Company Achieves Major Milestone with Licensing Agreement for Three
Plants in Russia
MISSISSAUGA, ON, Jan. 21 /CNW/ - Genesis Worldwide Inc. ("Genesis" or the
"Company"), (TSX/AIM: GWI), an industry leader in "green" structural building
technologies using light steel, is pleased to announce that it has entered
into the largest licensing deal in the Company's history, significantly
enhancing the Company's presence in Europe.
Genesis recently entered into a License and Services Agreement (the
"Agreement") with Greenford Trading Limited ("Greenford"), a newly formed
British Virgin Islands subsidiary of ArianaInterProject, a Russian
international investment and development company. The Agreement calls for the
building of three light steel panel manufacturing plants in Russia over the
next two and a half years. The factories will produce light steel paneled
structures using the Genesis Solution, which includes leading-edge software,
industrial equipment, hardware, processes and engineering services.
Under the terms of the Agreement, Genesis will earn initial revenue of
US$4.0 million from licensing the Genesis technology, the sale of industrial
equipment and hardware, and various training and consulting services required
for the commissioning of the first plant. The Company will earn similar
revenue from the commissioning of each of the two additional plants, which are
projected to be commissioned by July 1, 2009 and July 1, 2010, respectively,
with the revenue recognized at such time. Genesis will also earn a minimum of
US$4.1 million in royalty fees over the next five years.
Greenford will be the exclusive provider of Genesis building systems in
the Central Federal District within the Russian Federation, and will maintain
exclusivity as long as annual minimum gross sales targets are achieved. This
Agreement is for a five-year period and will automatically renew for an
additional five years.
This transaction is the result of months of intensive discussion and
negotiation, during which Genesis developed an in-depth understanding of the
numerous opportunities in the Russian market.
Genesis President and CEO, Vince Mifsud, noted the significance of this
Agreement. "We fully recognize the market opportunities available in this
region due to the robust Russian economy and on-going construction boom. This
is a major achievement for us. It positions Genesis to lead the way in light
steel construction in the region and expands our strategic footprint in the
Latest statistics from The World Fact Book, CIA, states that Russia has
experienced average GDP growth of 6.7% for the last eight years. The Russian
Ministry of Economic Development and Trade predicted that GDP would grow 7.3%
in 2007. The U.S. Dept. of State (September 2007 issue of Bureau of European
and Eurasian Affairs) stated that construction was the fastest growing sector
of the Russian economy, expanding 14% in 2006. This growth could provide a
significant opportunity for Genesis going forward.
The target date for commissioning of the first plant is the end of
September 2008. The plant will be built in the town of Stupino, 80 kilometers
south of Moscow. The Town of Stupino recently announced that 200 hectares of
land have been assigned to ArianaInterProject to start a residential and
commercial development using Genesis technology.
Greenford Managing Partner, Victor Kuchiev, commented, "We look at our
new partnership with Genesis with excitement. It is our intention to make
Genesis the preferred construction method for residential and light commercial
buildings in suburban developments around Moscow." Mr. Kuchiev added, "We want
to create a more modern environment to replace some of the older communities
built during the Soviet era."
Genesis Vice President of Business Development, Mag Mostafa, said that
Genesis is also tremendously excited by this opportunity. "Russia is a major
steel producer and will only benefit from utilizing light steel technology,"
said Mr. Mostafa. "It is clear from our ongoing discussions that
ArianaInterProject is very open to western ideas and intends to play a leading
role in Russia with regard to new technology, thus creating the opportunity
for a strong partnership with Genesis going forward."
The 2014 Winter Olympics will be held in Sochi, Russia, which brings
further licensing opportunities for Genesis as the demand for rapid,
high-quality and environmentally sound construction grows in the region.
About Genesis Worldwide Inc.
Genesis develops and licenses structural building technology aimed at the
residential, commercial and institutional building markets. Genesis offers
licensees a turn-key solution enabling them to custom design, manufacture and
install complete light steel building structures. The Genesis Solution
encompasses engineered processes and materials that are environmentally
sustainable or "green". Genesis is headquartered in Mississauga, Ontario,
Canada and currently has eight licensees worldwide. For additional information
about the Company, visit www.genesisworldwide.com.
Certain statements contained in this press release constitute
forward-looking information within the meaning of securities laws.
Forward-looking information may relate to the Company's future outlook and
anticipated events or results and, in some cases, can be identified by
terminology such as "may", "will", "should", "expect", "plan", "anticipate",
"believe", "intend", "estimate", "predict", "potential", "continue" or other
similar expressions concerning matters that are not historical facts. These
statements are based on certain factors and assumptions including expected
growth, results of operations, performance and business prospects and
opportunities. While the Company considers these assumptions to be reasonable
based on information currently available to us, they may prove to be
incorrect. Forward-looking information is also subject to certain factors,
including risks and uncertainties that could cause actual results to differ
materially from what we currently expect. These factors include changes in
market and competition, governmental or regulatory developments and general
economic conditions. Additional information identifying risks and
uncertainties relating to the Company, its business and prospects are
contained in Genesis' prospectus filed with the Canadian securities regulatory
authorities, available at www.sedar.com.
For further information:
For further information: Genesis Worldwide Inc., Catherine Smyth,
Manager, Investor Relations, Tel: (905) 285-9909, ext. 302 or Canaccord Adams,
Robert Finlay, Erin Needra, Tel: +44 020 7050 6500