Zecotek Signs LFS Scintillation Crystal Supply Agreement Worth $21 million Over the Next 3 Years

SINGAPORE--(Marketwired - January 25, 2017) - Zecotek Photonics Inc. (TSX VENTURE: ZMS) (FRANKFURT: W1I) (OTC PINK: ZMSPF), a developer of leading-edge photonics technologies for healthcare, industrial and scientific markets, is pleased to announce that it has signed a LFS scintillation crystal supply agreement with the Shanghai based company EBO Optoelectronics, to supply over $21 million worth of scintillation crystals over the next three years. The agreement stipulates that the supply of the LFS crystals will continue on a yearly basis after the initial three year period, unless otherwise agreed to by both parties. Zecotek will become the main supplier of Lutetium silicate based scintillation crystals to EBO.

"The Shanghai EBO Optoelectronics Company is a strategic customer with strong network and access to the medical imaging industry in China," said Dr. A.F. Zerrouk, Chairman, President, and CEO of Zecotek Photonics Inc. "Recent changes to the regulatory landscape in China, regarding medical equipment imports, has caused OEMs to manufacture medical scanning devices domestically. This initial contract is a starting point and we look forward to building an even more significant business with EBO to capture a significant portion of the PET medical scanner market in mainland China."

EBO is the largest crystal array producer and supplier in China. Their arrays are used in the very fast growing domestic PET medical imaging market. Zecotek will be supplying elements of LFS to EBO as the customer. In order to meet the growing demand, Zecotek is working on the gradual expansion of its manufacturing base and capabilities, however it will be using its present facility to start the present agreement, while fulfilling, as a priority, existing orders from Zecotek's OEM partner, as well as other current accounts.

Run-away medical costs from 2010 to 2014 has caused China to take measures to modify the regulatory controls covering medical equipment in its public and private hospitals. The Chinese government uses incentives to encourage domestic hospitals to use Chinese-made medical devices as it looks to stimulate the local market and reduce soaring healthcare costs.

China's medical device market has been growing and is now ranked second largest in the world. The significant growth in the medical device market is due to both an increase in discretionary income and the world's largest aging population. The annual growth of the medical device market has been 20 percent for the past six years and is expected to continue at this pace for the next five years. With the increase in the number of OEMs manufacturing PET scanning devices, Zecotek's management team is focused on becoming a leading supplier of the key components in this market.