First Graphene Ltd (ASX:FGR, OTCQB:FGPHF) has signed an exclusive technology partnership deal with US-based NeoGraf Solutions LLC, the world’s leading provider of graphite materials to multiple industries.
This agreement provides NeoGraf with graphene products and solutions to enhance its range and industry reach within the US market and opens the way to a sizeable US market for First Graphene.
The target is to reach and exceed the minimum annual uptake of 10 tonnes of PureGRAPH® within five years with performance measures in place.
Direct path into the US
First Graphene managing director and CEO Michael Bell said: “This deal provides a direct path into several established and emerging sectors in the US.
“Not only is NeoGraf a well-known, US-based company, but it has a strong reputation and relationships with key organisations in target industries that know and understand how graphene can benefit them.
“The deal is governed by a range of performance criteria focused on developing the market and we are excited to be establishing this long-term, mutually beneficial relationship with NeoGraf.”
Agreement details
The 10-year agreement to develop and grow the graphene market in the US is subject to performance measures that commence with a minimum uptake of two tonnes of First Graphene’s PureGRAPH® product in year one, to establish and build market share.
There are strong expectations of growth that will scale up to a 10-tonne minimum by year four and then in excess of 10 tonnes thereafter, with precise quantities to be determined by an annual review.
NeoGraf will sell the PureGRAPH® product line under its Graf-X brand, which is well known and has an established reputation in the US market.
Due to its repeatable specifications, high aspect ratio platelets and availability in large volumes, PureGRAPH® was deemed to be a good fit with the Graf-X brand.
The tonnages referred to are annual purchase minimums, which if not achieved would result in the agreement reverting to a non-exclusive arrangement.
By way of illustration only, achieving the minimum tonnage of 2 tonnes in the initial year would result in revenues of between A$305,000 and A$375,000 annually, depending upon the mix of product categories ordered.
Achieving the increased anticipated minimum in year 4 of 10 tonnes would result in revenues of between A$1.5 million and A$1.8 million annually, again depending on product mix and based on current pricing models.
These amounts are illustrations only of the potential revenue if minimum order targets are met and are not a forecast of future revenues.
Product mix making up the annual tonnages - and therefore pricing and overall revenues - may vary as NeoGraf will market First Graphene's Australian-manufactured products to different mutually agreed market segments.
NeoGraf Solutions
NeoGraf Solutions has been the world leader in the industry for more than 140 years, developing the most comprehensive graphite solutions since 1881.
Its products are used to enhance performance of some of today’s most advanced technologies, from lighting and audio-visual equipment to spacecraft.
With its headquarters in Ohio, US, it is represented throughout the Americas, Europe and Asia.