Zentek and DCL Supply Ltd. Sign Distribution Agreement for ZenGUARD Enhanced Air Filters
Zentek has signed a distribution agreement with DCL Supply for ZenGUARD Enhanced Air Filters, effective from March 19th, 2024, with an initial term of one year, automatically renewing annually unless terminated with 90 days' notice. These filters aim to improve indoor air quality without significantly increasing energy consumption or emissions. The agreement is pending Health Canada's registration under the Pest Control Products Act, allowing DCL Supply to distribute the filters across Canada upon approval.
DCL Supply, a reputable HVAC distributor with over 40 years of experience, will leverage its extensive network to deliver these innovative solutions. This partnership aims to address the growing need for efficient air filtration in industrial, commercial, and institutional settings, potentially reducing maintenance costs and improving health outcomes.
- Zentek has secured a distribution agreement with an established HVAC distributor, DCL Supply.
- The agreement starts in 2024 and automatically renews annually, providing long-term distribution potential.
- ZenGUARD Enhanced Air Filters have the potential to reduce HVAC maintenance costs and improve indoor air quality.
- The partnership with DCL Supply, which has a strong reputation and extensive network, can enhance market penetration for ZenGUARD filters.
- The distribution of ZenGUARD Enhanced Air Filters is contingent on regulatory approval from Health Canada.
- Until Health Canada registers the product, it cannot be manufactured, imported, or distributed in Canada, posing a potential delay or risk.
- There is uncertainty regarding the timeline for the assessment and registration under the Pest Control Products Act.
Insights
Zentek's distribution agreement with DCL Supply Ltd. introduces a strategic alliance that can significantly impact Zentek's revenue streams. The agreement, effective for one year with automatic renewals, positions Zentek to leverage DCL Supply's extensive network in the HVAC market. This partnership could enhance Zentek's market penetration and revenue, contingent on the successful registration of ZenGUARD™ Enhanced Air Filters by the Health Canada Pesticide Management Regulatory Agency.
If approved, ZenGUARD™ Enhanced Air Filters have the potential to drive sales growth by tapping into DCL's established client base in industrial, commercial and institutional sectors. It's crucial, however, to recognize that the revenue impact is deferred until the regulatory approval is secured. Investors should keep an eye on the progress and outcomes of the regulatory process, as delays or denials could adversely affect Zentek's financial projections.
This agreement, while promising, carries execution risks. Integration and distribution logistics will be vital to capitalize on the market opportunity. Long-term success will depend on the product's acceptance and performance in the market, along with Zentek's ability to maintain competitive pricing without compromising quality or profitability.
The HVAC market is currently seeing increased demand for products that improve air quality and reduce maintenance costs, primarily driven by heightened awareness around health and safety. ZenGUARD™ Enhanced Air Filters align well with these market trends, potentially offering Zentek a competitive edge. This product promises to capture viral particles effectively without heavily relying on mechanical filtration, which can be a selling point for property managers looking to reduce operational costs.
DCL Supply's well-established reputation and extensive distributor network provide Zentek with immediate market access, which is a significant advantage. However, the condition of Health Canada registration under the Pest Control Products Act is a pivotal factor. The current regulatory assessment means that market entry is not immediate and investors must consider the regulatory risk involved.
Additionally, the energy consumption and emissions considerations mentioned by Zentek's CEO align with broader trends toward sustainability in the HVAC sector, potentially boosting the product's attractiveness to environmentally-conscious clients.
The ZenGUARD™ Enhanced Air Filters represent a significant innovation in HVAC technology. Unlike conventional air filters that rely mainly on mechanical filtration, these filters aim to control infectious aerosols more efficiently. This could result in fewer filter changes and reduced maintenance costs, addressing a key pain point for property managers and facilities operators.
The technology behind ZenGUARD™ could offer a dual benefit of improved air quality and lower operational costs. However, the success of this product will heavily depend on its real-world performance and regulatory approval. The ongoing assessment by Health Canada is a important step, as it will determine whether the product can be legally sold and distributed in Canada.
If the product performs as claimed, it could set a new standard in the market, driving demand not just in Canada but potentially in broader markets as well. Investors should monitor any updates on regulatory approval closely as it will be a significant milestone for Zentek.
GUELPH, ON / ACCESSWIRE / May 23, 2024 / Zentek Ltd. ("Zentek" or the "Company") (Nasdaq:ZTEK)(TSX-V:ZEN), an intellectual property development and commercialization company and DCL Supply Ltd. ("DCL Supply"), a private Heating, Ventilation and Air Conditioning ("HVAC") master product distributor are pleased to announce that they have entered into a distribution agreement effective March 19th, 2024, for an initial one-year term, and which automatically renews for subsequent one-year terms unless 90 days' notice is given by either party prior to renewal. The initial product to be distributed will be ZenGUARD™ Enhanced Air Filters for the HVAC market, subject to the assessment by the Health Canada Pesticide Management Regulatory Agency for registration under the Pest Control Products Act, which is ongoing. Subject to such registration, this agreement would allow DCL Supply to distribute ZenGUARD™ Enhanced Air Filters through its extensive distributor network serving numerous industrial, commercial and institutional clients within and across Canada.
DCL Supply Ltd.
DCL Supply serves many leading HVAC distributors across Canada and has a strong reputation for being a reliable and knowledgeable partner. For over 40 years, DCL Supply has demonstrated its commitment to service excellence and providing high quality, innovative and labour-saving brands to its clients.
"Creating healthier indoor spaces while reducing HVAC system maintenance costs is extremely important. To best accomplish this, we believe simple solutions that work with existing HVAC systems to control infectious aerosols will be most effective," remarked Greg Fenton, CEO of Zentek. "Our aim is to accomplish this without significantly increasing energy consumption and emissions. We are encouraged to see organizations in the HVAC space, like DCL Supply, that share our conviction on the importance of this balance, and we look forward to working with them in the months ahead."
"DCL Supply has been helping serve the HVAC needs of numerous industrial, institutional, and commercial clients for over 40 years. A key part of this is identifying and bringing forward new, innovative products for our distributor partners that add value for end users." said Michael Breault, Director of Sourcing and Business Development of DCL Supply. "Many property managers have shifted to using air filters with a higher level of mechanical filtration to capture more viral particles to help keep people safe. With the potential to not rely solely on a high level of mechanical filtration to accomplish this, we can improve indoor air quality while requiring fewer filter changes and reducing labour costs. This value proposition is a natural complement to the other solutions we provide to our clients - and also aligns closely with our commitment to bring forward labour-saving brands to our distributor network."
The ZenGUARD™ Enhanced Air Filter product is currently being assessed for registration under the Pest Control Products Act (Canada).
It cannot be manufactured, imported, distributed, or used in Canada at this time, unless explicit authorization has been obtained from Health Canada to use this product for the purpose of conducting research under the Pest Control Products Regulations.
About Zentek Ltd.
Zentek is an ISO 13485:2016 certified intellectual property technology company focused on the research, development and commercialization of novel products seeking to give the Company's commercial partners a competitive advantage by making their products better, safer, and greener.
Zentek's patented technology platform ZenGUARD™, is shown to have 99-per-cent anti-microbial activity and to significantly increase the viral filtration efficiency for surgical masks and aims to do the same for HVAC (heating, ventilation, and air conditioning) systems. Zentek's ZenGUARD™ production facility is located in Guelph, Ontario.
For further information on DCL Supply Ltd:
For further information on Zentek:
investorrelations@zentek.com
Ryan Shacklock
Senior VP, Strategy & Business Development
Email: rshacklock@zentek.com
Phone: 306-270-9610
To find out more about Zentek, please visit our website at www.Zentek.com. A copy of this news release and all material documents in respect of the Company may be obtained on Zentek's SEDAR+ profile at http://www.sedarplus.ca/.
Forward-Looking Statements
This news release contains forward-looking statements. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although Zentek believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Zentek disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Zentek Ltd.
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FAQ
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