On May 16, Weichai Power entered into a strategic cooperation agreement with the world leading SOFC supplier Ceres Power, UK in Shandong. Under the agreement, Weichai Power will invest over 40 million pounds to subscribe part of the newly-issued shares of Ceres Power, and its shareholding ratio will reach 20 percent after the subscription. Besides, Weichai Power will join hands with Ceres Power to establish a joint venture in Weifang, China, to carry out all-round cooperation in the SOFC field.
Weichai Power undertook the major project of new energy industrial park construction in the driving force conversion of Shandong. New energy is the future development direction of Weichai Power in its 2020-2030 strategy. Weichai Power will invest 50 billion yuan to construct a new energy power industrial park, and build a new energy power industry chain covering vehicles, machines, powertrain systems, batteries and motors, to achieve the goal of leading global industrial development.
Concluding a strategic cooperation agreement with Ceres Power marks a substantial step of Weichai Power in driving force conversion, which will help Weichai Power build a new energy powertrain system in Shandong, provide first-class new energy power solutions for domestic commercial vehicle manufacturers, promote the industrial restructuring of the company and lead in new energy technology.
Under the agreement, Weichai will hold a 20% stake in Ceres Power by investing over 40 million pounds to subscribe part of the shares issued by Ceres Power. Besides, the two sides will jointly establish a joint venture in Weifang, China before 2020, to promote the commercialization of SOFC technology in China. Ceres Power will exclusively authorize the joint venture to use SteelCell? technology, manufacture and sell fuel cell systems, electric piles and cells for buses, trucks and the specific power generation market. To promote industrialization, Weichai Power and Ceres Power will jointly develop 30kW SteelCell? CNG fuel cell for extended range systems of electric buses in first-stage cooperation. Technical validation is expected to be completed in the first half of 2019.
Solid Oxide Fuel Cell (SOFC), a new generation fuel cell technology, has potential advantages such as low cost, high efficiency and fuel flexibility, and can draw energy from natural gas, gasoline, diesel, renewable methane or hydrogen. Through the strategic cooperation, Weichai Power will integrate the resource advantage of the Chinese market with the technical advantage of Ceres Power, to promote the commercialization of SOFC technology in China.
With the mission of constructing beautiful China and promoting the driving force conversion of Shandong, Weichai Power, a key equipment manufacturer in China, has the responsibility and confidence to bear the flag of driving force conversion, attract the world's most important resources, most advanced technologies and best talents to Shandong, and play a leading role in the driving force conversion of Shandong, said Tan Xuguang, Chairman of Weichai Power. Ceres Power is a global SOFC leader, the conclusion of the strategic cooperation agreement is important deployment of Weichai Power in its 2020-2030 strategy, as well as its important move in the layout of new energy industrial park. We expect to work with Ceres Power to inject new power into the development of China's new energy industry.
The conclusion of the strategic cooperation agreement with Weichai Power marks a milestone of Ceres Power, we are pleased to forge a partnership with Weichai Power, and the solid customer foundation of Weichai Power in China has created an opportunity for our SteelCell? technology to access the Chinese market, especially the Chinese commercial vehicle market, said Phil Caldwell, CEO of Ceres Power. Besides, Weichai Power has successful experience in international cooperation. We have full confidence in and expectation for the future cooperation between the two sides.
Ceres Power is a company listed on AIM of the London Stock Exchange, as well as a new-generation low-cost fuel cell technology leader. Ceres Power's unique SteelCell? technology originated from Imperial College London, has been researched and developed for nearly 16 years, owns about 50 patents, and has advantages such as good robustness, high power density and low manufacturing cost. Currently Ceres Power's SteelCell? products are applied in four fields: housing, data center, commercial power generation and automobile.
As one of China's strongest automobile and equipment manufacturing groups, Weichai Power has several business sectors, including powertrain, vehicles, intelligent logistics and automotive parts. It has mapped out the 2020-2030 strategy: its traditional business will exceed the world top level by 2020 and its new energy business will lead global industrial development by 2030.