AFC Energy PLC (AIM:AFC, OTC:AFGYF) has signed a Strategic Supplier Agreement with Zollner Elektronik, which, noted Peel Hunt, is Europe’s largest contract manufacturer of electronic mechanical services with more than 13,000 employees.
The agreement stipulates that the scaled production of each fuel cell module will occur in Zollner’s German facilities outside of Zandt, with the potential for international expansion across multiple continents.
Zollner’s role in manufacturing is critical to the scale-up of AFC Energy’s hydrogen-powered generator production, with call-off orders being placed in line with demand growth.
This agreement with Zollner follows a contract manufacturing agreement that AFC Energy signed with Illuming Power, based in Vancouver, Canada, in May 2024, for fuel cell plates and stacks.
These outsourcing agreements align with AFC Energy’s stated and planned low-capital, outsourced contract manufacturing strategy.
Buy with a 125p target price is Peel Hunt’s recommendation.