Supply chain quality issues will impact 2021 production volumes

Nilar International expects to report lower than planned production volumes in 2021, primarily caused by quality problems in the supply of raw materials and certain components and by Covid-19 related production restrictions. Variances in raw materials and components have led to significant temporary adjustments in the battery production process causing bottlenecks. In addition, Covid-19 related production restrictions lowers production volumes. As a result, the planned 2021 production volume previously communicated of 40 MWh, is not expected to be achieved.

Nilar is rapidly expanding its production capacity at its Gävle plant to service strong demand for its energy storages, which currently far outweighs the company’s ability to deliver. Another four production lines are planned to be added by the end of 2021 to the presently installed and commissioned four production lines.

Despite rapid nominal capacity expansion during the second quarter, Nilar has not been able to fully utilize the increased capacity due to specification variances in two key components: active materials and separator material. Both factors have resulted in temporarily lower production yields. Nilar is confident that these issues are temporary setbacks, and that solutions have been found. Also, Covid related production restrictions are expected to be lifted shortly.

Nevertheless, lost scale-up time cannot easily be regained, and Nilar expects that the previously communicated planned production of about 40 MWh for full year 2021 will not be reached. By the end of 2021 eight production lines are still planned to be installed in the Gävle factory, allowing for significant volume growth once the current temporary disturbances in the supply and production chain have been solved.

Marcus Wigren, Nilar CEO comments: “Scaling up fast is hard for anyone, especially in Covid-19 times, with supply-chain instability. So far, we have been fortunate not to be hit by major component shortages, as have so many of our industrial colleagues. And we do look forward to soon ending the stringent Covid-19 induced strictures, like complete separation of shifts and the need to close down all production processes between shifts – an incredibly crippling safety regime.”

Regarding Nilar’s market, demand remains strong throughout Europe. A new battery variant, Nilar Hydride® Energy+, has been launched and was well received by customers who require a higher energy (but slightly lower power) battery storage.

This is information that Nilar International AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 0800 CET on July 1, 2021.

For more information, contact:
Marcus Wigren, CEO
+46 76 769 50 75
marcus.wigren@nilar.com 

Press contact:
Matilda Ekman Vråmo
+46 72 213 0128
matilda.ekman.vramo@nilar.com

 About Nilar

Nilar is a Swedish-based developer and manufacturer of stationary energy storage systems, so-called Electrical Energy Storage (ESS) systems. Energy storage systems can be used to bridge imbalances between energy production and demand in order to, for example, improve the utilization of intermittent electricity production from renewable energy sources, such as solar energy and wind power, as well as to strengthen the increasingly strained power grids. Nilar's battery technology is based on nickel-metal-hydride (NiMH) electrochemistry with a water-based electrolyte, which results in a strong environmental and safety profile together with a competitive price over a life cycle. The Company is headquartered in Täby and the energy-efficient production facility is, since 2012, located in Gävle, where the Company's research and development also takes place.

The Nilar share is listed at Nasdaq First North Premier Growth Market, ticker NILAR. FNCA Sweden is Certified Adviser +46 8 528 00 399. For more information go to www.nilar.com. 

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Quick facts

Nilar International expects to report lower than planned production volumes in 2021, primarily caused by quality problems in the supply of raw materials and certain components and by Covid-19 related production restrictions. Variances in raw materials and components have led to significant temporary adjustments in the battery production process causing bottlenecks. In addition, Covid-19 related production restrictions lowers production volumes. As a result, the planned 2021 production volume previously communicated of 40 MWh, is not expected to be achieved.
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Quotes

Scaling up fast is hard for anyone, especially in Covid-19 times, with supply-chain instability. So far, we have been fortunate not to be hit by major component shortages, as have so many of our industrial colleagues. And we do look forward to soon ending the stringent Covid-19 induced strictures, like complete separation of shifts and the need to close down all production processes between shifts – an incredibly crippling safety regime.
Marcus Wigren, CEO.