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This paper deals with the design and test of a permanent-magnet machine based on a novel modular stator concept. The manufacturing and recycling costs are minimized thanks to the use of composite magnetic materials (plastic bonded magnets, soft magnetic composites). The main properties of composite magnetic materials, from a magnetic and mechanical point of view, are briefly presented in the first part of this paper. After focusing on their thermal properties by detailing a thermal experimental study, the proposed concept of a modular permanent-magnet machine is described. Experimental characterization of the realized prototype, in static and dynamic operating modes, demonstrates its advantages compared with conventional structures.