Ballard Power Systems Inc. - Text Version

Firoz Rasul, Chairman, Ballard Power Systems, Burnaby, B.C.

FIROZ RASUL: I was introduced to Ballard in late 1988. And it was a, in the very early stages of development. There were about 13 employees, mostly dealing with battery, lithium battery technology. And they had three people working on fuel cells because, in the mid-80s, the company had acquired a project proposal to develop fuel cell technology for the Canadian Department of National Defense.

The technology was being used in the space program for providing power and life support systems on spacecraft. We picked up the technology and started looking at it for everyday use in different applications. I was brought on board by people who were looking to put money in the company, and introduced to the company to bring a commercial sense.

MICHAEL BROWN: In 1987, we were presented with the opportunity to make an initial investment in Ballard and we put up some money and the Business Development Bank put up some money and together we invested about a million three.

So after we had made this original investment we watched the milestones with some care and they had some amazing scientific breakthroughs. No question about it. However, it also became evident that, as an enterprise, as time went on, that we were going to have to find a different kind of leadership that was not science leadership, that was not science-based. It had to be a leadership that understood the way markets would evolve. So over time, at Ventures West, we persuaded the founders that we should, collectively, go and find the person to take the company to the next step.

So the really first serious investment of seven and a half million dollars, that was put in place in the spring of 1999, was done with their new recruit, Firoz Rasul, being the President of the company.

FIROZ RASUL: So we were up against the auto companies and the manufacturers of auto parts. We were also up against fuel companies cause we were trying to come up with a different fuel than oil or petroleum-based fuel.

We also understood that we were a very small company trying to work in this field of giants and so we needed to get strategic partnerships and strategic relationships in place where we could leverage other people's efforts. We could never do it on our own. It was not just their money, it was their knowledge, it was their manufacturing capability, it was their marketing understanding, it was their service infrastructure, it was their own technology development, which was complimentary to what we were trying to do. We then were able to secure relationships with Daimler Chrysler, the Ford Motor Company, and later on with ALSTOM in France and EBARA in Japan.

The development of technology and the development of how the technology is going to be manufactured go together. You can't do that individually, they have to be concurrent and simultaneous and in parallel. And that's something that we've learned and tried to do from earlier on.

For us to be successful, we realized we had to start with the customer who would define the product for us, and from then we could understand the technologies that were needed to take the product to market. And we've continued to improve that discipline today...from product roadmaps and technology roadmaps... and also understanding that we can't develop all the technology ourselves.

And we as a company have over 1,700 patents today. That is a measure of how far we're moving the technology and really doing what other people have never done. And we pride ourselves in our intellectual property position and the strength of it, not just to enable us to practice what we want to do in terms of getting technology to market, but we think it'll be a very powerful defensive move as well, as other people will run up against our patents and block them from doing certain things. That's part of how we will create success for ourselves as we convert those patents into money through products for our shareholders.

Now, innovation or innovative ideas at Ballard were not just confined to technology development. We learned that innovation had to be in other areas too, in the way we did our financing, in the way we did our marketing and marketing relationships, in the way we created strategic partnerships and sought other players to come and add to what we were doing. And the way we dealt with government. So the innovative nature of doing business for us had to be pervasive in the company.

We, in our early days before we went public, we always tried to find a way of matching monies from three sources. We always first went to get a customer, cause once you have a customer then it's easy to get money from private investors, and then once you've got those two, then it's easy to get money from government. Ballard has raised over a billion dollars. That means we have accountability to provide return to our shareholders for that amount of money and we take that very seriously.

We've grown as a company from thirteen employees or so, when I joined the company fifteen years ago, to about 1300 employees today, located in five different parts of the world.

I think we are in, at a point where we're at a threshold in that we've done a lot of the technology development, we've done it with partners, with customers, and we're now getting ready for our customers to start to put products on the market. As a supplier of technology and products to major original equipment manufacturers, we have this difficult position where we don't decide when those products go to market, they do.

And so we're at that point right now in working with them to lay out what their plans for introduction are going to be, when they're going to launch these products. In the next 10 years we will see automobiles in showrooms, see buses on the road. We'll see homes being powered by fuel cells, businesses, manufacturing facilities, have fuel cell power.

I think it's going to become widespread and we certainly see Ballard as being at the forefront of that. Our vision is power to change the world. That vision and that possibility, that potential, is what drives the company — that passion to make that happen!

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