Xeros Technology Group, the developer of polymer bead cleaning technologies, signed a licensing contract on 18 July with Jiangsu SeaLion Technology Development, a wholly owned subsidiary of the market-leading Chinese commercial washing machine manufacturer Jiangsu SeaLion Machinery (“Sea-Lion”) at the annual China International Laundry Industry Exhibition.
Sea-Lion will integrate Xeros’ proprietary technologies into its own commercial washing machines and sell them through its extensive distribution network in China, on an exclusive basis. The first sales are expected in 2019.
Sea-Lion will be the first partner to incorporate Xeros’ latest XDrum technology. XDrum is a simple, low cost solution for OEMs to easily incorporate Xeros’ patented water-saving XOrb polymer technology into their machine designs.
The contract runs for a 10-year period with minimum annual sales targets agreed between both parties. Xeros will receive a royalty on both machine sales and on the multi-year service contracts signed between Sea-Lion and the customer.
Sea-Lion is a market leading manufacturer of commercial washing machines and laundry equipment in the China market and has worked closely with Xeros as the manufacturer of Xeros’ commercial washing machines since 2013. Sea-Lion has sales and service offices in each of China’s 30 provinces and in cities such as Beijing, Shanghai, Chongqing and Shenzhen, serving customers in the hotel, industrial laundry, hospital and dry cleaning markets.
China is a large and attractive market for Xeros’ commercial laundry technology. Xeros’ research indicates that approximately 27,000 commercial washing machines are sold in China every year and water rates are increasing significantly for industrial users across large parts of China.
The contract with Sea-Lion is part of the Group’s strategy to commercialise its technologies with partners who have strong positions in major markets, enabling Xeros to make financial returns on its intellectual property and know-how with relatively low capital intensity.
China is an important market for the Group’s current portfolio of applications and provides significant commercial opportunity. Xeros’ technologies uniquely offer both sustainable environmental and competitive advantages in a country with increasing water stress and pricing.
Xeros has previously announced that it is undergoing testing and validation trials with two other market leading commercial washing machine OEMs. These trials are continuing and Xeros expects to sign further agreements with major OEMs in the future.
Mark Nichols, chief executive of Xeros, said: "This is a major milestone for Xeros in the commercialisation of our technologies and the first contract signed under our “Symphony Project” licensing model. It provides us with access to one of the world’s largest and fastest growing markets.
“This contract provides a significant competitive advantage for Sea-Lion whilst enabling us to generate a return on our intellectual property. We selected Sea-Lion given their market-leading position, extensive distribution network and our successful working relationship since 2013.
“We see significant opportunity in China across our portfolio of technologies, given both the scale of the marketplace and the central government’s plans to improve sustainability and reduce water consumption.”
Hong Chen, Chairman of Jiangsu Sea-Lion Machinery, said:"This licensing agreement brings Xeros’ new cleaning technology to our customers throughout China, the world’s fastest growing market for laundry equipment. They are demanding laundry equipment which saves them money, delivers better quality washing, is reliable and is easy to maintain – our machines using Xeros’ world-leading cleaning technology will deliver this.
“The Chinese Government’s latest actions to conserve water and reduce water pollution are leading to rising prices for water and more demanding specifications for washing machines.
“Sea-Lion’s machines using Xeros’ technology will be the leader in offering both better cleaning to our customers and delivering laundry solutions which can radically reduce water consumption in support of the Government’s sustainability objectives and green agenda.”