Water. Desalination + reuse
Issue link: https://fhpublishing.uberflip.com/i/867173
10 Interview September 2017 Water. desalination + reuse ates around 1,000 wastewater treatment plants in China. A second demo plant, CGGC INV, in partnership with China Gezhouba Group Investment Co. (CGGC), is installed and poised for commissioning. Emefcy anticipates signing a long-term agreement for sale of 10,000 MABR modules to CGGC, and plans to build a dedicated production line in Hubei Province to support this deployment. This new facil- ity is in addition to another production facility in Chang- zhou that is currently in the commissioning phase, and is expected to become operational in late Q3 2017. A third demo plant, Sinorichen, in partnership with SOE Beijing Sinorichen Environmental Protection Corp., is installed at a site just outside of Beijing and awaits com- missioning. The site is strategically important because the province surrounding Beijing City is subject to some of China's strictest standards for wastewater treatment and is seen as a model for the rest of the country. The size of the opportunity in Beijing province is estimated at A$75 million ($60 million), and up to A$1.3 billion ($1 billion) in adjacent provinces. Finally Wuxi demo plant, installed in January 2017, continues to be an important reference site for prospective distributors of Emefcy's MABR product in China, and is performing to design specifications, the company reports. Global sales platform Yet while China is big focus, particularly for the newly inte- grated MABR technology side of the business, Charrabé is also keeping his eyes on developments in the rest of the world. "Although it's an enormous opportunity, I would cau- tion the company and everybody that this is not the only one, right? We continue to grow the legacy business outside of China, and we are really the covering the whole gamut, whether food and beverage, oil and gas, municipality, or a power plant," he says. The newly created Fluence will continue to "strengthen our footprint where we are right now, especially Europe, Latin America, North America, and even Africa, with decentralised seawater RO systems." The company's ser- vices cover the full range from project consultancy, through design, construction, operations, maintenance, and moni- toring, to tailored financing including build-own-transfer arrangements, and operating leases; and the combined group has "considerable experience in structuring and operating water assets under a recurring revenue business model," explains an investor presentation about the deal. The business boasts clients in 70 countries, with more than 7,000 references, as well as 300 "highly trained water professionals" on staff. It has a head office in New York, US, and sales offices in Argentina, Brazil, Colombia, Dubai, France, Mexico, Minneapolis, US, and more recently, China as well. "That's the sales platform through which we will continue to push the legacy products, and now of course also MABR," says Charrabé. These proven technologies include RWL Water's Nirobox, a decentralised, 40-foot containerised desalination RO sys- tem, general membrane-based seawater desalination and brackish water treatment systems; and anaerobic digestion based out of Italy. "Especially for the food and beverage industry, that is a very good technology that we deploy all over the world. And our packaged wastewater treatment sys- tems, including aeration, and folding that into the MABR portfolio," says Charrabé. "Every client who needs a fresh- water system will also need a wastewater treatment system." Laser-like focus The Emefcy team will become the product innovation heart of the organisation, and are currently working on "several new products and technologies that we are going to bring to the market," says Charrabé. "They are working on improve- ments to MABR and a new system called Subrer, which is basically submerged MABR technology suitable for retrofit of larger wastewater treatment plants." Does this imply a potential to move up the scale into larger size projects? Any such ambition, if it does exist, is not likely to be realised in the immediate future. Charrabé's laser-like focus for the business today is on delivery of high-volume, packaged plants for the mid-mar- ket, and rapid deployment of MABRs. "Any industries or municipalities located in remote areas where it's difficult to access centralised systems, or in areas where you have very old infrastructure, and you have a lot of non-revenue water seeping through, you can use our decentralised systems. So, remote areas, industries that are in water scarce areas, that need access to freshwater or wastewater treatment, those are where we want to focus." Fluence shareholdings Enterprise value is $85 million RWL Water shareholders will receive 100.5 million new Emefcy shares, representing 28.1 per cent of the new company; and a cash payment of $10,000. Additionally, there is a private placement of $20 million of shares to entities affiliated with investor Ronald Lauder. The deal implies an enterprise value of $85 million for Fluence. n Existing Emefcy shares n RWL Water shareholders n Ronald Lauder 66% 25.8% 8.2% Chinese distribution partners Fluence has signed integrator partner agreements with nine Chinese state-owned entities, through which it aims to rollout its MABR technology for applications in rural wastewater reuse Partner Description Market coverage/ location China Gezhouba Group Corp (CGGC) One of China's largest construction and engineering companies Wuhan, Hubei Wuxi Municipal Design Institute State-owned provider of environmental protection services Wuxi City, Jiangu province Sinorichen Wastewater treatment consulting and engineering Beijing Province, Northern China Jiangsu Jinzi Environmental Technology Co Design, build and operation of wastewater treatment systems Central and southern provinces Tianjin Caring Co Subsidiary of Shanghai and Hong Kong stock exchange-listed Tianjin Capital Environmental Protection Group Shandong, Anhui, Yunnan, Guizhou, Hebei, Shaanxi Zhejiang Tiandi Part of Zhejiang Provincial Energy Group Zhejiang province Shanghai Winner Systems integrator Shanghai-based Qingshuiyuan Environmental Technology Subsidiary of Henan Quingshuiyuan Technology Jiyuan-based