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PATENTED RECHARGEABLE ALKALINE MANGANESE CELLS PROJECT  

OVERVIEW OF THE RAM™ TECHNOLOGY

COLLABORATOR’s RAM™ Technology was developed under the guidance of Dr. Karl Kordesch, an internationally recognized electrochemist who is Professor Emeritus at the Technical University of Graz, Austria and a founding shareholder of the Company.

The RAM™ Technology has been developed by COLLABORATOR to maximize commercial viability while minimizing environmental impact.  Compared with other battery systems, RAM™ batteries provide users with a low cost, environmentally responsible product, completely interchangeable with today’s household batteries.

RAM™ batteries contain essentially no hazardous toxic substances.  In 1992, COLLABORATOR, supported by grant initiatives of the Canadian Ministry of the Environment, successfully eliminated mercury from RAM™ batteries, making it one of the first mercury free alkaline battery systems in the world.  RAM™ batteries also do not include other toxins such as cadmium, which represents a significant environmental hazard.  This, combined with the rechargeable nature of the RAM™ batteries, which results in less total waste than with disposable batteries, makes the RAM™ Technology one of the most environmentally responsible battery systems in the world.

RAM™ batteries also offer the advantages of rechargeability, long shelf life, high initial capacity and stability in high temperature conditions.

RAM™ batteries benefit from very low self-discharge rates, to a degree unmatched by any other rechargeable battery on the market.  All other rechargeable technologies exhibit high self-discharge rates, particularly at higher temperatures.  Only RAM™ batteries are capable of keeping their charge, even at elevated temperatures of up to 65°C.  Also, RAM™ batteries do not exhibit any problems with “memory effect” and will perform better in the case of shallow discharge and frequent recharge.

In addition, RAM™ batteries are uniquely suitable for solar charging applications, particularly in developing countries where sunlight is abundant and connection to electrical power a scarce commodity.  All competitive rechargeable technologies exhibit self-discharge characteristics at an accelerated rate in high temperatures, thereby reducing their solar charging performance.

COLLABORATOR uses an industry proven process to manufacture RAM™ batteries which is more efficient than the process used to manufacture other rechargeable batteries.  For that reason, RAM™ batteries can be produced at a lower per unit cost than NiCad, NiMH or Li-Ion batteries.  The raw materials required for RAM™ batteries are readily available from a variety of sources internationally.

A summary of the performance characteristics and typical data for the RAM™ Technology as compared to other disposable and rechargeable battery chemistries is as follows.

Compared with disposable batteries, RAM™  batteries offer the following advantages:

Compared with other rechargeable battery chemistries such as NiCad, NiMH or Li-Ion, RAM™ batteries offer the following advantages:

Use and Appeal of RAM™ Batteries

RAM™ batteries are ideally suited for use in any battery operated device that uses disposable alkaline or zinc carbon batteries and any low drain device that currently uses other rechargeable batteries.  The batteries can be used in all of the following devices: flashlights, radios, television, stereo and other remote controls, cassette players, portable compact disk players, personal digital assistants (“PDAs”), wireless communications devices, electronic and video games, portable phones, notebooks, portable LCD televisions, portable stereos, hand-held electronic games, camcorders, cameras and many other devices.

International Market Opportunity

In 1997 (the most recent year for which reliable figures are available), worldwide sales of small format batteries (both disposable and rechargeable segments) were approximately U.S.$23.8 billion.  The Company estimates that sales could grow to approximately U.S.$35.9 billion by 2002.  The disposable market includes all alkaline and zinc carbon batteries, while the rechargeable market includes all NiCad, NiMH, Li-Ion and RAM™ batteries.

The table below illustrates, on a segmented basis, sales of small batteries in 1997 together with the Company’s estimate of potential growth in the size of the market.

  The Company believes that the most promising opportunity for the RAM™ Technology is through existing consumers switching from disposable batteries to RAM™ batteries.  In sever consumer use conditions, the Company estimates that one RAM™ battery can replace approximately 10 disposable alkaline or 30 disposable zinc carbon batteries.  Since RAM™ batteries can power all of the devices currently using these types of disposable batteries, consumers who switch to RAM™ batteries should realize significant savings on their total battery expenditures.

  The Company is also focused on the rechargeable battery market as a significant growth area for the RAM™ Technology.  The Company estimates that the international rechargeable battery segment represents only approximately 6% of the total battery segment based on the number of units sold.  Of the rechargeable battery segment, the Company estimates that approximately 65% of the market share is currently held by NiCad batteries, although this share is expected to decrease over the next few years as consumers and OEMs shift to other rechargeable technologies, due in part to the environmental concerns about NiCad batteries.  RAM™ batteries are fully interchangeable with NiCad batteries, but RAM™ batteries are currently only available in four of the eight sizes in which NiCad batteries are available.  In addition, the RAM™ Technology cannot power certain end use applications requiring NiMH or Li-Ion.

  The Company estimates that overall the global demand for small format batteries is expected to grow by nearly 8% annually from 2002 to 2007.  Rechargeable batteries used in high-drain portable electronics will post gains in industrialized countries and rising personal and business incomes will broaden the market for battery-powered products in the developing world.  In addition, the increased use of hand held electronic devices, such as PDAs, that require the frequent changing of batteries has spurred the demand for batteries overall.  The need to change batteries on a regular basis has increased the overall appeal of rechargeable batteries and has thus fueled the growth in its demand.

Geographical Market Development

The table below sets out certain information for sales of disposable and rechargeable batteries, segmented by geographic region, along with the Company’s estimates of sales growth in these segments. 

India’s potential

As may be expected, penetration of alkaline technology is greater in more advanced countries:-

It is obvious that India has the potential to develop a huge market for alkaline technology as its low per capita battery consumption and low penetration of alkaline improves. The developed countries, because of higher personal incomes, have switched substantially to the more expensive, but longer lasting, alkaline cells. Developing countries are bound to follow suit. 

If alkaline cells could be made to last longer through recharging so that, for the same price, more energy would be available from the same cell, this would immediately strike a chord with the economy-conscious population of developing countries. This is the business opportunity that this proposal  attempts to exploit. 

The present Indian market is confined largely to ZnC cells as these were the only ones made here so far. More modern cells have been coming in through imports. Only recently have alkaline single-use cells started being made in India. In 1996 the quantity of ZnC produced was 1800 million and growing at about 10% per year. 

New Technology  

UNIQUE  PATENTED  TECHNOLOGY OF RECHARGEABLE  ALKALINE  MANGANESE  (RAM) CELLS BRING THE BEST OF BOTH WORLDS TOGETHER to attack  the  market on both sides. Being Alkaline, they perform far better in shelf-life and operating life compared to Zn-C. In addition, they can be recharged many times thus giving long life advantage  over the present Discardable Alkaline Cells. For same performance, RAM cells' operating life-time cost turns out to be much less than of  DAC and  even farther less  than  Zn-C.   In  several practical  tests with medium drain portable equipments,  one  RAM cell with 50 recharges gave the same operating life as replacing as many as 17 DAC or 50 ZnC cells in the same application; and there was still more life left in the RAM cell.        

  RAM  cells  also  throw a challenge to  NiCd  at  medium  current drains.   Due to its 1.2 volts,  NiCd needs 5 costly cells for every 4 low-cost RAM cells.   While RAM shelf life is 5 years, NiCad self-discharges at 1%  per day  at  30 Centigrade and 3% per day at 45 Centigrade.  On  each  operation discharge, RAM provides 3 times the hours of NiCad. RAM yields more energy per size and weight than NiCad making it  more valuable for portable and pocketable equipments.

  Rechargeable Alkaline Cells (RAM) thus overcome all the shortcomings of  the cells  mentioned above and thus address the market in  three-fold directions worldwide :-       

·         Penetrate the market of fast obsoleting Zn-C cells

·         Capture market of single use Alkaline cells

·         Replace rechargeable NiCd cells in many applications

  This new technology results in a very cost-effective product  which can be sold at a small premium over DAC.  The technology is  already  licensed in Korea, Canada, USA. Products  are  being  designed-in  by  dozens  of well known OEM  in  these  countries.

  Turnkey  package  of  RAM technology  can  be  arranged  covering know-how,  production   line,   technology,   training,   installation and commissioning. Depending on capacity and product mix,  the package cost would vary.  For example, under Indian conditions it would be appropriate to install one AA and one D type line to begin with.  

MANUFACTURING EQUIPMENT  

While COLLABORATOR sells high quality, state of the art turnkey manufacturing equipment for the production of RAM™, it is worth noting that since the construction of RAM™ cells is similar to that of primary alkaline cells (PAM), it is possible that existing equipment designed for producing PAM product could be converted to enable the manufacture of RAM™.  An complete review and assessment would have to be completed to determine the feasibility of converting PAM equipment.

  Similarly, COLLABORATOR's RAM™  manufacturing equipment is capable of producing lower cost PAM product, should that additional capability be attractive to a potential licensee.

  Sold by COLLABORATOR to licensees only, our high precision turnkey systems are designed for production of RAM™ cells (AA and AAA sizes) using the most modern manufacturing systems to reduce generation of waste materials, to minimize safety hazards, to eliminate any negative environmental effects, to provide a high quality, rechargeable cell.

              The systems offered, through a unique preferred supplier arrangement, are highly automated to ensure good product quality.  Some systems, such as automatic trayloading and unloading are included to achieve high labour efficiencies and other high precision systems, such as automatic metering, are designed to provide a rechargeable product with high quality standards.  System controls provided represent state-of-the-art computerized process, machine controls and management reporting systems.

  A typical turnkey system comprises the following systems: 

System Capacities  

                The chemical process systems (Anode, Cathode and Electrolyte Process Systems) are designed to support up to five assembly lines. 

                The AA and AAA assembly, sub assembly, parts making and cell finishing systems are designed for a nominal speed of approximately 200 cells per minute. 

                The required capacity can be obtained by installing a sufficient number of lines. Please note that a cell line with a nominal speed of 200 cells per minute provides a capacity of approximately 80 million cells per year on a 3 shift basis. 

                The plant layout, the floor space required etc., are of course dependent on the number of different cell types to be produced, the total production output type of packaging operations, manufacturing of parts in house, and other considerations.

  Battery Plant  

                A facility with approximately 35,000 Sq. Ft. (not including packaging or warehousing operations) specially prepared with climate and environmental controls would be sufficient to support the  including installation of a turnkey AA plus AAA line addition.  

Skills Required  

                Manufacturing of RAM™ cells requires good technical skills due to the relatively sophisticated chemistry and processing and the precision required of the parts and the assembly and sub assembly operations.

                A manpower summary of technical staff recommended for the production of RAM™ cells can be provided as part of a quotation. 

Packaging And Warehousing

                Due to the wide variety of local packaging requirements, no packaging systems are typically included with COLLABORATOR’s turnkey manufacturing systems.

Equipment Warranties  

                The equipment carries a warranty of 12 months following installation and start up of the system at the purchaser's facilities. 

                Under this warranty, COLLABORATOR will replace at no charge any defective parts.  Parts subject to wear, such as compactor rolls, pellet press dies, crimping and beading tools, are excluded from warranty coverage. The precise terms of the warranty will be provided in a quotation.

Compliance With Regulations  

                COLLABORATOR will use its best efforts to ensure that the system will meet applicable regulations regarding safety, materials handling and waste disposal. However, the Purchaser will be responsible for ensuring that the system complies with all applicable local regulations and other standards, including those relating to the machine safety, electrical codes, materials handling and environmental matters. 

Delivery  

                Delivery is estimated to be 18-24 months following signing of a purchase agreement. The delivery time depends on our order schedule and is subject to confirmation on receipt of order.  Note: Delivery does not include 8 week period for system installation at the licensees facility. 

For purposes of evaluating the RAM™ business opportunity, however, a typical turnkey system including all systems to support the manufacturing of AA and AAA RAM™ cells would be in the range of US$15 million.

PRODUCTION OF C AND D CONSUMER FORMATS  

                While it is possible to apply to C and D size cells the same manufacturing processes as are employed on the AA and AAA production equipment,  to date COLLABORATOR has not yet manufactured or sold production equipment dedicated to C and D sizes.  However, it is possible to utilize overcapacity of AA production for the production of D sizes.  Similarly, it is possible to utilize AAA overcapacity in the same fashion to produce C size cells.  

Instead of manufacturing regular, conventional RAM™ D cells, the possibility exists to fabricate a RAM™ D cell incorporating 4 AA RAM™ cells in a D size container.  This approach has the advantage that one AA line can produce the “raw cells” for the RAM™ D cell, thereby achieving better equipment utilization on the AA line, and at the same time no investment into regular RAM™ D manufacturing equipment would be required.   Additional equipment that would be required is assembly equipment for these Bundle-D cells.  

A Bundle-D cell would actually perform better than regular D cells at higher drain rates of approx. 500 mA and more.  The reason for this is the fact that the AA cathode is a more efficient electrode due to its thinner electrode thickness compared to regular D cell electrodes.  In addition, the parallel connection of the 4 cells lowers the internal resistance of the Bundle-D cell, which results in better high rate performance as well.  COLLABORATOR prepared recently such RAM™ Bundle-D cell prototypes for the Austrian Military for evaluation purposes.  These prototypes had also an electronic circuit included to avoid deep voltage reversal on discharge in series connection (reversal diode), and provide for current overflow on series charging.  This became possible, because there is some room left, when 4 AA cells are bundled together.  The option of providing a built-in reversal protection diode would be a definite advantage in applications with more than 4 cells in series.  A performance comparison was conducted of a RAM™ Bundle-D cell with regular Renewal RAM™ D cells and average primary alkaline cells on a few IEC test loads.  Cells for this comparison were manufactured in 1996.  

Bundle-D cells show a better performance than conventional RAM™ D cells, and perform well compared to primary alkaline cells.  However, on low rate discharges a primary alkaline cell will have significant more capacity on first discharge.  But then again, a primary cell is not rechargeable and many primary cells can be replaced over the cycle life of RAM™ cells.  The higher the drain rate, the better RAM™ Bundle-D cells will perform.  At higher drain rates, RAM™ Bundle-D cells may even outperform primary alkaline cells! 

The material cost of such a RAM™ Bundle-D cell would be slightly higher than the regular construction.  However, the production component of cost may well justify this type of cell. 

RAM™ PROCESSING COSTS (ESTIMATED)  

The following table estimates the material and other processing costs for production of RAM™ cells.  Due to the confidential nature of the components used, classified proprietary materials are not listed. 

Such a project could be designed with the following parameters:- 

If properly managed and marketed, the project can show net positive profit from year 2 and the pay back period could be 3-4 years.  If there is serious interest in your group, please contact us at the earliest with company profile, market objectives, project timing and other details.  We would be happy to serve you further according to your needs.