Ann: Agreement for anticipated Aspiral China sales approx USD45M, page-187

@Dungiven

iTEST have been fantastic, as they are using MABR as a business opportunity to grow their credentials as an environmental company, and are first using their self-owned service area and toll station install base to generate pilots and treatment plant remediation experience. Because they are using this as a tool to promote their business, they have been communicating a lot about it in great detail, while there has also been newspaper and television coverage. This is a rare insight into each step of business growth for us to follow, it is vary rare to see this much detail from a non-listed private company. I'd even go as far to say as I have seen more detail from the iTEST and MABR partnership than I have out of some ASX listed companies.

Imagine where we would have been now, if it had not been for iTEST.
Remember that this is outside of the original scope of rural village sewage treatment, we are only more recently starting to see some movement from Zhejiang Tiandi and Hunan Kaitian after a fast start from Jiangsu Jinzi in Guizhou.

CGGC were too brash with their claims in the initial talks with Emefcy regarding a possible 10,000 to 60,000 modules.
This may have also been testing the boundaries of what Emefcy would do to win their partnership, (open a factory in Wuhan, transfer ownership of technology) and whether they could buy a stake in the company.
Partnership with Emefcy/Fluence aside, in the time since, I don't think CGGC have had nearly the success they envisaged in the rural village sewage space, in fact, last year they had changed their tune and were saying that the rural village sewage industry was still in an "introduction or germination period"


This admittance backs up many other reports and opinions that I have read that it is difficult for single companies to straddle provincial lines to win rural village sewage business, as each province is still in the process of formulating regulations and then testing different treatment types that fit within those regulations, which may take a number of years. As a larger entity trying to win bulk orders of 100+ installs at a time, I believe CGGC struggled to be as adaptable as required. They also have many other areas of focus where they have less competition and can earn more with each single contract win. Rural sewage is a lot of work for small margins. Zhejiang province started their village sewage reform early in 2010, and now that they have the data from those initial installs, are going to invest again for Round 2 to fix all the problems they found first time around. What Zhejiang does is being watched by many other provinces and once their regulations are set other provinces will adopt a similar approach.

As an equipment supplier and partner to localized provincial companies, Fluence and their partners can adapt the solution to adapt to local tastes, but they appear to be at times struggling on the initial price hurdle, but then can find wins where stringent standards are required and subsequent costs of maintenance are taken into account. You will find that each individual partner has their own design of treatment plant and the process flow is slightly different.

I have read recently that CGGC may have made some changes to their water division and now may be more focused on buying existing larger-sized assets to manage, instead of looking for small builds.

As investors, we watch the share price fluctuate by the minute/hour/day/week/month and this can often be an emotional journey. However, for Fluence management, they are trying to build a sustainable business, and the meetings and partners they are engaging with today, may not be noticed by us until a few months or years later. Having dived quite deep into researching the many business units of Fluence worldwide and the opportunities they are generating, I have concluded that they are really hitting above their weight on multiple fronts, and while we may not see this reflected in the share price today, eventually the market will not be able to ignore the business that is being generated.