Stockholm – Negotiations between Scandinavian Enviro Systems AB (Enviro) and Michelin “are proceeding well,” Thomas Sörensson, CEO of the Swedish tire recycling group said 27 Aug.
“It is still our understanding that we will be able to make announcement with more detailed information about the terms of our partnership by the end of October,” he added in Enviro’s first-half financial report.
Sörensson went on to describe Michelin's investment as a shareholder in Enviro and planned strategic partnership as “a major breakthrough, even if certain contractual details still have to be settled.”
Under the cooperation deal, Michelin has taken a 20% stake in Enviro, which has developed ‘proprietary technology’ to recover oil, steel and carbon black from end-of-life tires.
And, under a letter of intent announced in April, the parties are to: expand the area of application for Enviro's pyrolysis technology, jointly build a plant based on the technology; and supply arrangement between both parties.
Agreements were to have been finalised by 30 June but, partly due to the Covid pandemic, the deadline under the letter of intent was pushed back to the end of October.
Enviro has, thereby, extended the contractual exclusivity for Michelin with respect to collaborating with other tire makers or suppliers until then.
“Because Michelin has this exclusivity and our focus is presently on our negotiations with them, we have elected to have a lower activity level in regard to other potential collaborations,” said Sörensson.
This, noted the CEO, could potentially lead to that one or more of prospective partners deciding to continue with alternative plans.
Meanwhile, Enviro is continuing its production- and technical-verification work at its plant in Åsensbruk, the company’s leader also pointed out.
Due to previously announced investment projects at the plant, second-quarter production levels have been lower than during the first three months of the year.
“Our assessment is that we will incrementally ramp up to normal production capacity again during the third or fourth quarter,” said Sörensson.
With regard to technology-development, the CEO said the main focus was “on increasing the extraction of oil in our process and finding new areas of application for the oil.”