Battery News Briefs - from Battery Council International

Battery Briefs from Battery Council International
Vol. 4, No. 2
March 2007

Around the Battery Industry
EnerSys to Purchase Bulgarian Battery Company
EnerSys of Reading, Pennsylvania, has reached an agreement to acquire a majority interest in Energia AD, an industrial battery producer in Targovishte, Bulgaria. The total purchase price is expected to be approximately Euro 13 million (about $17 million) and will be financed using existing EnerSys credit facilities.
Completion of the transaction, expected for April, is subject to the customary closing conditions, including the receipt of government consents. EnerSys also has completed the acquisition of the industrial lead-acid battery business of the Swiss company, Leclanche SA.Source: ABT, February 2007

Firefly Joins the EDTA, Receives Funding
Firefly Energy Inc. of Peoria, Illinois, has joined the Electric Drive Transportation Association (EDTA), a Washington, D.C.- based trade association that represents battery, hybrid and fuel cell electric drive technologies.
The company recently received a $3.25 million appropriation in the fiscal year 2007 Defense Bill signed by U.S. President Bush. "The funds will enable researchers at Firefly Energy to continue developing prototypes of its 3D Advanced Battery Technology," says U.S. Congressman Ray LaHood (R-IL). "The batteries eventually will power a variety of military equipment, giving U.S troops the technological advantage they need to accomplish their missions while minimizing casualties."
Firefly Energy's CEO Edward F. Williams says that the company's progress in developing its graphite foam lead-acid battery for commercial and military applications puts it on a pace to see the initial manufacturing of these batteries by late 2007.Source: ABT, December 2006

Exide Appoints Jennings to Board of Directors
Paul W. Jennings has been appointed to the board of directors of Exide Technologies. He is president and chief executive officer of Innospec Inc., an international specialty chemicals company headquartered in England.Source: ABT, December 2006

EaglePicher Battery Approved by the U.S. Army
The U.S. Army Communications Electronics Life Cycle Material Command (C-E LCMC) has approved EaglePicher Technologies' design of the BA-5590 battery with a built-in, state-of-charge indicator (SOCI). During the first quarter, 40,000 batteries will be delivered to the U.S. Department of Defense.Source: ABT, February 2007

East Penn Expands
East Penn Manufacturing Co. of Lyon Station, Pennsylvania, will add 500 jobs over three years as part of a $130 million expansion, reports the Morning Call. The company plans to build a 600,000-square-foot plant and distribution center at its 490-acre Lyon Station site. East Penn has begun to clear the site for the plant, which is scheduled to open at the end of 2008. It will receive $21.4 million in loans and grants from Pennsylvania state Department of Community and Economic Development.
Founded in 1946, the company has five plants in Lyon Station, including three manufacturing sites for automotive batteries. It also operates a plant in Kutztown and recently opened one in Iowa (Voltmaster, Inc.), its first outside Berks County.Source: ABT, February 2007

East Penn Receives Corporate Certification
East Penn Manufacturing Corp. has completed certification of the company's environmental management system to the requirements of ISO 14001:2004.
In 2002, an audit was conducted which resulted in East Penn's Wire and Cable Division receiving environmental management system certification. Recently, the company's manufacturing site and distribution facility were audited by National Quality Assurance for compliance to the ISO 14001:2004 standard. East Penn is one of the select few companies in the world to accomplish these certification requirement.Source: ABT, December 2006

East Penn Introduces Front Access High Rate Battery
East Penn Manufacturing recently announced the release of the Unigy HR5500ET High Rate battery with a 10-year design life for UPS service.
Unigy High Rate batteries use the latest AGM (Absorbed Glass Mat) technology to lower internal resistance for superior high-rate, short-term discharges delivering critical power when needed.
Specifically designed for high-rate uninterruptible power supplies (UPS), these batteries are housed in reinforced cases constructed of polypropylene or flame-retardant plastic (rated 28 LOI), 12-volt monoblocks. Source: East Penn News Release, 1/05/07

Delphi Agrees to Sell Interiors Business
Auto parts supplier Delphi Corp. recently announced it has signed a nonbinding agreement to sell its interiors and closures business to a private holding company owned by billionaire Ira Rennert. The sale to New York-based The Renco Group Inc. is subject to bankruptcy court approval. Terms of the deal were to remain confidential until a master sale and purchase agreement has been negotiated, signed and filed with the court. The interiors and closures business, which Troy, Mich.-based Delphi says has annual revenue of about $1.3 billion, includes products such as instrument panels, consoles, door modules and latch systems.
Delphi, a former subsidiary of General Motors Corp., has been operating under bankruptcy protection since October 2005. It expects to emerge from bankruptcy protection in the first half of this year. Delphi has said it plans to close or sell 21 of its 29 U.S. plants and focus on operating eight U.S. plants that make electronics, safety systems, heating and air conditioning systems and some mechanical parts. The plants scheduled for sale or closure make steering systems, brakes, dashboards and other parts that Delphi no longer considers part of its core business. Source: AFX News Limited

JCI Names New President of their Battery Division
Alex Molinaroli has been named the new President of JCI's Battery Division, replacing Gregg Sherrill. Alex's previous role was with JCI's Controls Group and has enjoyed a long career with JCI.Source: JCI, 1/15/07

EU Seeks Public Comments on Possible Change in Metric-Only Labeling Law
Responding to complaints from European and U.S. businesses, the European Commission announced recently that it was opening a formal public consultation on whether to change a directive set to go into effect on January 1, 2010, requiring only metric measurements on products and marketing materials circulated in the 27-member EU trade community. The requirement (Directive 80/181/EEC “Metric Directive”) would apply to product labels, marketing literature, technical manuals, catalogs and advertising, including advertising on the Internet. Current EU legislation allows for the use of dual measurements (i.e., metric and inches/pounds).If the requirement goes into effect, the EU legislation would be inconsistent with U.S. law, as the Fair Packaging and Labeling Act (FPLA) mandates that labels on many consumer products include both metric and U.S. customary units. U.S. and European companies selling products on both sides of the Atlantic, then, would have to create different labels and product literature for each market. The National Association of Manufacturers (NAM) has lobbied the European Commission to consider changing the metric-only labeling requirement and encouraged European industry organizations to get involved as well. The Commission’s decision to consider a change in the Metric Directive is a positive step. Source: NAM World Trade Bulletin, 1/26/07

Trade Package Signed Into Law By President Bush
On December 20, 2006, President Bush signed into law H.R. 6111, the Tax Relief and Health Care Act of 2006. The bill included an extension of the Andean Trade Preferences Act (ATPA) and the Generalized System of Preferences (GSP), which were both set to expire at the end of last year. The package granted Permanent Normal Trade Relations (PNTR) to Vietnam, paving the way for U.S. companies to enjoy the benefits negotiated by the United States with that country to join the World Trade Organization (WTO). The bill also includes a large portion of the Miscellaneous Tariff Bill (MTB), which temporarily suspends or reduces the duties on imports and products not made in the United States. A House Ways & Means Committee summary of the trade provisions can be found at: http://waysandmeans.house.gov/media/pdf/trade/hr6406summary.pdf.Source: NAM World Trade Bulletin, 1/12/07

WTO at 150
On January 11th Vietnam became the 150th member of the World Trade Organization. Details on Vietnam’s accession may be found on the WTO’s website at:http://www.wto.org/english/thewto_e/acc_e/a1_vietnam_e.htm members will find the result of Vietnam’s accession being a general lowering of Vietnam’s tariffs and a wide variety of other market-opening steps, as well as adherence to the WTO’s set of global rules. U.S government agencies are prepared to provide additional information or to discuss concerns that members have. A good person with whom to start is Hong-Phong Pho, the Commerce Department’s expert on Vietnam, at 202-482-3877.Source: NAM World Trade Bulletin, 1/12/07

EU Expands to 27
Bulgaria and Romania became the 26th and 27th members of the European Union (EU) on January 1st. U.S. exports to the two countries together total about $1 billion annually. Their tariff schedules became fully aligned with the EU’s Common External Tariff (CXT) on that date. The CXT is generally lower than either country’s previous national tariff schedule, meaning that most manufacturers will now face lower barriers in selling to the two countries. It is important to note that some CXT tariffs may be higher than the earlier national tariffs for either Bulgaria or Romania, and some may therefore see higher tariffs. Nonetheless, World Trade Organization (WTO) rules provide for compensation in those cases, and USTR’s European office will be holding consultations with the EU on any such cases. Contact USTR’s Europe office at 202-395-4620 for additional information. Source: NAM World Trade Bulletin, 1/12/07

These articles appear in NAM"s Trade Bulletin which can be found in its entirety in the members only section of BCI's website at www.batterycouncil.org.

China in the News
Doing Business In China
According to the Automotive Aftermarket Industry Association (AAIA) more than 78% of AAIA member companies who responded to the survey are currently selling products and/or services to the Chinese market. Of those who are not currently selling in China or Asia, 58% indicated that they are planning to.

A Look at the Asian Aftermarket
The aftercare and accessories market for all of China increased by roughly 30% during the years 2000 to 2003. The market is forecast to grow by more than 20 percent in 2006.
The automotive aftermarket in China is estimated to have been worth just over $12 billion in 2005, which is about half the entire automotive parts and component market.
Average spending per vehicle is up 75% since 2000 around $357/annum.
There are almost 300,000 vehicle repair shops and service centers in China, a figure expected to grow at 10-15% a year for the next five years.
By 2010, the passenger vehicle market is expected to comprise 6 to 7.5 million vehicles per year. China is expected to be the world's largest market for vehicle sales by the year 2015.Source: Aftermarket Insider , December 2006/January 2007

NAM Working Group Stresses Need to Track EU and China Chemicals Restrictions Members need to assess carefully how new European Union and China restrictions on chemicals will affect their ability to market products in these two important markets. In December 2006, the European Union approved the REACH regulation, which sets costly new requirements on the registration, evaluation and authorization of potentially hazardous chemicals. REACH will have a far-reaching impact not only on chemical producers but also companies that use chemicals in their manufacturing process or make products that release chemical substances. During the working group discussion with experts, it was noted that, while REACH does not cover “final articles,” it may cover many articles that ”release” chemicals during normal use, such as textiles and packaging. Products that “release” chemicals as a result of inadvertent breakage may also be covered. Until further clarification is received, all manufacturers that make products containing potentially hazardous substances should take precautions and consider the implications of REACH for their operations. The regulation takes effect on July 1, 2007, when the “pre-registration” phase begins. For more information, see the European Commission brief at http://ec.europa.eu/enterprise/reach/docs/reach/reach_in_brief_council_comm_pos_060905.pdf.
The China “RoHS” regulation, which restricts use of lead and other hazardous substances in electrical products and sets new packaging, labeling and testing requirements, also merits close attention. The regulation, based in part on the EU Restriction on Hazardous Substances in Electrical and Electronic Components (RoHS), took effect on March 1, 2007 with marking and labeling requirements. It was clarified that used goods and warranty replacement parts would not be covered by the regulation. Many questions remain, however, on how the regulation will be implemented, including how differences in interpretation of what products are covered would be resolved. Given the uncertainties, the working group recommended that in discussions on “RoHS” the Commerce Department request that the Chinese Ministry for Information Industry (MII) establish a process for appealing MII decisions and settling disputes. The latest MII answers to frequently asked questions on “RoHS” implementation can be found at http://www.mii.gov.cn/art/2006/12/01/art_1221_27258.html.Source: NAM World Trade Bulletin, 1/26/07

Distribution Updates
Trends to Watch in Battery Wholesale Distribution
Private-label products, demand-driven channels and Internet-connected customers are some of the emerging trends in wholesale distribution identified by Pembroke Consulting President and NAW Institute for Distribution Excellence Fellow Adam J. Fein, Ph.D. Source: Modern Distribution Management, 2/10/07

Move the Distributor-Supplier Relationship from Dysfunctional to Effective
It takes a long time to develop good distributor-supplier relationships, but it only takes a short time to destroy them. Working at Cross-Purposes examines what drives these relationships, how often they go bad and why. Both partners can learn to avoid the economic and other consequences of a relationship turning sour by correcting emerging problems before they become critical. Source:NAW, 2007

RBRC Reports 2006 Battery Collection Numbers
The non-profit Rechargeable Battery Recycling Corporation (RBRC) released its year-end data for 2006, reporting the collection of over 5.6 million pounds of rechargeable batteries in the United States and Canada, through it Call2Recycle program.
The organization's successful year can be attributed in part to the increase in participation among national retailers, businesses, communities and licensee recycling programs. In 2006, retailer participation increased 18 percent, while community and public agency participation by businesses had the greatest increase of 48 percent.Source: American Recycler, February 2007
Scrap Metals MarketWatch
American Recycler (AR), a trade publication publishes monthly a "Scrap Metals MarketWatch" and provides the value of scrap metal in various zones throughout the US. For the month of February, according to AR, auto batteries per pound were worth:

Auto Batteries By Comparison, with #2 Copper is worth...
Zone 1 - West
Batteries = .05/lb
Copper = $2.53/lb
Zone 2 - Central Northwest
Batteries = .06/lb
Copper = $2.35/lb
Zone 3 - Southwest
Batteries = .07/lb
Copper = $2.45
Zone 4 - Midwest & Northeast
Batteries = .07/lb
Copper = $2.43/lb
Zone 5 - Southeast
Batteries = .11/lb
Copper = $2.25/lb
*All prices are expressed in USD. Source: American Recycler, February 2007
The information is provided as a reader service only and believed to be reliable and represent approximate pricing based on information obtained by AR. Prices may not be consistent with a futures market.

Battery Developers are White-Hot Commodities in Detroit
The new rock stars of the auto industry aren't producing the quickest sports coupes or the sleekest sedans according to an article in USA Today. Companies cited in the article include Cobasys, located in this Detroit suburb. The company makes batteries that power today's gas-electric hybrid vehicles, such as the Saturn Vue. Cobasys' focus has been on making the nickel-metal hydride batteries that are the mainstay of most hybrids. A123Systems, Johnson Controls and Saft Advanced Power Solutions were also cited developing lithium-ion battery power for the next-generation.Source: USA Today, 1/25/07

Practice Lean Warehousing and Eliminate Wasted Space and Time
This is the first book to apply the "lean manufacturing theory" specifically to the world of warehousing. Lean Warehousing discusses the "why of getting lean" and shows you how to eliminate wasted space and time in a systematic approach, so you have a leaner warehouse operation tomorrow than you do today. To order this publication click here.Source: NAW, 2007

Hybrid Electric Vehicle Battery Market Charged for Rapid Growth - But Which Battery?
The market for advanced Hybrid Electric Vehicle (HEV) batteries will double from approximately $600 million this year to $1.2 billion by 2009 and is expected to top $2.0 billion by 2012, according to a new study, "The 2007 Advanced Automotive Battery Industry Report", to be published in April 2007.

Hybrid Electric Vehicles (HEVs) combine an internal combustion engine with an electric motor and a battery in various arrangements. They are now finding commercial acceptance as an effective means of raising fuel efficiency without sacrificing vehicle performance, thus combating global warming, pollution, and dependence on the supply of fossil fuels. A key to identifying the type of HEV that will continue to expand the market is the availability of an affordable, long-life battery. In this regard the study concludes that in the foreseeable future, the HEV market will predominantly continue to consist of ‘charged-on-board’ designs. ‘Plug-in’ hybrids, which are charged from an electrical outlet, are unlikely to gain notable market share, in spite of wide publicity about them in the press—due to the lack of a suitable and affordable battery for this architecture.

The study analyzes the battery requirements set by all major automakers for HEVs. According to Advanced Automotive Batteries, Nickel Metal Hydride (NiMH) is the incumbent technology for these applications due to its proven longevity under heavy usage. However, it has performance limitations at high and low temperatures, and at the OEM cost of $500 to $2,000 per HEV battery pack NiMH batteries are barely affordable to the automakers. Li-ion batteries—popular in portable equipment communication devices ranging from cell phones to laptop computers—are under intense development and testing by all major automakers for their potential promise in HEV applications. The study finds that recent reliability problems with Li-ion batteries in portable devices are delaying the entry of this higher- power battery chemistry into the HEV market. However, following extensive system verification tests, Li-ion batteries are still expected to enter the market in 2009, achieve a market penetration rate of 15% by 2012, and grow thereafter.

The study also discusses the plans of the major automakers and their battery suppliers for the commercialization of HEVs and HEV batteries. Toyota, Honda, and Ford, are leading the commercialization of HEVs, but most other major automakers expect to offer Hybrid Electric Vehicles in commercial volume by 2010. Two Japanese battery producers, Panasonic EV Energy and Sanyo, share over 90% of the HEV battery market (currently essentially all NiMH). Both companies are also developing Li-ion battery products for this market where over a dozen additional battery manufacturers from Japan, Korea, and the U.S. are intending to compete. Market leader Panasonic EV Energy, a joint venture between Toyota and Panasonic Batteries, will continue to enjoy over 60% market share for at least three more years while the other developers are establishing their production capabilities.

The 2007 Advanced Automotive Battery Industry Report also points out that several automotive tier- one electrical system suppliers, including European giants Robert Bosch and Continental, U.S.-based Delphi and Cobasys, and Japanese giants Hitachi and Denso are working on integrating battery modules into a total energy-storage system, an area where the average battery manufacturer lacks experience.

To produce this study, Dr. Anderman, President of Advanced Automotive Batteries, a consulting firm that carries out technology and market assessments and organizes an annual industry conference, conducted over 35 site interviews with key players in the industry, including all major automakers, automotive system suppliers, and battery producers on three continents. For more information and to purchase the report, contact Advanced Automotive Batteries at (530) 692- 0140, or visit the AAB website, www.advancedautobat.com.Source: AAB, 2/07/07