Pyrolyx AG has signed a Letter of Intent (“LOI”) with Continental AG. The LOI details a five-year supply agreement building over two years to 10,000-15,000 tons per annum of recovered Carbon Black (rCB). The rCB will be initially supplied both from Pyrolyx’s existing plant in Stegelitz Germany and its new plant in Terre Haute Indiana, which is due to be operational in June 2019. The minimum five-year supply agreement requires the development of additional Pyrolyx manufacturing capacity in Eastern Europe.
Pyrolyx Has Signed an Agreement with Continental
Once the Eastern European facility is operational, which is expected in late 2021, Pyrolyx will satisfy the tyre manufacturer’s initial European regional rCB demands from this facility. The expectation of both parties is that the demand for rCB will increase over time and, if it does, the manufacturer may increase its demand from Pyrolyx beyond the initially stipulated annual tonnage.
Pyrolyx’s USA CEO, Thomas Redd, said: “This LOI is an extremely positive development for Pyrolyx and validates Pyrolyx’s process and products. Pyrolyx is a world leader in assisting the carbon black industry to decrease its environmental footprint and this agreement, once implemented, will eliminate the need to burn or dump four million scrap tyres annually and reduce CO2 emissions by over 32,000 tons annually, as compared to current carbon black manufacturing techniques.”
Michael Triguboff, Pyrolyx AG’s CEO, noted that Pyrolyx had already enjoyed a long-term relationship with this international tyre manufacturer, benefiting from a long term joint development agreement between the two firms. Pyrolyx has supplied this tyre manufacturer with product from its Stegelitz Germany plant for approximately three years. Mr Triguboff noted that both companies will cooperate to finalise a formal binding offtake agreement in the coming months.
Mr Triguboff said: “We are all very excited that Pyrolyx will hopefully prove to be an example of impact investing – achieving strong financial and quantifiable environmentally sustainable returns.”
The LOI is a non-binding statement of intention of the parties to enter into the supply agreement. Pyrolyx is confident a binding supply agreement will be entered into with the tyre manufacturer.
Source: Pyrolyx AG