Second, once sales volumes of sufficient economies of scale are achieved by DNK Korea, Sejung will invest in the joint venture to develop a winding and systems assembly plant in Korea (and possibly other markets to exclusively supply Hyundai in those markets). These facilities will effectively replicate Dynetek's German subsidiary operations. Liners will continue to be sourced from Dynetek on an exclusive basis and shipped to DNK Korea for winding and final assembly.
Third, once sales volumes of further economies of scale are achieved by DNK Korea, a liner production facility within DNK Korea will be established.
Mr. Douglas Pigot, Executive Chairman of the Board of Dynetek commented, "The joint venture represents a material advancement to further penetrate this important market for lightweight cylinders and systems. We look forward to working with Sejung to develop this strategic and valuable relationship."
CNG Systems Applications for Buses in the Korean Market
In Korea, the use of natural gas vehicles and the associated infrastructure are well established. In excess of 19,000 CNG Buses are in operation today in Korea. Hyundai and Daewoo manufacture approximately 5,000 CNG buses annually with approximately 50% sold in the domestic Korean market and 50% sold to the export market.
Hydrogen System Applications for Passenger Vehicles in the Korean Market
Korean investment in alternative fuel vehicles continues to accelerate. Hyundai Motor Group and its affiliate Kia Motors announced plans in July 2009 to invest US$3.3Bn through 2013 to develop fuel-efficient cars to cut carbon emissions. The group said it would spend US$1.8Bn to develop and produce hybrid and hydrogen fuel cell vehicles. Another US$1.1Bn would be used to develop fuel-saving engines, transmissions and lightweight materials.
Dynetek's Relationship with Hyundai
Dynetek began working with Hyundai in 2004. That relationship has continued with a series of research and development contracts to develop Type III applications for both the bus and passenger vehicle segments. DNK is currently under contract to develop and manufacture a lightweight cylinder for Hyundai's next generation fuel cell vehicles. Delivery of the first cylinders under this contract is scheduled for October of this year.
Sejung (F2009 Revenue US$112MM) is a Tier 1 supplier of muffler components to Hyundai and Kia in the Korean market. Sejong Industrial Co. Ltd. ("Sejong") (F2009 Revenue US$456MM), Sejung's parent company, is a Tier 1 supplier of muffler components to Hyundai and Kia worldwide.
Dynetek designs, produces and markets one of the lightest and most advanced fuel storage systems for compressed natural gas low emission vehicles and compressed hydrogen zero-emission fuel cell vehicles. Dynetek is recognized around the world for its solutions-of-choice to the alternate fuel vehicle sector, evidenced by strategic relationships with major manufacturers around the globe.
Dynetek continues to develop new opportunities in the Asia Pacific and European markets having recently received approvals from several Asian countries to supply cylinders and fuel storage systems.
Dynetek is listed on the Toronto Stock Exchange, symbol: DNK
SOURCE Dynetek Industries Ltd.
For further information: For further information: Douglas Pigot, Executive Chairman, Dynetek Industries Ltd., 4410 46th Avenue SE, Calgary, Alberta, T2B 3N7, Tel Calgary: (403) 720-0262, Toll free: 1-888-396-3835, www.dynetek.com