logo-loader

Papyrus Australia grants first right to exploit banana fibre technology in China

Published: 09:11 09 Feb 2021 AEDT

Papyrus Australia Ltd. - Papyrus Australia grants first right to exploit banana fibre technology in China
The company contemplates setting up the first turn-key factory in China in 2022.

Papyrus Australia Ltd (ASX:PPY) has signed a memorandum of agreement (MoA) with Union Pacific Trading P/L (UPT), an entity related to significant shareholder Union Pacific Equities P/L (UPE), aimed at advancing its sustainable packaging technology in China.

The company intends to advance to the second stage of corporate development and to sell turn-key factories to produce banana fibre products to operators in other banana-growing countries once construction of its proposed Egypt moulded fibre factory is operational.

PPY contemplates the first turn-key factory in China in 2022 while UPT commits to establishing a Chinese entity and operations.

China is the second-largest producer of banana and has a plastic packaging waste problem which the government demands to be addressed.

Papyrus can assist by selling turn-key factories and licensing the rights to establish banana fibre product manufacturing facilities in China.

This is contemplated by the MoA which was signed and formally agreed to on February 7, 2021.

MoA details

The MoA has five stages and stage one contemplates the establishment of a joint venture company under Chinese Law, with a completion date target of the end of March 2021.

Stage two requires the JV company to undertake comprehensive project research in China regarding the government and all other requirements to establish the first project within or near the banana-growing areas.

In the third stage, the JV company will organise field trips in 2021, for PPY officers to travel to China to assess the proposed site for the first manufacturing facility and inspect available banana plantations.

During the fourth stage, a business plan will be developed for the JV company to undertake the first project which will require patented Papyrus equipment and other proprietary fibre processing machinery required.

The fifth stage requires the execution of a contract between PPY and the JV company no later than the end of July 2021, together with the payment of a deposit to PPY for the purchase of proprietary plant and equipment necessary for the first project under the agreed business plan.

Intellectual Property licence

PPY has offered to grant UPT the Intellectual Property licence necessary to enable the undertaking of the project, subject to further exploration and negotiation of relevant commercial terms and conditions and entering into formal binding agreements.

UPT, which has established relations in China has started its obligations to establish a Chinese legal entity to undertake the project.

It is anticipated that this process will be complete by 2022, the pathway for which is agreed within the terms of the MoA.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

11 hours, 6 minutes ago