The Leading Journal for the Tyre Recycling Sector

The Leading Journal for the Tyre Recycling Sector

Michelin and Enviro Reach Agreement

Enviro and Michelin agree on key principles for a strategic partnership that puts pyrolysis square in the headlights of the tyre industry.

Michelin Invests in Enviro’s Technology

As part of the strategic partnership negotiations, Scandinavian Enviro Systems and Michelin have 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. The agreement is subject to the approval of Enviro’s owners at an Extraordinary General Meeting (EGM) and the closing will be done after the EGM.

The key principle terms have been negotiated as a result of the letter of intent regarding a strategic partnership that was announced by both companies in April this year. The agreed key principles include terms for the establishment of a first jointly owned recycling plant, and terms for how Michelin shall compensate Enviro for use of the company’s patented recycling technology for end-of-life tyres. The agreement on compensation applies to the first plant as well as for any future plants that Michelin might decide to build.

Regarding the right to use Enviro’s patented recycling technology and subsequent compensation, the parties have agreed as follows:

  • That Michelin is entitled to establish its own recycling plants based on Enviro’s technology
  • That Michelin, when establishing such plants, shall 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
  • That the license agreement shall remain in force until 2035
  • That 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 finalise 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 Michelin‘s 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”, says Enviro’s Chairman Alf Blomqvist.

“Reaching a main principles agreement on the content of a Strategic Partnership Agreement was critical for both parties as it sets the course for our common actions in light of our win-win partnership. 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.