Marking its first million-dollar foray overseas, SRJ Technologies Group PLC (ASX:SRJ) has entered into a distribution partnership with Malaysia-based EFTECH International Sdn Bhd for the company’s products and services to be marketed in the Southeast Asian nation.
The Exclusive Licence Agreement (ELA), also SRJ’s first geographic exclusivity licence deal for its patented technology, is for three years, with the option for a further two three-year options/extensions.
Under the ELA, EFTECH will acquire SRJ’s BoltEx® product worth A$874,000 for rent or sale to its customers in Malaysia, and thereafter, is required to maintain a minimum inventory level of A$656,000.
Million-dollar revenue
The EFTECH deal is on top of the previously-announced three-year contract to supply BoltEx to another group of Malaysian firms, collectively called PTTEP HK Offshore, PTTEP Sabah Oil and PTTEP Sarawak Oil.
All orders from PTTEP will now fall under EFTECH's ELA, which has submitted an initial purchase order for A$224,000 on behalf of the group.
As a result, the cumulative revenue to be received from EFTECH in the coming weeks is A$1.1 million.
Global commitment
“We are delighted to partner with EFTECH to bring our innovative product and service solutions to Malaysia,” SRJ chief executive officer Alexander Wood said.
“This agreement is a testament to our commitment to expanding our global presence and delivering value to customers in new markets.
“With this key relationship, we will look to further solidify commercial cooperation for SRJ products and services in this key territory.
“We believe that EFTECH’s extensive market knowledge and strong local presence will drive our success in Malaysia.”
Healthy pipeline
EFTECH has a strong history and client base in Malaysia’s oil and gas industry, including providing process and pipeline services, asset integrity services and bolt exchange opportunities such as hot-bolting and cold-bolting campaigns.
The Malaysian firm has a ‘first rights option’ under the deal to represent SRJ exclusively in Singapore, Thailand, Philippines, Indonesia and Vietnam for a minimum licensing fee of $1.5 million. This right must be exercised within six months.
“Alongside previously-announced geographic sales in key energy markets, this agreement is of particular significance as it displays the increasing commercial traction achieved through SRJ’s refined business model focussing on key partnerships,” Wood said.
“SRJ will look to build on such licensing agreements in other key territories.”