Re Agreement
6 April, 2005
ROLLS-ROYCE AND SINGAPORE PARTNERS TO INVEST IN FUEL CELLS
Rolls-Royce has signed an agreement with a Singaporean consortium of companies
to invest together US$100 million in developing a commercially viable power
system based on fuel cell technology.
Having begun research into fuel cell technology in 1992, Rolls-Royce
established a wholly-owned subsidiary, Rolls-Royce Fuel Cell Systems Ltd
(RRFCS), in January 2003 to manage its future research and development
activities in this field. By bringing the unique engineering skills of
Rolls-Royce to bear, it is intended that RRFCS's work will lead to the
production of highly efficient, cost-effective and environmentally friendly
power systems.
Under the terms of the agreement, Rolls-Royce and the Singapore consortium,
EnerTek Singapore Pte Ltd (EnerTek), will between them invest a further US$100
million in the project and, after allowing for capital already invested and
value created by Rolls-Royce, EnerTek will hold a 25 per cent stake in RRFCS.
In addition to its financial commitment, the Singapore consortium will bring
valuable technology and expertise to the project, particularly in the areas of
ceramics, manufacturing automation and core research. One of the consortium
investors, Accuron Technologies, is supplying RRFCS with ceramic components
through its subsidiary company, Advanced Materials Technologies.
EnerTek also comprises two other parties: one is an investment subsidiary of
the Singapore Economic Development Board (EDB), EDB Investments Pte Ltd, and
the other is Temasek Holdings (Temasek), a Singapore-based investment company.
Speaking at a signing ceremony and lunch in Singapore today, Sir John Rose, the
Chief Executive of Rolls-Royce, said: "A prudent approach to this exciting but
still embryonic venture dictated a need to look for partners who could shorten
the odds on success with both funding and relevant technical skills. We have
found them here and are delighted to be building further on the strong ties
that already exist between our Group and Singapore."
Charles Coltman, the Chairman and Chief Executive of RRFCS and formerly the
Director of Corporate Development at Rolls-Royce, said: "The commitment of
US$100 million in additional funding shows how seriously we and our partners
view this opportunity. We anticipate a significant market for the right
product. The science of the fuel cell is no secret - but turning it into an
affordable and competitive technology will need engineering skills of a high
order. We are on track and cautiously optimistic."
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Present at the event were Dr Vivian Balakrishnan, Singapore's Minister for
Community Development, Youth and Sports and Second Minister for Trade and
Industry, Teo Ming Kian, Chairman of EDB, Tan Suan Swee, Managing Director
(Strategic Development) of Temasek and a designated board member of RRFCS, as
well as Tam Hock Chuan, Vice President (Business Development) of Accuron
Technologies.
Teo Ming Kian, EDB's Chairman, said: "Singapore is proud to be a partner to
Rolls-Royce in such a leading edge development. That Rolls-Royce has chosen
Singapore is a strong testimony to our attractiveness as a location to develop
and commercialise new technology. The venture's success will strengthen
Singapore's position as a hub for new energy technologies."
Tan Suan Swee from Temasek said: "Temasek sees strong commercial potential in
the solid oxide fuel cell being developed by RRFCS. This technology will be
able to generate power more efficiently than a conventional gas turbine or
reciprocating engine. We find in Rolls-Royce a strong partner with whom to
pursue a new business venture in power systems."
Loh Chuk Yam, President and CEO of Accuron Technologies said: "We are happy to
take part in this venture. We believe our capabilities in ceramic technology
will add value to this partnership."
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BACKGROUND NOTES FOR EDITORS
1. Fuel cells generate electricity by combining fuel and air in an
electrochemical reaction. They were first demonstrated in the 19th century
but to date have always been relatively large and expensive to manufacture,
depriving them of any real commercial application.
2. Rolls-Royce began researching fuel cell technologies in 1992 and decided to
pursue the commercialisation of its expertise in 2002. By utilising its
aerospace technology skills,
Rolls-Royce has designed an electrical power system that integrates a solid
oxide fuel cell with a micro turbine. This power system promises to be
significantly more efficient than any conventional gas turbine or
reciprocating engine, with far less impact on the environment. The current
objective is a stationary power-generation system providing around 1
megawatt of electricity, for market delivery some time before the end of
2008. For more information please visit: http://www.rolls-royce.com/energy/
tech/fuelcell.pdf
3. RRFCS is at present principally located at the main Rolls-Royce facility in
Derby, UK, and also has employees in Singapore and the US. It is in the
process of preparing a new site for itself in the UK at Loughborough
University's business park, Holywell Park. A first automated production
line for some component parts is due to begin operation there by mid-year.
4. Rolls-Royce has recently flagged its intention to seek out appropriate
partnerships based on Singapore's wide-ranging research into topics with
potential industrial applications. Last December it signed a collaborative
Master R&D agreement with A*Star, Singapore's government-owned Agency for
Science, Technology and Research. The agreement enables Rolls-Royce to
collaborate with A*Star research institutes in many research areas,
including materials science and manufacturing automation for the fuel cell
programme.
5. Rolls-Royce has strong and long-standing business partnerships with
Singapore Airlines (SIA), Singapore Aircraft Leasing Enterprise (SALE), Silk
Air (the regional subsidiary of SIA), SIA Engineering Company, the Republic of
Singapore Air Force (RSAF) and ST Aerospace Engines Pte Ltd, an ST Engineering
company. Singapore is also the regional headquarters for the company's
Commercial Marine and Energy businesses. In all, the company now has over 500
Rolls-Royce and joint venture employees in Singapore. For more information
about Rolls-Royce activities in Singapore please visit: http://
www.rolls-royce.com/singapore/activities/energy.htm
6. The Economic Development Board (EDB) is Singapore's lead agency responsible
for planning and executing strategies to sustain Singapore's position as a
global hub for business and investment. It works closely with local and foreign
companies across a diverse range of activities in both manufacturing and
services to help them move towards higher value-creating operations in an
increasingly knowledge-based and innovation-driven environment. It also
encourages companies to use Singapore as a headquarters and total business
centre to manage their global or regional functions to service their global or
Asia Pacific operations. For more information on how EDB can help in your
business and investment, please visit www.sedb.com.
7. Temasek Holdings, established in 1974, is an Asia investment company
headquartered in Singapore. Its diversified global portfolio of S$90
billion spans Singapore, Asia and the OECD economies in a range of
industries. These include telecommunications and media, financial services,
property, transportation and logistics, energy and resources,
infrastructure, engineering and technology, as well as pharmaceuticals and
biosciences. Singapore-based Temasek-linked companies include well-known
listed firms such as Singapore Airlines, SingTel, DBS Bank, SMRT
Corporation and Neptune Orient Lines. For more information, please visit:
www.temasekholdings.com.sg.
8. Accuron Technologies is a precision engineering and technology group
headquartered in Singapore, having core competencies in precision
manufacturing, material processing and
systems design and integration. It serves the aerospace, electronics and
medical equipment industries. For more information please visit
www.accurontech.com.
9. Rolls-Royce operates in four global markets: civil aerospace, defence
aerospace, marine and energy. It is investing in technologies and
capabilities that can be exploited in each of these sectors to create a
competitive range of products. Annual sales total nearly £6 billion, of
which 55% are service revenues. The current order book stands at more than
£21 billion.
For further information please contact:
Martin Brodie
Rolls-Royce plc
Tel: +44 (0)207 227 9140
email:martin.brodie@Rolls-Royce.com