B.C. fuel-cell firm secures distribution agreement in Japan
Deal with Toyota Tsusho Corp. runs through 2020; stock spikes again
Burnaby’s Ballard Power Systems secured another major inroad into East Asia Thursday, announcing a distribution deal that could see the firm’s product reach a wider swath of the Japanese market.
Ballard and Toyota Tsusho Corp. — a subsidiary of Japanese giant Toyota Group — reached a deal that will run through 2020. Under the agreement Toyota Tsusho will distribute Ballard fuel-cell products in Japan.
While it is too early to know exactly the type of products Toyota Tsusho will sell and in which sectors the hydrogen fuel cells will see the biggest gains Guy McAree, director of investor relations at Ballard, said the announcement signals access into the world’s third-largest economy like never before.
“To be perfectly honest, this is not a short-term deal,” McAree said. “The impact of this will happen over the mid- and longer term, and it’s going to take a little bit of time … (but) quite frankly, the Japanese government is very, very supportive of hydrogen fuel cell technology, so this aligns with the government’s plan to deploy fuel-cell products in Japan.”
Ballard said it plans to hire an expatriate sales official to work with Toyota Tsusho in Japan to formulate and carry out an exact sales plan. McAree said Tokyo created a plan in 2014 for fuel-cell utilization in Japan, including items such as buses and public transport as well as forklift trucks and passenger vehicles, but added fuel-cell application may not be limited to those fields.
The announcement coincided with an 8.7 per cent stock spike for Ballard Thursday, closing at $2.75. Officials say the stock price reflects investors’ reaction to Ballard’s own Pivot to Asia, started two years ago with the arrival of new president and CEO Randall MacEwen. In July, the company announced it signed an agreement to build fuel cells under licence in China — a deal valued at $168 million over five years. The deals — which officials called “landmarks” — may push Ballard closer to profitability in the next few years. McAfee pointed to Ballard’s second-quarter results, where the company posted a $5.8-million net loss, down from $10 million in the first quarter. Revenue grew 58 per cent in the second quarter, yearover-year.
Ballard’s stock responded accordingly each time: share prices spiked 44 per cent to $2.59 on July 18, after the Chinese deal was announced. The second-quarter results spurred another spike to $2.67 on July 27. “If you combine this agreement (in Japan) with the work we have been doing in China, for example, I think it really starts to show there’s real traction happening in markets around the world,” McAree said, adding these initial inroads into East Asia may ripple to other jurisdictions in the region. “It’s absolutely been part of the strategy in the last two years.”