SOURCE: Shiloh Industries

Shiloh Industries

March 11, 2014 09:00 ET

Shiloh Industries Announces Strategic Partnership With Velocys

Becomes Preferred Fabricator of Cores for Modular Reactors

VALLEY CITY, OH--(Marketwired - Mar 11, 2014) - Shiloh Industries, Inc. (NASDAQ: SHLO) has entered into a strategic manufacturing agreement with Velocys, plc. (LSE: VLS), to be the preferred fabricator of microchannel cores and future products being explored. The cores are an integral component of Velocys' modular reactors that enable small scale distributed gas-to-liquid systems that convert unconventional, remote and problem gas into valuable liquid fuels.

"Shiloh will be utilizing our advanced laser welding technology to manufacture the cores for Velocys," said Ramzi Hermiz, president and CEO of Shiloh. "As a preferred supplier, Shiloh's engineering focus on lightweighting will be applied to the development and manufacturing of future products being designed by Velocys."

The two companies have been working together since 2012 to develop and implement economic, high quality mass-manufacturing capabilities for the Velocys Fischer-Tropsch (FT) reactors, based on state-of-the-art manufacturing technology and quality systems from the automotive industry. Together with Shiloh, Velocys' supply chain can support annual FT reactor orders sufficient for 10,000 bpd of production, and has plans enabling expansion to 40,000 bpd in time for order growth. 

Velocys provides complete smaller scale GTL solutions that address an untapped market of up to 25 million barrels of fuel a day. As the gas-oil arbitrage remains at an all-time high and as more global regulations ban the practice of flaring, Shiloh and Velocys expect to see a substantial increase in demand for distributed scale GTL technologies. A significant opportunity exists for converting low-value gas into high-value, clean synthetic oil.

"The Velocys compact microchannel reactors require several miles, of high precision laser welding in each core," added Hermiz. "Technology like this enables our company to further diversify ourselves to expand into new markets and seek new opportunities."

Shiloh will be manufacturing these products out of its Innovation Drive Plant in Valley City, Ohio.

Velocys' microchannel Fischer-Tropsch reactors convert waste gas (which usually is flared or re-injected), stranded gas and renewable sources like biomass into clean liquid fuels such as ultraclean diesel, jet fuel and other synthetic industrial liquids. The reactors consist of three or more cores containing thousands of thin process channels filled with FT catalyst, which are interleaved with water-filled coolant channels.

"Shiloh offers proven material expertise with vertically integrated and advanced capabilities, and we are confident that Shiloh can meet the anticipated market demand with the highest standards of quality," said Roy Lipski, chief executive officer of Velocys. "We look forward to bringing our GTL technology to the commercial market using Shiloh's advanced and smart manufacturing expertise."

Velocys has the world's largest microchannel patent portfolio with over 25,000 claims in more than 800 patents worldwide.

As part of the agreement, Shiloh will be acquiring approximately 600,000 shares of Velocys stock.

About Shiloh Industries, Inc.

Headquartered in Valley City, Ohio, Shiloh Industries is a leading supplier, providing lightweighting and noise, vibration and harshness (NVH) solutions to automotive, commercial vehicle and other industrial markets. Shiloh delivers these solutions through design, engineering and manufacturing of first operation blanks, engineered welded blanks, complex stampings, modular assemblies and highly engineered aluminum die casting and machined components serving the body-in-white, emission, powertrain, structural and seating needs of OEM and Tier 1 customers. The company has multiple locations across North America, including Georgia, Indiana, Kentucky, Michigan, Ohio, Tennessee, Wisconsin and Mexico, and has approximately 2,000 employees.

About Velocys plc

Velocys (formerly Oxford Catalysts) enables modular gas-to-liquids (GTL) plants to convert unconventional, remote and problem gas into valuable liquid fuels. Systems based on the Company's technology are significantly smaller than those using conventional technology, enabling modular plants that can be deployed cost effectively in remote locations and on smaller fields than is possible with competing systems. Together with world-class partners, Velocys provides complete modular GTL solutions that address an untapped market of up to 25 million barrels of fuel a day. Velocys plc is listed on the AIM market of the London Stock Exchange (LSE: VLS). The Company has approx. 100 employees with facilities in Houston, Texas, USA and near Oxford, UK and Columbus, Ohio, USA. 

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