(MENAFN- ProactiveInvestors - Australia) RedFlow (ASX:RFX) has extended its reach with the appointment of Probe Corporation Pty Ltd as an initial non-exclusive systems integrator partner in South Africa.
RedFlow is a leading developer of zinc-bromide flow batteries, and is well-funded with over $10 million in cash at the end of June 2014.
Probe is a Johannesburg-based specialised power supplier that serves the heavy duty mining and construction equipment industry through a national dealer network with a comprehensive range of services.
It also distributes maintenance-free batteries for industrial applications including backup power supplies for the electronic industry, UPS, radio and telecommunications industries.
In September, RedFlow signed a non-exclusive agreement with BlueSky Energy GmbH for supply and a point of presence in Europe.
Contract Manufacturing
The company added that outsourcing of manufacturing to American supply chain solutions company Flextronics (NASDAQ:FLEX) is progressing in line with expectations and the transfer of the manufacture of the stack is well progressed.
Flextronics is a US$5.33 billion market cap.
It noted that while this is still in progress, completed batteries are now being manufactured and distributed directly from Flextronics.
The company will continue to supply electrodes to Flextronics until the manufacturing transition is completed.
Manufacturing volumes will increase over the next 3 months and it is intended to move to full turnkey manufacturing with Flextronics by December 2014.
Increased manufacturing volumes are in line with anticipated sales and, although firm orders have yet to be received, discussions are in progress with customers about these potential commercial sales opportunities.
Product Certification
The company is also in the final stages of obtaining CE certification for its product which is expected to be completed in November 2014.
This certification allows partners to integrate the ZBM for use in energy storage systems in Europe.
R&D Tax Credit Refund
RedFlow has completed and submitted its tax return for the tax year ended 30 June 2014 and expects to receive a Research and Development tax credit refund of about $1.8 million in October 2014.
Analysis
Proactive Investors' believes that RedFlow's appointment of Probe Corporation as an initial non-exclusive systems integrator partner provides the company with a pathway into the South African market.
This follows on from the recent supply agreements with BlueSky and ‚¬31.6 billion capped Schneider Electric.
Full turnkey manufacturing by Flextronics is also expected by December 2014.
The increased manufacturing volumes are in line with anticipated sales with firm orders expected soon.
RFX has previously forecast sales of at least 250-300 batteries per month by the end of 2015.
Zinc bromine batteries are expected to have a 19% market share the energy storage market predicted to be worth $114 billion by 2017.
The company has also completed its prototype large scale energy storage system using zinc-bromide flow batteries that is ready for deployment in the field.
This gives it a cost competitive large scale and high voltage product that can meet the demands of large scale energy storage from wind and solar as well as a variety of "mini-grid" applications.
RedFlow recently strengthened its board with the appointment of Internode founder and NBNCo director Simon Hackett as a non-executive director.
In May, Hackett led a consortium to invest $2.2 million in the company.
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