Fluence Signs First Commercial SUBRE Order in China, page-30

I believe Nirobox's advantage is its small footprint (best in class), fast deployment (best in class), and low running costs (best in class). However, it is more expensive upfront than its competitors, as such BOOT is likely going to be the growth area in this space.

The recent Brazil desalination plant tender was a good example of the hurdles being faced when it comes to Nirobox sales ... Fluence had to choose between putting up a Nirobox solution to the customer or a custom engineered solution. Based on the customer's feedback during the tender process, it was made clear to Fluence that a Nirobox solution was too difficult to compare to all the other supplier's bids (who obviously all offered custom engineered solutions). As such, Fluence chose to compete head to head on the custom engineering solution because a 'off-the-shelf' solution was simply too difficult to comprehend and/or accept as a practical/workable solution to their water needs.

This is going to be a case-by-case proposition with Nirobox... you will have countries where the technology is embraced, like Egypt and/or island countries and resorts where land is scarce and/or require a quick desalination solution. And there will always be those who take longer to adopt new technology.

An interesting comment made by Adam in the Webinar he did with Canaccord. He said that they are bidding for 14/15 BOOT projects at the moment. And if they lowered their criteria for credit risk of their customers, they would be signing up plenty of BOOT projects and the US$50m facility would be used up very quickly. However, they are being very selective and ensuring that the customer's are able to pay for the water over the life of the contract (which can be up to 30 years).

In terms of Aspiral/SUBRE, there is a unique opportunity that essentially drove the merger in 2017. And that is China.

A lot of focus and resources poured into the success of Aspiral/SUBRE in China since the merger in mid 2017 ... and there is a very good reason why Henry keeps reiterating that the largest area for growth in the business is in China.

Incumbent water treatment technology is like a huge boulder that is extremely difficult to displace, however there is evidence that the boulder is shifting. And if Fluence are successful in displacing MBR as the preferred water treatment technology, then the opportunities are mind boggling.

State owned enterprises entering into multi-year purchases (iTEST - Aspiral) and leveraging off the advantages of MABR to achieve their own business growth objectives was an early indicator that we are on the right track. Provincial governments fitting new water treatment plants with MABR (SUBRE) is an indicator that MABR is starting to gain traction in China. Multi-year provincial government contracts for Aspiral will be confirmation that MABR's has been accepted as the replacement for MBR technology.

After that, it will be simply a matter of time before MABR is more widely adopted and becomes the go-to solution for water treatment.