In connection with Enersize announcing the conclusion of a new agreement directly with Hankook Tire in Jiaxing on June 24, 2019, the Company also announced that the level of compensation for the company's local sales partner, Venergy, would be determined in subsequent negotiations.
Continuation with Hankook and Aden
Due to the fact that no further commission will be paid to Venergy and that Venergy will in future have no influence on the process for upcoming projects within the Hankook Group, this enables Enersize to instead tie Aden closer to these projects in a role as implementation partner. The Company's view is that this will strengthen the upcoming sales process towards Hankook, which is already very positive thanks to the successful project in Jiaxing. Aden has stated its intention to support Enersize in this process with sales and implementation resources. The ongoing negotiations for a long-term strategic partnership with Aden continue in parallel.
Effects on Enersize's sales in the Chinese market as well as existing Venergy customers
The settlement also concludes the agreement the company had with Venergy regarding sales commission for future new customers. Instead, Venergy and Enersize have agreed that any new potential customer that Venergy identifies in its network can be offered to Enersize against a "finder’s fee", which will be negotiated on a customer-by-customer basis. With this arrangement, Venergy will have no impact on either the Enersize sales process or later project execution. Venergy has a large network within Chinese industry as well as strong local political connections, which Enersize continues to have access to in this way. As a result of the settlement, Venergy's influence over project planning and implementation will end, which according to the company means an improved opportunity to offer both customers with Q+ installation and customers in earlier stages Enersize’s services and products in line with the Company's new business model. Enersize will in the future offer former Venergy customers projects and products in accordance with the company's new business model.
Enersize will acquire the rights of the following customers in connection with the agreement:
- Hankook – no future compensation for Venergy
- Pangang – Venergy is entitled to 14% of future project revenue
- Flat glass – Venergy is entitled to 3% of future project revenue
- Xinyi glass – no future compensation for Venergy
- BBMG – no future compensation for Venergy
- Pharma No4 – no future compensation for Venergy
- Xinfengming – Venergy is entitled to 3% of future project revenue
- Tongkung – Venergy is entitled to 3% of future project revenue
“I am very pleased with the settlement with Venergy, which I have now got in place. We can now handle ourselves the accumulated customer base and existing Q + installations and we can thus act freely at our own discretion, which I see as necessary in order to be able to work to lift previous profit-sharing projects into our new way of doing business. Perhaps most important in the short term is that the settlement gives us freedom to continue working with sales to the Hankook Group's other factories. In this work, it is also very gratifying that Aden has expressed his full support and provides the necessary resources for this to move forward as quickly as possible. With the closure of the ongoing rights issue in view, long-standing negotiations with Aden and excellent conditions for more Hankook projects, I look forward with anticipation to the coming months development for Enersize in China.”, says Anders Sjögren, Managing Director.
Aden Services is a fully integrated facility management company with 26,000 employees, operations in 25 countries and 80 different Chinese cities. Adenergy was started in 2018 by Aden with the aim of focusing even more clearly on offering comprehensive services in energy efficiency and emission minimization with the help of IoT. Aden's customers are mainly large multinational companies and most of the operations are in China. The wholly owned subsidiary Adenergy provided implementation resources to Enersize for the implementation of the Hankook project. Aden Services and Adenergy are headquartered in Shanghai, China. Enersize and Aden have an ongoing negotiation of strategic cooperation on sales and project implementation in the Chinese market for Enersize products Q+ and LEAQS.
About Enersize new business model aimed at Facility Management companies
Enersize's new business model means that sales, installation and performance of monitoring and efficiency services will mainly be driven by independent distributors who are major players in industrial maintenance and service, so-called "Industrial Maintenance" or "Facility Management" companies that already have established relationships with industrial customers. Enersize is responsible for providing web-based software services for monthly license fees and stands for technical support and access to specialist knowledge. In this way, sales can be scaled up quickly and with little need for capital.