SINGAPORE - Mainboard-listed said on Wednesday (March 29) that its associate company Beijing E-Star Electric Technology Co Ltd will build 160 charging stations for electric vehicles in China's Huizhou city through a strategic collaboration with a Chinese property developer.
Zico said the move marks the start of a new phase of growth for the company, which acquired a 45 per cent stake in Estar Investments Pte Ltd last month to create an additional income stream amid waning demand for its synthetic-rubber products in China. Estar is the parent company of Beijing E-Star, which builds charging systems for electric vehicles.
Under the strategic agreement with Tai Yu Realty, a developer in Guangdong province and Wuhan city in Hubei province, Beijing E-Star will install 90 charging stations at Tai Yu's Huizhou City Centre, a 1,200-unit residential development with a total of 1,680 parking lots.
Phase 1 of Huizhou City Centre recently obtained regulatory approval for homeowners to move in. Expected to be fully operational before the end of the year, the 90 charging stations will cater to the 980 basement parking lots for this phase. Beijing E-Star will build an additional 70 charging stations for the development's second phase, which will have 700 parking lots above ground.
All cabling and power requirements for the charging stations will be handled by Tai Yu, which will share all profits generated by the charging stations with Beijing E-Star. Revenue will be in the form of electric tariffs, service fees and parking fees, all of which will be paid by users of the charging stations.
Both parties have also agreed to work together to put in place charging stations for Tai Yu's other residential developments and future projects in China.
Beijing E-Star currently operates in China's capital city, where its 22 charging stations are available to the public and several electric-car rental companies. The collaboration in Huizhou marks its maiden foray outside Beijing and its first time working with a property developer.
Users can locate its charging stations in Beijing and book a slot through an app developed by Beijing E-Star. They pay using a store-value card issued by Beijing E-Star or through Alipay or WeChat Pay, two popular e-wallet providers in China, the world's largest market for electric vehicles.
The country produced 517,000 new-energy vehicles - comprising battery-electric vehicles, plug-in hybrids and fuel-cell cars - in 2016, 52 per cent more than the previous year, according to ReportLinker, a market research firm based in France. Some 2.1 million new-energy vehicles are expected to be sold in China in 2020, ReportLinker says.
Regulations to promote greater environmental awareness are expected to contribute to the growth of China's electric-vehicle market. According to new national standards and regulations that came into effect on Feb 1 this year, at least 10 per cent of the number of lots in all new public carparks in China must be equipped with charging facilities for electric vehicles.
"Reining in air pollution is one of the key priorities of China's top political leadership. This will underpin demand for electric vehicles and pave the way for more supporting infrastructure like charging stations," said Mr Tay Wee Kwang, a Singaporean electronic engineer who co-founded Beijing E-Star in 2014.
He added: "Compared to doing it all by ourselves, working with a developer like Tai Yu allows us to scale up fairly quickly and penetrate cities outside Beijing. This also enables us to generate recurring income, which will self-fund the business even as we roll out in more places."