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Batteries/Business 070215
GP  Batteries announced unaudited third quarter results (Dec. 31, 2006) with a fall in revenues. Revenue was approximately  US$131.4 million which was a decrease of 13.7% in comparison to the corresponding quarter last year. Some items listed as reasons for the  reduced revenues  were: a decrease in turnover mainly due to the weak demand for Nickel-metal hydride and Lithium-ion batteries;  a strengthening of the Singapore dollar against the U.S. dollar   with most battery sales in US dollars; and an increase in distribution expenses.   
 (April 2006) China’s battery industry is almost monopolized by foreign-funded companies.  More than 50 percent of the large-scale enterprises are owned by joint venture or wholly owned by foreign enterprises (including HK, Macro, and Taiwan-based enterprises).  Japanese capital takes the lion’s share among foreign capitals in China.  (Information is from “Battery Industry in China, 2005” by Research and Markets.)

Microsoft confirms report that USB “bug” can drain batteries. This  unfixed bug in the USB driver of Windows SP-Service Pack 2 OS, which affects some Intel-based laptop computers,   causes a notebook’s battery to drain faster than usual when there is a device connected to its USB port. The flaw lies  in the ACPI driver of Windows XP SP 2. An easy-to-apply fix is not available.  
 (March 2006) GP Batteries announces results of third quarter ending December 2005.  The turnover for the three months ended on  December  31, 2005 was S$233.7 million (US$143.2 million), an increase of 1.2% over the corresponding quarter last year.  
 (July 2005)Exide has preliminary SEC (Securities and Exchange Commission) inquiry.  The SEC is interested in reviewing Exide’s ability to comply with a fiscal 2005 loan covenant and  a “going concern” qualification  in an audit report filed with a 10-K form  in June 2005.
 (July 2005)Solarbuzz Consultancy Reports, in June,  indicated that its “battery price  surveys typically show one of the smallest moves in product prices of any components in a solar electric functioning system.”  Batteries typically account for approximately 15% of the cost of an installed Solar Energy System.   Lead-acid batteries, most commonly used,  with tubular plates offer  larger capacities than flat plate construction. ( Solarbuzz tracks the battery price environment in relation to solar electricity prices.)   
 (July 2005)Ultralife Batteries, Inc. receives contact from GM to supply back-up batteries for GM’s OnStarR Telematics System.  Two custom-designed non-rechargeable lithium back-up batteries will be used in two of GM’s vehicle platforms.
Microsoft Excel Chart About three-fourths of Energizer’s total global sales are related to batteries and only a quarter are attributed to razors and blades.  Of  all batteries sold, approximately two-thirds are Alkalines.

For the North American battery market, net sales to customers for the first quarter of $395.8 million increased $9.4, or 2 percent, as higher sales volumes were partially offset by unfavorable pricing and product mix.  Lithium and rechargeable batteries continued volume growth in excess of 20 percent, while Energizer Max unit sales increased 3 percent.  Overall pricing and product mix was  unfavorable due to the continuing shift to larger pack sizes, which  sell at lower per unit prices.

In the United States, the retail battery category is defined as household batteries (Alkaline, Carbon-zinc, Lithium and rechargeable) and specialty batteries.  The U.S. retail battery category increased by 4.4 percent in dollars for the 12 weeks ending December 3, 2005 vs the same period last year.  Retail consumption of Energizer’s products increased 9.5 percent in dollars for the same period.  The company’s focus on the performance segment, specifically rechargeables and lithium batteries, resulted in an increase of approximately 1.8 share points compared to the same period in the prior year, bringing Energizer’s share of the retail category to approximately 37.7 percent for the quarter.  

Energizer expects to see benefits from its battery price increase in the future.  However, higher material costs and the continuing shift to larger package sizes are likely to offset at least a portion of any  favorable pricing attained in the near term.    

International net sales for the battery market were $270.5 million, an increase of $9.2 million, or 4 percent, as higher volumes were partially offset by $4.9 million of unfavorable currency impacts and unfavorable pricing and product mix.  Volume increases were primarily in the performance and premium product lines.  Segment profit increased $0.7 million, or 1 percent, as the benefit of higher volumes was nearly offset by unfavorable pricing, higher product costs and unfavorable currency. +
 Wearable battery? What next?
SRI International, a not-for-profit, consulting, research and development organization, has produced a number of innovations for the battery industry. One is a battery produced with printing techniques to provide  small, thin cells which can be printed on a credit card. Another innovation produces fibers for anodes, cathodes and electrolytes which can be woven into cloth or built into a casing. A swallowable battery was developed for a medically ingested remote-controlled camera.

SRI has modified Lithium-ion structures to produce eight to ten times more power than conventional Lithium-ion cells. They have also built small fuel cells which produce 4-5 Watts of power for three hours.

SRI’s technological developments are spun off to independent companies for commercialization.
Silicon Valley/San Jose Business Journal, 09,24,04
 Gillette profit gains 19% in first quarter of 2005.  Total sales of shaving and oral care products as well as batteries rose 17 % to $2.61 billion.  The profit rose to $449 million from $376 million in the year-ago period.  Gillette also announced it plans to raise its Duracell battery prices by 6 or 7 percent.
 On June 13, 2005, GP reported an 8% increase in turnover in all battery sales for the year.  However, operating profit before exceptional items and taxation decreased by 25%.  A net exceptional loss was recorded of  S$18.8 million; this included losses for the Danish Danionics project (S$19.0 million) and compensation, medical and hospital expenses of workers affected in the Cadmium issue in its plants in Huizhou, China (S$6.1 million) as well as its net gain (S$6.3 million) from the re-evaluation of investment properties and investments.   Gross profit margin decreased mainly due to high material prices and keen competeition in the Lithium-ion market as a result of over-supply.  

GP Batteries is closing its 9-Volt Danish plant and consolidating manufacturing into the Malaysian factory.  Nickel-metal hydride operations will shift  from Malaysia to China.    

GP Industries owns 49.1% of GP Batteries.+   
 EnerSys acquires motive power battery business from FIAMM.  FIAMM’s motive power business operates primarily in Europe and had sales of approximately euro 70 million (approximately US$31.25 million).  The transaction is expected to be dilutive to EnerSys’s fiscal year 2006 net earnings in the range of $0.02 per share and is expected to be accretive to net earnings within 12 months.  Enersys is the world’s largest manufacturer, marketer and distributor of industrial batteries.
 Wireless Everywhere
Not only are cell phone technologies driving the need for portable power, butother communications formats are also providing an entry.  Technologies include: Bluetooth (headsets, peripherals), Infrared (peripherals),  ISM Band (remote control and telemetry), RFID ( tagging and tacking inventory), UWB (video), WiMAX (broadband access), Wi-Fi (wireless LAN) and ZigBee (building monitoring and control.)
Electronic Design, September 15, 2005, pp. 27-28
 Rayovac is renamed Spectrum to better reflect diversified products. On April 27th, the company began trading on the New York Stock Exchange as SPC.
 Johnson Controls, Inc. (JCI)  reports a rise in earnings of 4 percent for the quarter (09/30/2005).   Growth of auto batteries and heating and cooling systems for buildings were positive and helped offset the declines in the auto interiors business.

For the quarter, JCI’s net income rose to $283.8 million ($1.45/share) from $273 million ($1.41/share) a year earlier.

Battery sales rose 37 percent to $864 million and operating income rose 79 percent to $114 million.  Support came from higher volume and sales of more expensive batteries.  The impact of the Delphi battery acquisition and the consolidation of a Latin American joint venture in the fourth quarter of 2004 had a postive impact. Currently, Johnson Controls is the world’s largest producer of Lead-acid batteries.  

JCI is seeking to expand its building controls and battery businesses and reduce emphasis on auto interiors.  
• The pending acquisition of York International, a large supplier of heating and air conditioning equipment, will support this goal; this  acquisition will hopefully be complete in December 2005.  
• JCI has also recently agreed to work on a joint venture with Saft to develop, manufacture and sell Nickel-metal hydride batteries for hybrid vehicles, and work toward the future of  Lithium-ion technology in hybrids.   JCI has received an order from a European  automaker (not named) to develop hybrid batteries for a 2009  introduction  of U.S. luxury vehicles.  

The quarterly report was viewed positively by the financial community and JCI stock rose $2.63, from $65.87 to $68.50, on the day of the announcement, October 24, 2005.
 Spectrum cuts profits for the fourth quarter ending Sept. 30, 2005. Weakness in battery sales is one of the prime reasons for the decline.  Pro forma diluted earnings per share are expected to range between 10 and 15 cents and Wall Street anaylists had forecasted profits in the 30+ cents range.

According to the information released by Spectrum on September 7th, there are “lower-than expected battery sales in Europe....North American battery sales will decline compared with last year, as expected, due to the ongoing transition to the new Rayovac marketing program combined with high inventory levels at retail.  The slight uptick in sales expected from battery and flashlight sales in hurricane-impacted regions this quarter will not offset the expected sales decline in this segment.” Rayovac battery business accounts for  about 30 percent of sales for Spectrum.

In July, Spectrum the stock rose between  $37.00 and $38.00 per share; on September 19th, the stock was selling for $25.94.
 Matsushita and Intel work jointly to provide  increase in battery life for notebooks.  Matshusita will contribute its expertise on Lithium-ion batteries while Intel will supply power-saving circuit technology. For mid-range notebooks, in 2006, Matsushita will be shipping a new Lithium-ion battery offering 30 percent more power capacity than the  batteries being used at this time.  Intel has a goal to achieve eight hours of notebook battery life by 2008.    Currently, the limit is about six  hours.
 Johnson Controls, Inc.’s third quarter (ending June 30, 2005) earnings were $1.31 per diluted share from continuing operations, up 21% over $1.06 the prior year.   Battery sales were very positive at $656 million, up 24% from $535 million in the 2004 period.  For the battery group, operating income was $76 million, up 35% from $56 million, as a result of higher sales as well as improved quality and cost reductions.    The battery group and the controls group  contributed only 30% of sales but contributed 47% of the operating earnings.   
 Energizer Holdings, Inc. reported third quarter profits for the quarter ending June 30, 2005 at $.73/share compared to $.46 /share a year ago.  Energizer noted that higher costs for raw materials and an unusual  high demand for batteries during the 2004 hurricane season would add approximately $12 million to 4th quarter expenses compared to last year.  A $3 million decrease in gross profit for the North American battery business was also mentioned; this factor was partly due to higher costs and unfavorable selling prices.    
 Gillette Co.’s second  quarter, ending June 30, 3005, posted a profit of 17%; income rose to $498 million, compared to $426 million in the year-earlier period.  Its Duracell battery business had 18% higher sales ($539 million); sales were helped by the extraordinary need for batteries because of the hurricanes and storms in the southern part of the U.S.  Operating income for Duracell  rose 14% to $119 million.
 EaglePicher Holdings, Inc. and EaglePicher Incorporated (collectively “EaglePicher”) receives Court approval on “First-Day Motions” in its voluntary Chapter 11 bankruptcy on April 12, 2005 filing.  EaglePicher received an interim $50 million debt-in-possession (DIP) financing from a bank group led by Harris Trust and Savings Bank, subject to conditions and limitations.  The final DIP hearing will be held on May 18, 2005, at which time and interim facility will expire.  EaglePicher is negotiating a permanent DIP with Harris.  CEO and President Bert Iedema said, “Having secured interim DIP financing and approval of our first-day motions gives EaglePicher forward momentum toward restructuring the company.”  

Although the company has several divisions, it is best known in the battery industry for its Defense and Space Power segment which makes batteries for satellites, launch vehicles and  missiles.  EaglePicher’s Commercial Power systems unit also makes batteries for medical and telecommunications applications.  

Dutch investment Granaria Holdings owns  the operating business of  EaglePicher..  EaglePicher Holdings, Inc. is the parent of EaglePicher Incorporated which is headquartered in Phoenix, Arizona.
 Energizer Holdings, Inc. develops hybrid batteries with Techtium Ltd. of Israel.  Techtium, a semiconductor company, develops hybrid batteries designed to extend battery life for portable electronic devices.  Energizer and Techtium will work to integrate the Techtium hybrid battery and charging technology powered by Energizer’s batteries into new portable electronic devices.  
 Johnson Controls, Inc. (JCI)  agrees to buy Delphi Battery.  In March 2005, JCI said it would buy Delphi Corp’s global auto battery business for $212.5 million.   Gregg Sherill, vice president of JCI’s automotive battery group, said, “We expect that this acquisition will enable us to...develop a leadership position in Asia, and become the primary supplier of original equipment batteries to the world’s largest automaker (General Motors).”  

Delphi’s Lead-acid batteries have annual sales of approximately $600 million  and Delphi has operations in more than 10 countries, including jooint ventures in South Korea and China.  A final agreement is being worked out and the transaction is expected to be completed sometime this summer.
 Proctor & Gamble (P&G) acquires Gillette, parent company of Duracell. The newly “merged” companies would create a megacompany with $60 billion in revenues and will thus become the world’s largest consumer products enterprise.  

Gillette is only about  a third of the size of P&G.  In 2003, the company had $9.25 billion in sales.  Almost 30,000 people worked for Gillette in 14 countries.

In 2004, P&G reported sales of  $51.4 billion.  Its workforce totals  110,000. The company has employees in 110 countries.       

Duracell’s primary  batteries will  gain from the mass  marketing and distribution system of P&G.  Companies such as Wal-Mart will be able to purchase a plethora of products, including Duracell batteries,  from P&G at a very good price.  

Primary batteries such as Alkaline and Carbon/zinc are a global commodity.  The Consumer Electronics Association reports that factory sales of primary batteries was estimated to reach $5,730 million in 2004.

 (BD note: Ranking in the “top three,” along  with Duracell,  in sales of primary batteries are Energizer and Rayovac. Because of the tremendous marketing and distribution power of P&G, Duracell’s competitors may find selling their primary batteries more challenging.  It will be interesting to see in the next year or two how vast the sales of Duracell’s primary batteries will grow and how Energizer and Rayovac will work to strategize so as to not lose market share in  retail sales of  primary portable power.)
 Exide (XIDE) shares fall sharply as Exide releases information on quarterly loss.  On November 16th, Exide reported a loss of $17.1 million ($.68 per share) in its second fiscal quarter.  Chief Executive Officer Craig Muhlhauser said, “Due to the company’s inability to hedge lead prior to our emergence from Chapter 11 and despite pricing actions and cost reduction initiatives implemented during the quarter, we were only able to offset 30 to 40 percent of the approximately $40 million adverse cost impact from lead price increases during the course of the quarter.”

Most Lead-acid manufacturers hedge part of their lead requirements to soften the impact of  significant  price increases in lead.  Exide could not do this while in bankruptcy. Lead makes up about 1/3 of Exide’s “cost of goods.”    

On the date of the announcement (11/16/04),  Exide’s stock closed at $10.32 which was a 21% decline for the day.  Exide’s high for the year was $22.25,  which was reached in  June.  At about 1 P.M. EST -on November 23rd, Exide had rebounded slightly and was selling for $11.29.
 Gold Peak’s Singapore-Listed GP Batteries intern turnover grows by 9.1 percent as of September 30, 2004.  Turnover increased mainly do to increases in sales of Nickel-metal hydride and Alkaline primary cylindrical batteries.    Commenting on GP Batteries’ prospects, Andrew Ng, Chairman and Chief Executive of GP Batteries, said, “Sales are expected to remain steady but operating margin will be under pressure as raw material prices are expected to stay high and volatile.  Competition in the Lithium-ion market is expected to be keener as prices continue to erode even as costs are going up as a result of the over supply situation.   The cadmium issue in our two Huizhou factories still needs time to be resolved and more expenses are expected to be incurred.  However, it is difficult to quantify the total amount that will be involved.  GP Batteries expects the operating environment to remain difficult for the rest of the current fiscal year.  The Management of GP Batteries remains positive about the medium and long-term prospects of GP Batteries Group.”

According to the  Knight  Ridder Newspapers in an article posted on Nov. 08th, some 600 workers in two factories in southern China have been tainted with cadmium.  The factories are owned by Gold Peak Batteries.  Workers have been asked to accept payments and forgo legal action.  Although the GP Batteries’ factories ceased making Nickel-cadmium batteries in July, the legal battle continues.  In early October,  Zhou Litain, an attorney, sued GP Batteries on behalf of 65 workers, stating they were not told of the dangers.

GP Batteries, in an official news release about the quarter from July 1, 2004 to September 30, 2004, stated that exceptional expenses had been incurred in relation to the cadmium issue in the two plants in Huizou, China.  GP Batteries  paid S$2.5 million during this quarter for compensation, medical and hospital expenses for those workers affected.
Microsoft Excel ChartKorea’s Electronics Technology Institute  reports that Korea’s global market share will grow to 25% next year.  In 2003, Korea’s market share was 19.5%.  

Samsung SDI and LG Chem are expanding their Lithium-ion polymer segments by increasing production. Samsung hopes to increase its capacity from 2.5 million cells to 3 million by the end of the year.  LG Chem has a goal to triple its ratio of polymer component from its current 6% to 18% by the end of next year.  +
 Saft opens new manufacturing plant in China.  The new plant will manufacture and assemble primary Lithium  and Nickel-cadmium batteries.  The Lithium batteries will be sold to Chinese markets for electricity meters and also gas and water meters.  Saft estimates that the Chinese market in meters is growing at approximately 20% per annum. The Nickel-cadmium batteries will be sold to the Chinese rail market  for local rail manufacturers to modernize their rolling stock and increase the presence of added-value components.
Microsoft Excel ChartLithium and Alkaline batteries are driving growth.  Lithium battery manufacturers are prepared to boost their exports by at least 60 percent, and Alkaline and Nickel-cadmium exports are predicted to grow at 20 percent annually.  

In reviewing 2003 production, there was an output of 450 million lithium batteries, 700 million Nickel-cadmium batteries and 35 million kiloVolt Amperes of sealed Lead-acid batteries.  

Guangdong province dominated output and exports, accounting for half of China’s total battery exports from January 2003 to March 2004.  More than 1/2 of all local battery manufacturers derive at least 50 percent of their sales revenue from exports.   

Mark A. Saunderson, publisher of Global Sources’ Electronics Business Unit, that produced the report said, “China’s rapidly expanding battery industry is now producing one-third of the global supply.”  

The report is based on the profiles of 213 battery manufacturers located in the major supply centers of Guangdon, Shanghai, Zhejiang, Jiangsu, Tianjin, Shenyang, Fujian and Harbin.   

Source: The Market Intelligence Report Batteries: Supplier Capability in Mainland China  (More information on the report can be found at  The 207-page report is US$645.) +
 Electro Energy  (EEEI) Inc., a manufacturer of bipolar Nickel-metal hydride batteries, goes public in June 2004.  The stock opened at $3.10 on June 7th and has risen at times to over $5.00/share.  On August 16th, the share price closed at $4.23.

Electro Energy’s technology utilizes a cell design and electrode fabrications technique  whereby flat wafer cells are stacked one on top of another to make a multicell battery.  Each cell consists of one positive electrode, separator layers and one negative electrode contained in face sheets that also serve as the cell contacts.  Multicell batteries are constructed so that the positive contact of one cell contacts the negative contact of the adjacent cell.  EEEI believes this design  provides an ability to discharge efficiently at exceptionally high rates and has lower manufacturing costs.  Currently, the battery is being used for military aircraft, weapons systems and communications, but President Martin Klein believes the battery will be commercially useful for power drills, hybrid electric vehicles and other applications. EEEI recently received three small business innovative research contracts from U.S. Government agencies.
 Johnson Controls (JC)  pays $525 million to buy out its partner, Grupo Imsa AV battery business. Buying out the 51 percent stake will give JC control of Latin America’s largest battery manufacturer.  Because of this purchase, battery  revenues for JC are expected to rise   US$250 million by for 2005.
JC was also awarded a USABC (United States Advanced Battery Consortium) contract to work on Lithium-ion batteries for hybrid systems.  

Last Sept. (2003), JC’s battery business accounted for US$2 billion. The company has 46% market share in North America and 24 percent globally.
Microsoft Excel Chart
 New classes of advanced batteries have been commercialized during the last 10 years, including Nickel-metal hydride,  secondary Lithium and Zinc-air.  Improved micro-electronic battery charger controller technology is allowing the commercialization of whole new classes of batteries (notably rechargeable Alkaline and Lithium-ion) and is improving the marketability of existing battery systems (notably Nickel-cadmium and Lead-acid).  

Lead-acid and Nickel-metal hydride will dominate the HEV/EV market while Nickel-metal hydride battery sales will drop with lithium technologies rising.  Stationary and UPS applications (not shown in the chart)  will grow more slowly over the period from 2003 - 2008.  

(Report Highlights are  from “GB-197N Large and Advanced Battery Technology and Markets” by Sandrine Colson-Inam, Ph.D., Business Communications Company, website: +
(July 2004) Energizer Holdings  wins a patent dispute over importation of certain Alkaline batteries into the United States. A U.S. International Trade Commission judge ruled that the import and sale of zero-mercury-added Alkaline batteries  be barred. The International Trade Commission will make a final ruling by September 2, 2004.      
 (July 2004) According to the Roland Berger  report, as reported  by  the Xinhua news agency in China on June 20th, China has produced the world’s most batteries.  China is said to also be Number 4 in the world for producing cars.    The   Report also stated that Ford’s purchases in China  would top US$10 billion  in a few years.
 (July 2004) BST Systems, Inc., a NASA and defense contractor, is investigated by the U.S.  Federal authorities. BST has issued a statement which reads, “BST is cooperating fully to respond to the investigators’s inquiries and at this time has no further comment.”

BST is probably best known for its Silver-zinc battery which powered NASA’s Pathfinder (rover)   that landed on Mars in 1997.   
 (July 2004) The European Portable Battery Association’s (EPBA’s) environmental  statutory  position  has  SAFT leaving the Association.  “Indeed it has become increasingly difficult to resolve differences between EPBA’s positions, defined by the big primary consumer battery manufacturers and Saft’s ambitious environmental policy promoting the collection and recycling of all its batteries’ technologies,” regrets Francois Bouchon from Saft, former Treasurer of the EPBA.

The European Commission’s proposal would require industry to accept producer responsibility for the collection and recycling of its batteries.  
 (June 2004) Rayovac Corp. and Sanyo Electric Co. complete a technology and manufacturing agreement to develop and market Rayovac’s I-C3 (In-Cell Charge) technology for Nickel-metal hydride batteries. The technology allows Nickel-metal hydride batteries to be recharged in as little as 15 minutes.  Sanyo’s research  development group  has a goal to further refine and develop the I-C3 technology by optimizing Sanyo’s high-capacity technology  in order to extend it to other applications and battery sizes.
 (June 2004) Exide Technologies has Joint Plan of Reorganization confirmed by the U.S. Bankruptcy Court in the District of Delaware.  Under this plan,  Exide’s debt will be reduced by $1.3 billion. Exide’s existing stock will be cancelled and no distribution will be given to current shareholders. A quantity of   22.5 million new shares of common stock will be issued to the Company’s pre-petition secured lenders, representing 90% of the Company’s common stock. Exide’s new common stock and warrants are expected to be listed on the NASDAQ National Market.  For additional information on the reorganization plan, see Exide’s website.
 (April 2004) New batteries power sales

The manufacture of battery packs, with many cells has a smaller margin than sales of conventional cells for China manufacturer BYD. Net profit for 2003 was up 31 % to 864 million yuan, but the gross profit margin dropped form 14% to 32%. Net operating cash inflow was 422 miullion yuan, up from 318 million yuan.

Lithium-ion battery packs account for 52 % of total turnover for 2003  while nickel based batteries accounted for 30.7 %.

BYD owns 77% of automaker BYD Auto Company which contributed 2.5% of total turnover. The plan is to increase BYD’s share in BYD Auto to 92%  for an additional 52.5 million yuan.

The company declared a dividend of 0.512 yuan compared with 0.284 yuan last year., February 22, 2004
 (March 2004) GP Batteries International and Energizer Holdings agree to a patent cross-licensing.  The cross-licensing provides all parties to operate freely throughout the world. This ends the legal  dispute over zero mercury-added Alkaline batteries.  

Last June Energizer Holdings and Eveready Battery Company initiated a U.S. International Trade Commission action against a number of companies, including GP Batteries, for  allegedly infringing on their battery patent.

 (January 2004) GP Batteries reports at the end of November 2003 that second quarter profit rose by half to S$12.56 million. Revenue was up by 25 percent at S$214 million in this time period.  Turnover grew by 23.3% and operating profit improved significantly with overall operating margin increased from 5% to about 6%.  Net profit grew 55.6%.

 The increase in turnover was mainly due to the continued increase in sales of Nickel-metal hydride and Lithium rechargeable batteries and the consolidation of sales of Zhongyin Ningbo Battery. GP Batteries continues to invest aggressively in advertising and promotional activities in China to further strengthen its market position.

 (Dec. 2003) GP Batteries reports second quarter profit rise of S$12.56 million.  Revenue was up by 25% at S$214 million (Singapore currency) during this period.  Net profit grew by 55.3 percent.  However, raw material prices for batteries have been rising so battery prices may be increasing  in the near future. Turnover grew by 23,3%; this increase was mainly due to the continued increase in sales of Nickel-metal hydride and Lithium-ion rechargeable batteries and the consolidation of sales of Zhongyin Ningo Battery, a 75 percent owned subsidiary acquired by GP Batteries in November 2002.  Sales of Lithium-ion batteries continued to increase; however, its volume was still behind expectation because of the outbreak of SARS earlier in the year.

 GP is also continuing to aggressively defend itself against action initiated by Energizer relating to patent infringement in the U.S.
 (Dec. 2003) South Korea spends US$1billion since 1999 for factories to make batteries for portable electronics.  By 2005, both Samsung and LG Chem, Korean battery markets expect to each have a 20% share of this battery  market.  The Korean government  has picked batteries as one of ten strategic products to spur the country’s economic growth.

The biggest challengers to the Korean effort will probably be the Chinese companies.  BYD already has taken 15% of the global market.
 (December,2003) U.S. battery and fuel cell materials demand are projected to read $3 billion in 2007; this is a 6.2 percent increase.  The growing popularity of high -drain devices such as digital cameras and 3G (third-generation) wireless phones will lead to an acceleration in U.S. battery production, spurring materials demand.  Fuel cell output will climb tenfold, resulting in stellar gains in associated materials consumption.  

Carbon graphite and polymers will record some of the strongest increases through 2007.   Even the market for nanomaterials with the potential to dramatically improve battery and fuel cell performance will climb at a fast pace as well.
Microsoft Excel Worksheet
Metals will continue to account for more than half of all battery and fuel cell materials consumption in 2007. Healthy sales conditions for small volume metals such as lithium, titanium and platinum will stimulate overall metals demand. Market gains for chemicals (i.e. lithium salts, manganese dioxide and solvents) account for the second largest share of total materials demand.

Electrodes will remain by far the largest functional category for materials. Strong increases will be registered in the battery market by materials used in separators, electrolytes and other functions such as catalysts and performance additives. These items are the focus of research and development activity aimed at reducing manufacturing costs and improving product performance.  

Information is from Battery & Fuel Cell Materials (published 10/2003, 245 pages) by The Freedonia Group, Inc. The cost is $3,800. Information may be obtained through
 (Oct. 2003) Nokia encounters more problems with fake batteries. In early October,  two individuals in the Netherlands and one in Vietnam reported injuries  when using their Nokia phones with non-original batteries. To date, there have been 20 registered reports of such incidents. The Finnish company issued a press release in February 2002 telling consumers to be aware of non-original mobile phone batteries.  

Malaysia has also been plagued with imitation batteries over the past three or four years. The most recent incident, June 2003,  involved an 11 year old boy who suffered injuries to his face when imitation batteries inside the toy exploded. The Domestic Trade and Consumer Affairs Minister Tan Sri Mohd Yassin stated that retailers and users have been conned into buying the imitations which look very similar to the original batteries.  He suggests that a regulation on international safety standards may  soon be introduced for locally manufactured and imported batteries.

David White, Energizer South Asian Regional Vice-president, has deep concern about the imitation batteries and states that Energizer loses about eight percent revenue in its 70 percent market share because of counterfeit batteries. (Statement referenced in “Imitation batteries in the market” by Carol Muruglah, New Straits Times, Johor Baru, 10/03)

In the Philippines in early October, the Criminal Investigation and Detection Group   seized 25 million pesos of fake batteries in Manila.
 (Oct. 2003) Electrovaya receives major contract from NASA. The company received a US$2.95 million contract to provide its high-energy Lithium-ion SuperPolymerR power system as a power source for the space suits astronauts wear during their space walk missions outside the spacecraft.  Dr. Eric Darcy, NASA Mission Manager, noted “Electrovaya was selected on the basis of its performance, reliability and safety features providing the best value to the Government.”  Electrovaya, Inc. is not a U.S. company; it is based in Canada.
 (Oct. 2003) Energizer Holdings, Inc. sells lawsuit against Powermax Battery (USA) Inc.  The case has been settled under confidential terms.   Powermax owned two U.S. Trademark registrations for EVERMAX for a variety of goods and such registrations have now been expressly abandoned by Powermax.
 (Oct. 2003) Alcatel sells SAFT batteries division  to Doughty Hanson in the United Kingdom.  The  sale price is 390 Euros (US$385 million).   SAFT manufacturers batteries for the industrial and telecom sectors in the world.  It employs 4,000 people at 14 sites in eight countries.  In 2002, SAFT’s revenues were 550 million Euros.  The sale must be submitted for regulatory approval.
 (Sept. 03)  GP Batteries Seeks Image With  Name Brand

GP International  Ltd. says its  goal is to turn its batteries into a household name just as Duracell, Panasonic and Energizer have done.

Microsoft Excel Worksheet

GP sees grow in the Malaysian market, especially for  rechargeables.  The Company will step up its production  in Malaysia by 15% from its current 10 million units monthly.

Director and general manager Tsang Kwan Lung stated   at a media briefing on September 19th that the import duty of batteries would be lowered to between zero and five percent from the current 45 percent under the Asian Free Trade Area in 2004.  With this fact in mind,  Tsang said,    “We are targeting Thailand, the Philippines and Indonesia, which have a high import duty now.”
(Sept. 03) Rayovac joins Gillette and Energizer in the shaving industry

On August 22, Rayovac announced that it would buy Remington Products Company for $165 million from Vestar Capital.  Rayovac also assumes Remington’s debt of about $157 million.  

This acquisition allows Rayovac to be on the same playing field with rivals - Gillette, which not only markets Duracell batteries but also  sells Mach3 razors and Oral-B toothbrushes, and Energizer, which recently  purchased the   Schick-Wilkinson Sword business from Pfizer, Inc.  to add manual razors and blades to its product line.

Remington holds the position as being the top brand in the U.S. electric shave market.  Its sales, as of the close of its fiscal year on June 30th, are reported as $360.3 million with net income of $20.2 million.  Remington’s main products are: electric rotary and dry shavers, beard and mustache trimmers and hair cut kits.

Rayovac views this purchase as an opportunity to expand internationally.  Rayovac’s current sales volume of $1 billion gains approximately 60 percent these sales outside of the United States.  Rayovac’s  Chairman David Jones made a statement in reference to the purchase and said, “Internationally, we have the opportunity to more aggressively expand the Remington brand name and product offerings into new, underdeveloped regions of the world.”
 (August 2003) Gillette, Energizer and Rayovac report on quarterly earnings.

Rayovac -  The Company reported its quarterly income fell 72 percent due to restructuring charges.   On June 30th, the end of the third quarter, Rayovac posted a profit of $2.9 million comparedwith $10.3 million a year earlier. Excluding $11.1 million in charges to cut costs and relaunch its Alkaline batteries with new pricing, Rayovac had profit of 31 cents/share. Largely due to the recently acquired Varta consumer battery business, sales rose 53.4 percent to $207.7 million from $135.4 million.  The Company expects to take charges of $43 million from a restructuring program begun in October 2002.  The Company said it will take the last $9 million of those charges in the  next (fourth) quarter.  

Energizer Holdings - In its third quarter ending June 30th, battery sales fell six percent to $217 million in North America, but international battery sales rose eight percent due to the weakness of the dollar against other currencies.   

Gillette - In the second quarter ending June 30th, Duracell reported sales of $432 million, an increase of one percent.   A profit of $54 million was 20 percent higher than a year ago.  Duracell had strong unit volume gains in North America and Europe; this more than offset the effect of Duracell’s exit from its Carbon-zinc battery businesses in South Africa and the impact of lower prices in North America associated with Duracell’s price-deal realignment initiative.  Operating profit and margin improved in the quarter, driven by savings in  both sourcing and manufacturing.  For the six months, sales of $816 million were up seven percent and profit of $93 million was more than double than that of a year ago.   


 Rayovac Varta(09-02BD78-2-3)

DaimlerChrysler was named “Environmentalist of the Year.” The award was given by the Environmental Research and Education Foundation (EREF) for DaimlerChrysler’s new recycling technology that could significantly reduce the amount of old car parts going to landfills. (08-02BD77-9)

The New Normal

In its midyear roundtable of financial experts, Abby Joseph Cohen said, “There are still a handful of unpleasant surprises coming, mainly form the telecom area.”Since this statement was made many days before the announcement of the Worldcom fraud announcement, BD wonders if inside information may have kept some from investing in WCOM.(07-02BD76-13)

June 24, 2002
German battery maker seeks partnerships Varta AG is seeking partners for its automotive and portable divisions. The move is necessitated by the growing purchasing power of large retail chains and intended to strengthen its business in Asia and the U.S. Automotive and portable batteries are the largest of Varta businesses which altogether produced $26 million in profit from sales of $590 million in 2001. Exide is not considered a contender since they are reorganizing under Chapter 11 bankruptcy in the U.S. and their participation would be further complicated by European antitrust limits. Varta is 92% owned by DB Investor , a subsidiary of Deutsche Bank. (07-02BD76-12)

Automotive News
May 6, 2002
East Penn named Glenn V. Perrini as Vice President of Sales, Automotive Batteries and Director of Sales, Cables and Diversified Product.

Microporous Products, L.P. welcomes Matthew Wilhjelm to their marketing team.
Midtronics appoints Ron Oritz to Vice President and General Manager. (07-02BD76-3)
GP Batteries reports year end results of March 31, 2002. During the year, GP Batteries’ over all performance was affected by the sluggish demand for electronic products worldwide in the second half of the year. Compared to the previous year, its turnover and profit decreased by 6.8% and 30.2%, respectively. Alkaline 9-Volt batteries recorded a healthy growth of 24% due to strong demand from private-label customers. GP Batteries is cautiously optimistic about its business outlook as there are signs of economic recovery, especially in the OEM market. Demand for Lithium-ion and Nickel-metal hydride is expected to grow. The company will continue to capitalize on the strong growth from private-label customers and develop the China market. They will explore opportunities in electric vehicles, especially for application of their Thin Metal Film (TMF) Lead-acid batteries. (07-02BD76-3)

Arthur D. Little accepts offers for sale of its seven lines of businesses. Five buyers from around the world are in the process of purchasing these businesses for a total of more than $96 million. On April 8th, the sale was approved in federal bankruptcy court in Worchester, Massachusetts; the sale reflected the auction conducted on April 3rd and 4th as part of the Company’s sale under chapter 11 of the U.S. Bankruptcy Code. Arthur D. Little, a 116 year old company was a spin-off of the Massachusetts Institute of Technology.(06-02BD75-7)

 The market for portable power supplies in the US is projected to increase 7.2 percent per year through 2005 to $10.7 billion. Among the major established products, secondary batteries hold the best prospects going forward, given their leadership position in growth markets such as high-end IT devices. Demand for primary batteries, exposed to more mature product markets and less potential for technological upgrade, will grow at a below-average pace. Portable and micro fuel cells are expected to be sold in commercially significant volumes by mid-decade. On the downside, portable power supply markets will be adversely impacted by slower economic growth than prevailed during the latter 1990s. (Data is from ‘Portable Power Supplies’ by The Freedonia Group, Inc., Tel: 440-684-9600.) +

In other news, former president and chief executive Arthur Hawkins and two other former executives of Exide, Alan Gauthier and Douglas Pearson, are on trial in East St. Louis. They are accused of lying to secure a large contract with Sears, Roebuck and Company in 1994. They are being accused of knowing that substandard batteries were manufactured, chose to conceal the defects and bribed a Sears employee to continue “pushing” the defective batteries. The trial in East St. Louis, Illinois is expected to last three or four months. If convicted, they could possibly face a prison sentence from five to ten years.(05-02 BD74-8)
Exide Technologies applies for Chapter 11 bankruptcy protection in mid-April. The company has arranged for $415 million in new financing, including $250 million in debtor-in-possession financing from Citicorp USA Inc. and other banks. It also included $165 million in financing provided by Citibank N.A. and other banks for its units outside the U.S. which are not included in the bankruptcy filing. The company said that it elected to file for reorganization because it offered the most efficient way to restructure its balance sheet and access new working capital while continuing to operate in the ordinary course of business. Exide’s bankruptcy filing listed assets of $2.07 billion and total debts of $2.52 as of December 31, 2001. Exide has a potential bidder for buyout. The Triton Partners of New York, a private equity firm, is considering a bid for the company. “Experts say any takeover would likely require a major debt restructuring under bankruptcy court supervision.” “Exide bondholders struggle amid buyout interest” by Dane Hamilton, Reuters, 04/02/02 (05-02 BD74-8)
AER Energy Resources, Inc. announces a new President, Dr. Lawrence A. Tinker. David Dorheim has resigned as President and CEO but will remain a director and a part-time consultant.
Texaco Ovonic Battery Systems LLC names Thomas S. Neslage as President and Chief Operating officer. James K. Greiwe was named Vice President, Product Development. (05-02 BD74-6)
As Technology Advances, Batteries Don’t

Taking a number of loose quotes from less than astute thinkers of our times, this story would have the average citizen believe that most all, if not all, problems can be blamed on the inability of batteries to keep up with technological innovation. For example the director of the Institute for the Future, Paul Saffo states, “They’re holding us back big time.” Had batteries advanced at the pace of the computer processor, “a double-A cell would contain more energy that a tactical nuke.”

Even a supposedly credible member of the MIT faculty, a Professor Donald Sadoway adds, “Within a handful of years, batteries will be powerful and cheap enough to propel a car 250 miles without a recharge. When this happens, automakers will junk the internal combustion engine.”

(BD Ed. note: While most - who have at least a conversational understanding of the second law of thermodynamics and current business forces - would not accept these statements, the average person on the street is left to wonder if he/she was not being led astray by the current battery offerings as presented by less than responsible journalism. Thinking of this type got California’s government into the mess it can’t get out of with ‘ZEVs,’ which also diverted funds to stifle true ecological advancement for the past decade. This battery story exemplifies a real need for accurate and responsible battery, fuel cell and photovoltaic people to get realistic information to voters and taxpayers.) (04-02 BD73-12)

by the Associated Press
carried in The Desert Sun
March 3, 2002, p.D1
C&D Technologies reports earnings of $.16/share for fourth quarter ending January 31st. Last year, January 31, 2001, 4th quarter earnings were $.61/share. The Dynasty segment had a sales decline of 47 percent, when compared to the prior year’s 4th quarter, primarily due to a decrease in battery demand for uninterruptible power supplies as well as telecommunications applications. In the Powercom group, sales fell 40 percent in the same time period. The Company reported that the telecommunications market demand for reserve power systems and batteries remain weak. In Motive Power, sales dropped 31 percent when compared to the prior year’s 4th quarter. (04-02 BD73-6)

ZAP, maker of electric bicycles and other electric scooters, files for Chapter 11 bankruptcy protection. The Company says they will continue to fill current orders and honor warranties during bankruptcy restructuring. ZAP stated that they filed for protection because of falling orders and high costs of protecting their patents.(04-02 BD73-5)

Exide Technologies stock has been de-listed from the New York Stock Exchange as of February 14th, 2002. The Company is listed on the OTC Bulletin Board under the symbol EXDT.(03-02 BD72-9)

Eagle-Picher Technologies is sued by former employee. The former employee, Rick Peoples, alleges the company manufactured batteries for the U.S. military that did not meet specifications of the contract. The Boeing Co. utilized the batteries as power for the Joint Direct Attack Munition Project; Boeing has stated that they have not had any problems with the subject batteries. Eagle-Picher issued a statement: “Eagle-Picher Technologies stands firmly behind the quality and reliability of its batteries used in various weapons systems...” The U.S. Air Force is sending a review team to check into the allegations.(Feb. 02,BD71-6)
End-users move forward with network deployments despite economic climate. Two new studies released by Infonetics Research today show planned network growth across the U.S., Canada, and Western Europe. The research confirms that VPNs and security remain in high demand; deployments of wireless LANs are rapidly ramping, and managed service demand is strong.

Although the troubled global economy and world events in the past year have heavily impacted the networking market, most end-users have adjusted and are moving forward to expand the speed and functionality of their data networks.

“End-users understand that the economy is delicate and unstable now, and many have tightened their belts a bit,” said Jeff Wilson, executive director of Infonetics Research. “They are much more selective about the new technologies, products, and services that claim to have all the answers. They’re still interested in new technologies, but they are primarily looking at technologies that allow them to reduce capital and operational expenditures.”

The studies, Network Technology Adoption Forecasts, US/Canada 2002 and Network Technology Adoption Forecasts, Europe 2002, provide analysis of current and future adoption of core networking technologies, and present a clear picture of how far networking and Internet products and services have penetrated.
Sample data from the studies:
Strong growth is expected for managed security services in the US and Canada:
¨ Small organizations: 28% used managed security in 2001, jumping to 70% in 2006
¨Medium organizations: 20% used managed security in 2001, 45% in 2006
¨Large organizations: 19% used managed security in 2001, 41% in 2006
Upsurge in wireless LAN use in Europe:
¨In Benelux: 9% used wireless LANs in 2001, leaping to 23% in 2006
¨In France: 8% used wireless LANs in 2001, 25% by 2006
¨In Germany: 11% used wireless LANs in 2001, 36% by 2006
¨In Scandinavia: 16% used wireless LANs in 2001, 46% by 2006
¨In the UK: 12% used wireless LANs in 2001, 43% by 2006. (Thanks for the lead, George.)(Feb. 02,BD71-6)
EnerSys Inc. reaches agreement with Energy Storage products group of Invensys plc. of England. The closing of the transaction is expected in the first quarter of 2002. John D. Craig, Chairman, President and CEO of EnerSys states, ...The combining of the U.S.-based EnerSys and the European based Energy Storage products group will result in the world’s largest industrial battery company.

Exide Technologies secures another waiver from its senior lenders through April 12, 2002. The Company was not in compliance with certain covenants contained in its Credit Facility as of September 30, 2001, and secured a waiver through December 28, 2001. Exide has also received notification from the New York Stock Exchange of the possibility that the Company’s stock may be de-listed due to the Company’s current inability to satisfy NYSE listing standards.

GP Batteries International Limited acquires Bolder Technologies Corporation, which recently declared bankruptcy in the U.S. GP Batteries paid US$2.5 million for the acquisition. The new TMF (thin metal film) technology will be used by GP Batteries in offering a emergency starter battery for the automobile industry. The technology has numerous possibilities in high-powered applications , in hybrid electric vehicles and for 36-Volt automotive batteries. Asia Pulse Ltd. 2001, 12/21/01
Johnson Controls reports a slight growth in earnings. The first quarter of fiscal 2002 increased 8% over the prior year’s $3.4 billion. Automotive European sales increased 23 percent, helped by the purchase of the automotive electronic business of Sagem SA last October. Also, sales of automotive batteries in North America were higher than the prior year, primarily due to shipments to new customers. (02-02,BD71-8)

Qualacomm Inc., creator of the next generation network standard, indicated that vendors have begun shipping cellular phones on “3G” network standard in North America. Phones and wireless modems compliant with the 2000 1X standard of the Company’s Code Division Multiple Access (CDMA) technology have begun to be shipped from vendors including Kyocera Corp., LG Electronics Inc. and Sierra Wireless Inc.(Feb. 02,BD71-6)
Sprint and Sanyo Fisher Company provided a preview of their Third-Generation (3G) at the Consumer Electronic’s Show (CES) in January in Las Vegas; the phone is to be available in 2003. Verizon Wireless is also scheduled to launch their 3G upgrades this year.

The expansion of wireless technology applications is listed as one of the key factors in UPS growth.4 “3G” should fit into this application’s category, but only time will tell how many people will upgrade from their cell phones and pagers. After listening to keynote speakers at Power 2001 report on “3G”, a survey of approximately 500 attendees showed that 2/3 of the respondents still thought they preferred using several specialized devices (cell phone, pager, PDA, etc.) rather than one solution. But, the hype is on to produce 3G devices. John Haron, a sales manager in St. Paul, Minnesota for Ultimate Wireless says, “The introduction of 3G into the Twin cities will revolutionize the way we communicate, work and share information.” (BD’s thoughts are that as we continue to have more virtual connectivity, in the process we trade off true interpersonal connectivity- good old fashioned person-to-person information sharing.)(Feb. 02,BD71-6)