Michelin and Enviro to build joint recycling plant

On 22 December, Scandinavian Enviro Systems and Michelin agreed on the principle terms for establishing a first jointly owned recycling plant and a license agreement regulating the terms of use for Enviro’s recycling technology as well as subsequent compensation. At the same time, the agreement details that compensation applies to the first plant as well as for any future plants that Michelin might decide to build.

Under the terms of the two parties’ agreement, Michelin is entitled to establish its own recycling plants based on Enviro’s technology. The terms could also see Michelin pay an upfront lumpsum to Enviro with a predetermined, fixed non-recurring amount as well as royalties based on a percentage of the plant’s sales. The license agreement is set to remain in force until 2035.

Enviro is entitled to continue establishing recycling plants together with other parties.

“Despite the pandemic and the ensuing delays, we have now been able to finalize our agreement regarding a strategic partnership with Michelin. This is obviously a very important milestone for Scandinavian Enviro Systems and also a very significant validation of our technology given Michelins position in the global tyre market. The protracted negotiations were never part of the plan but on the up-side both Michelin and other international manufacturers were given more time to test our recovered carbon black with great results. This and the now reached agreement bode well for the future”, said Enviro’s Chairman Alf Blomqvist.

“…I am delighted that we have managed to reach these main principles agreements in a year where the unprecedented sanitary situation has made it very difficult to ‘sit together’ and plot the course for our future collaboration! I am excited to start working on concrete actions in light of our partnership once Enviro has obtained approval by its shareholders vote to move forward together”, said Sander Vermeulen, Vice President Marketing & Business Development, Strategy & New Businesses High-Tech Materials at Michelin and director of the board of Scandinavian Enviro Systems.

The letter of intent to enter into a strategic partnership announced by Enviro and Michelin in April this year encompassed a total of four main areas. In addition to an already completed investment in Enviro’s shares, which made Michelin the largest owner of Enviro with a total holding of 20 per cent, the letter of intent also included a joint project to construct a facility to industrialise the technology, a development agreement to broaden the application of Enviro’s pyrolysis technology and a joint supply agreement between the parties. Regarding the development agreement and joint supply agreement, negotiations are ongoing.

The agreement is subject to approval by Enviro’s board in January 2021.