STOCKHOLM—Scandinavian Enviro Systems and Michelin have finalized the details of a tire recycling strategic partnership, nearly six months later than originally expected.
The two companies disclosed the intended partnership in April—with the aim to finalize a deal in June—for the use of Enviro's technology for recovering waste rubber materials. As part of the deal, Michelin acquired a 20 percent stake in the Swedish company.
Under the terms of the agreement, Michelin now is entitled to establish its own recycling plants based on Enviro's technology.
When establishing such plants, Michelin will pay an upfront lump sum to Enviro with a predetermined, fixed non-recurring amount as well as royalties based on a percentage of the plant's sales.
The license agreement will last until 2035, according to Enviro, which also is entitled to continue establishing recycling plants with other parties.
"Despite the pandemic and the ensuing delays, we have now been able to finalize our agreement regarding a strategic partnership with Michelin," said Enviro chairman Alf Blomqvist.
The agreement was "a very important milestone" for Scandinavian Enviro Systems and a "very significant validation of our technology," Blomqvist said.
"We have managed to reach these main principal 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," he said.
While negotiations were stalled due to COVID-19, Blomqvist said the delay gave more time to Michelin and other international manufacturers to test Enviro's recovered carbon black.
The agreement is subject to a final approval by Enviro's shareholders at an extraordinary general meeting, scheduled for January.