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 TORONTO, Aug. 4 /PRNewswire/ -- Lenox Polymers Ltd. (Canadian Dealing Network: LENP) announced that its wholly owned subsidiary, Lenox Resources, Ltd. of Port Huron, Mich., has entered into a license agreement with Bakelite AG, a 100-percent-owned division of Rutgerswerke AG of Germany.
 Environmental regulations are becoming very strict in Europe, and some of these new regulations require products to have very low levels of formaldehyde. Lenox technology and products are environmentally friendly. Lenox is the owner of patented and other proprietary technology for the production of very high quality lignin, from pulp mills. One of the important environmental advantages of lignin is that it does not contain any free formaldehyde or free phenol.
 The raw material used by Lenox is the lignin which is contained in the black liquor from pulp mills. Lignin represents about 25 percent of wood, a renewable resource, and it is the natural glue which holds the cellulose fibers together in wood. This lignin is a natural by-product of the paper industry's pulping process. It offers a powerful economic and environmental incentive as a replacement for substantial quantities of petrochemical-based polymers and, in particular, phenolic polymers in a number of industrial applications.
 The agreement licenses Bakelite AG to use certain Lenox proprietary lignin technology in phenolic applications.
 Rutgerswerke AG is a corporation with over 13,000 employees with manufacturing plants in Germany, Belgium, Spain, Italy, France, United States, Canada and Mexico. Bakelite AG has recently opened a sales office in Moscow.
 -- Bakelite has eighty years' experience and the most extensive product line in the multi-billion-pound phenolic resins, molding compounds and epoxy resins market.
 -- In Europe, Bakelite is by far the largest manufacturer of phenolic resins for all different product applications including automotive, foundry, specialty resins for aircraft, plywood, waferboard, and other large volume markets.
 -- Under the licensing agreement, Bakelite is to pay Lenox Resources a down payment, running royalties, and minimum royalties over a minimum 10-year period.
 -- The agreement allows Lenox to produce and market products in North America which have been jointly developed with Bakelite at no royalty cost to Lenox. In this way, Lenox avoids the high cost of product development for the North American market while having a series of new products coming from Europe as they are developed and perfected there.
 -- In addition to foundry applications, the license agreement also covers various specialty products with which Bakelite has considerable expertise.
 -- One of the key elements of the licensing agreement is that Bakelite has an exclusive license for foundry technology in Europe only. This means that if Bakelite sublicenses any Lenox foundry technology to other companies in Europe, Lenox will receive additional revenue from these additional sublicenses.
 -- For the rest of the world, including North America, Lenox can either manufacture and sell foundry products directly or license its foundry technology to other companies, which could also generate additional sources of revenue for Lenox. Lenox plans to focus its efforts on those foundry products and market areas from which Lenox can derive the most profit through direct sales. Then, in those geographic areas where it is not feasible for Lenox to directly supply foundries, Lenox plans to work out appropriate licensing agreements.
 -- The net effect of this licensing agreement is that Lenox has entered into a strategic alliance with a major German corporation that has extensive R&D facilities, modern production facilities, and a worldwide sales network.
 For Lenox to hire or acquire this level of expertise would require a very substantial investment, even without considering the technical facilities to which Lenox now has access. As a result of this licensing agreement, German scientists will be working at Lenox facilities in North America in order to expedite the development of certain products for the European, North American and Asian markets.
 Lenox Polymers trades on the Canadian Dealing Network under the symbol LENP. Quotes on the company's stock can be obtained through the Starquote system of Star Data Systems, Inc., and the Telerate system via Stockwatch.
 -0- 8/4/93
 /CONTACT: Kenneth Kurple of Lenox Polymers Ltd., 313-985-6464 or fax, 313-985-7290/

CO: Lenox Polymers Ltd.; Lenox Resources, Ltd.; Bakelite AG ST: Michigan, Ontario IN: CHM SU: LIC

KE-SB -- DE002 -- 9161 08/04/93 07:39 EDT
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Publication:PR Newswire
Date:Aug 4, 1993

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