STOCKHOLM—Negotiations between Scandinavian Enviro Systems A.B. and Michelin are proceeding, Thomas Soerensson, CEO of the Swedish tire recycling group, said Aug. 27.
"It is still our understanding that we will be able to make an announcement with more detailed information about the terms of our partnership by the end of October," he said in Enviro's first-half financial report.
Soerensson called Michelin's investment as a shareholder in Enviro and planned strategic partnership as "a major breakthrough, even if certain contractual details still have to be settled."
Under the cooperation deal, Michelin has taken a 20 percent stake in Enviro, which has developed proprietary technology to recover oil, steel and carbon black from end-of-life tires.
Under a letter of intent signed in April, the parties are to expand the area of application for Enviro's pyrolysis technology, jointly build a plant based on the technology and supply arrangement between both parties.
Agreements were to have been finalized by June 30 but, partly due to the COVID-19 pandemic, the deadline was pushed back to the end of October.
Enviro has, thereby, extended the contractual exclusivity for Michelin with respect to collaborating with other tire makers or suppliers until then.
"Because Michelin has this exclusivity, and our focus is presently on our negotiations with them, we have elected to have a lower activity level in regard to other potential collaborations," said Soerensson.
This could potentially lead to one or more of those prospective partners deciding to continue with alternative plans.
Meanwhile, Enviro is continuing its production and technical verification work at its plant in Asensbruk.
Due to previously disclosed investment projects at the plant, second-quarter production levels have been lower than the first three months of the year.
"Our assessment is that we will incrementally ramp up to normal production capacity again during the third or fourth quarter," said Soerensson.
With regard to technology-development, the CEO said the main focus was "on increasing the extraction of oil in our process and finding new areas of application for the oil."