Lucia Darcy's take on the recent partnership and its key product - a zero carbon-emitting hydrogen fuel cell compressor.
As an investor novice and an individual with anxieties about Earth's tussle with unrenewable energy, Sprintex Limited's journey into the realm of zero-emission engines was undoubtedly alluring.
I was excited to learn more about a compact and light device that ran on air and water - it sounded too miraculous to be true (clearly, I am not an engineer either). However, after some research, it became apparent hydrogen fuel cell technology has been around for some time. The only thing missing was the cost efficiency, and perhaps more importantly, the global drive for a cleaner atmosphere and greener conscience.
But not anymore.
Via Sprintex's collaboration with Aeristech Limited, I've learned the market for clean energy has burst wide open and is only going to get bigger. Those as interested as I am should read on for a broader understanding of the significance of the partnership.
We will cover the following key points in this Samso Insights:
Collaboration with Aeristech, global experts in electric motor and control technology, strengthens Sprintex's goal to manufacture and supply e-compressors for zero-emission electrical engines (hydrogen fuel cells).
Agreement furthers the global desire for industrialisation of top tier electrical engineering, expanding the clean air market and making it more accessible.
Production is already underway in China with production samples to be expected this month (October 2021).
Solid opportunity for future revenue for both parties as the consumer world becomes more environmentally conscious, with retail expected within the year.
A Match Made in the Board Room
The era of electric vehicles is speeding towards the present with the recent partnership of Australian automotive manufacturer Sprintex Limited (ASX: SIX) and Aeristech Limited. Aeristech, being a global leader in electrical technology, has entered into an agreement with Sprintex to manufacture three types of high speed electric compressors for the hydrogen fuel cell market.
Sprintex's recent re-entry into the ASX preceded a launch of their ideas for a cleaner atmosphere. Along with a $6.6 million recapitalisation, the company has reshuffled their management team as led by Jay Upton, the new CEO of Sprintex Limited (ASX: SIX). The now debt-free Sprintex anticipates innovating carbon-free eCompressors (electric compressors) and continues to manufacture their patent-protected twin-screw supercharger product. The company has previously been highly associated with the automotive and vehicle performance industry but is now speeding down the zero-carbon engine route.
The lucrativeness of the 'green energy' and clean air market makes this partnership important for investors. In a world increasingly more captivated by zero-emission technology, the high-growth expectancy for the green hydrogen fuel industry puts both companies on a mutually fortunate footing. Under the deal, Sprintex will bring their expertise in compressors to meet Aeristech's renowned advanced electric motor engineering.
In his recent conversation with me, Jay Upton said, "It's a very good marriage… In that, we are the compressor experts and (Aeristech) are the electric motor experts. We can enhance one another's products".
Production of new conventional programs has commenced in Malaysia and is to be ready for retail by the close of this calendar year. Chinese production for e-compressors is due to begin this month.
Who is Sprintex Limited?
The company is heavily associated with the street performance, and motor racing industry.
With its roots in Glasgow, Sprintex Limited was originally called Fleming Thermodynamics or FTD. Founded by Professor Dan Wright MBE, FTD took inspiration from the Swedish inventor of the twin-screw compressor, Alfred Lyshom. From here, engineers at FTD developed the Sprintex Supercharger, a mechanically driven rotary compressor that increased speed while allowing lower discharge temperatures and higher volumetric efficiency.
"I've been involved in motorsport all my life," said Upton, "In the late 90s, Sprintex was a sponsor of mine… you could not win that category of racing without a Sprintex Supercharger".
Today, the Sprintex Supercharger is still patented technology unique to the Sprintex brand and has been an engineers' choice in both drag racing and multiple major car conglomerates.
Based in Suzhou, China's highly developed economic region, Sprintex Limited has attained a 1,500 square meter site for high-speed compressor production (according to the investor site Hot Copper). The technology company begins production in China soon, having already confirmed it will research, develop, and manufacture clean energy for industrial applications in China. The company states the facility will aim to produce up to 50,000 high-speed electric compressor units a year and is staffed by an experienced team of turbo-machinery and electrical engineers.
What are eCompressors: Explaining the Future
During our insightful interview with Jay Upton, the CEO explains how eCompressors and hydrogen fuel cells work. Sprintex's eCompressors (electronic compressors) comprise contactless air bearings, carbon fibre and ceramic rotors, which feed a fuel cell stack to produce electricity from hydrogen and oxygen. Compact and light, Sprintex and Aeristech's innovation has reduced compressor size and weight by 30% compared to high-speed compressors that are already in the market. In addition, the product features a compressor able to go from motionlessness to spinning at 100,000-160,000rpm in a moment.
Hydrogen fuel cells emit zero carbon compared to other non-electric engines, making them unique and inherently valuable. A fuel cell needs a compressor to operate efficiently, to supply sufficient oxygen (from air). By combining hydrogen and oxygen in the cell, over a catalyst, the result is a generation of electricity. No oil is involved in the process (as the machinery does not rotate against each other), the only emission is steam: no carbon, no pollutants, just very cool science.
The zero-emission technology will meet the high anticipation from buyers, with an initial range of products that range from 6kW to 25kW models to be used for a range of non-emitting machines, covering the current fuel cell market. According to Sprintex, the electricity costs of eCompressors will reduce by up to 30% compared to other compressors on the market.
The units are also available as electrical 'superchargers' for hybrid vehicles and high-efficiency air and gas compressors.
The products are outlined in the agreement as:
1. fuel cell electric vehicles and stationary fuel cell generators;
2. industrial turbo blowers for clean air supply and water treatment aeration; and
3. multi-stage industrial compressor sets.
Global Demand: The Race to Zero
The demand for this technology mimics the company's collaboration efforts for rapid growth. Clean emission transportation (buses and long-haul vehicles), water purification, industrial and domestic application have been consumer interests for years but are now being actively pursued by Sprintex and Aeristech.
Government enthusiasm for zero-emission vehicles is prevalent in both foreign and local countries. Australia alone has roadmaps for 50% of all lightweight vehicles on the market to be zero-emitting by 2030 (Victoria). The plans are supported by a $100 million package of policies and programs to help their goal. And Australia isn't the only nation aiming to achieve a shared climate goal.
Interestingly, the nation renowned for having cities obscured by layers of black pollution and civilians suffering from onset emphysema is now stepping up as leaders in the green energy game. And they're handing out subsidies for anyone who can help them get greener.
China is in the foresight for marketability for Sprintex and Aeristech's latest partnership and products. The involvement of eCompressors is limited to establishing a factory in China but to be in proximity to supply Zero-Emission Vehicles (ZEVs) to satiate China's eagerness for a cleaner national atmosphere. In the past decade, China has become the world's largest market for electronic vehicles and products. The International Energy Agency (IEA) stated that the nation accounts for over 90% of the world's sales for electronic vehicles (cars, buses and trucks). Like Australia, China plans for 50% of their vehicles be ZEVs, varying from electric, plug-in hybrids or, Sprintex/Aeristech-developed fuel cell-powered. The other half is to be hybrid vehicles. This vast development is a result of targeted policies by China to encourage the EV market, including incentives, subsidies and vehicle regulations.
The Chinese government is a prime example of government support following the technology, as China has granted multiple subsidies for the operation in Suzhou. According to The Market Herald, the facility will not be subject to rent for three years as it will be subsidised by the local government. It will also have tax exemptions of up to 80%. China's proximity to overseas markets also puts the enterprise at a massive advantage for objective success.
“The industry is looking for solutions… we have the experience of these unusual applications” - Sprintex CEO, Jay Upton
eCompressors Make Their Way Off-road
In Samso's August interview with Managing Director and CEO of Sprintex, Jay Upton emphasises that although the history of Sprintex is very much in the automotive supply industry, the Hydrogen Fuel Cell Compressor is applicable for other more creative uses. For example, it is a documented plan for Sprintex to use their eCompressor technology within the water treatment industry, enabling wastewater purification to emit very little carbon during the treatment and aeration process. In addition, the engineering of the hydrogen fuel cell compressors includes the providing of constant airflow, making their application incredibly versatile for both the practical realm and the broader market.
Mr. Upton has also delineated plans for Turbocompressor products. These turbo blowers are another outcome of Sprintex's collaboration with Aeristech and are high-speed units for clean air supply. The versatility of application for these products also ranges from use in medicine, food preparation and distribution, to industrial manufacturing. In Samso's conversation with Mr Upton, the CEO mentions his company's work in reducing the cost of electricity usage by up to 30% when compressing air, - an astronomical saving for any industry. He comments, "I think you're going to see us (Sprintex) move quite broadly into certain applications in industries simply because we are more efficient".
Ultimately, the invention of the eCompressor doesn't only mean that products will be powered and produced in a way that minimises carbon emissions. It also means that cost efficiency is aiming to improve for the multitude of industries that manufacture compressors.
Now, onto some statistics that call for attention:
The partnership's debut saw ASX: SIX shares spike by 48%, and shares soar from 4.94% to 8.5%, as stated by The Market Herald. For the same reason, no doubt, the collaborative development of these two companies have been alluring to investors. A step in the transformative direction of eCompressors, Sprintex has rebranded itself as a trailblazer in the green energy industry.
Hydrogen fuel technology is not a new idea. Previously, hydrogen technologies have experienced cycles of expectations that were unrealised due to the lack of economic viability. However, decarbonisation of the global energy system has remained a priority to many governments and individuals. Improvements in the cost efficiency for eCompressors, and the supportive policy and interest for the technology, have enabled the cause to gain momentum into a reality for a zero-emission run world.
“Companies are confident that under this collaboration, both parties will accelerate the expansion of market coverage and gaining profit.” - Sprintex Limited
Improvements in cost have aged with the optimism for hydrogen fuel cells. Two decades ago, the production of of a hydrogen fuel cell city bus would have cost "$350,000 for the bus and another $2 Million for thefuel cell, making it not so viable", according to Mr. Upton. Today, the range is claimed to be much cheaper, but the statistics are unclear. What is documented is the expectation for hydrogen fuel to become a lot more affordable in the coming decade. According to a 2020 ANU study titled "Green Hydrogen Production Costs in Australia: implications of renewable energy and electrolyser costs", the expectation for hydrogen fuel costs is expected to drop to $2-3/per kg by 2030.
After decades of unaffordability causing the electronic compressor market to suffer, the demand for eCompressors is almost impatient for products. A strengthened global resolve to mitigate climate change has opened the electronic engine market wide open - on which Sprintex and Aeristech have capitalised.
Sprintex already has:
The manufacturing base in Asia
The distribution contacts in the USA, Middle East and Asia
Current production in Malaysia and, recently, China
A retail partner and aftermarket agreement (Aeristech)
Mr. Upton also reassures investors that the technology developed between both companies is patent protected as Intellectual Property (IP), making them exclusive powerhouses in the industry. So it is no surprise that the announcement of the contract was met with such interest.
The contract states 24 months, of which Sprintex is deemed the supplier of eCompressors and similar products to Aeristech.
While the technology behind Sprintex and Aristech's range of renewable energy compressors may not be entirely new, the collaboration has developed their products into highly impressive tools that serve a dual purpose. On the one hand, this technology is a significant step towards a cleaner Earth - a popular direction as an international imperative. On the other hand, the lucrativeness of the industry and the way the market has opened up to accommodate massive success indicates a fascinating dynamic between social intent and economics. While I am no expert in investing or engineering, I can see the significance of green energy is in its ability to generate optimism in all places.
About the author
Lucia Darcy is an up and coming writer, columnist and essayist with her roots in social and philosophical academia. Lucia is a current Literary Studies student who aims to start her career as a copywriter and freelancer by engaging with various companies and topics. Her involvement with Samso is based on a shared curiosity for investment, mining and global economics. She believes that although her approach to each blog is from a place of learning, her writing is for people like herself - novices and autodidacts who wish to educate themselves on a range of matters.
The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer.
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