As part of the agreement with Norwin, a joint venture (JV) company will be established in Shenyang, China that will be 80% owned by GaoKe. This JV will begin selling the 750kW and 225kW wind turbines later in 2008, after construction is completed on the first phase of GaoKe’s new wind turbine production facility.
GaoKe and Norwin will also establish a joint research and development facility in Shenyang to develop new wind turbine technology for both the Chinese and international markets.
To secure the rights, GaoKe has agreed to pay Norwin a license fee of $3.5 million. The sale price of the 225kW wind turbine has not yet been determined, but the 750kW wind turbine is expected to sell for $0.46 million to $0.51 million, with approximately 8% to 12% gross margin.
GaoKe will have the capacity to produce a maximum of 420 units of 750kW wind turbines and 400 units of 225kW wind turbines on an annual basis after the first phase of its wind production facility is completed.
