Ann: Fluence Signs Volume Deal in China & Ivory Coast Update, page-31

@discerningstarter,

You have repeated this USA disappointment line multiple times now and asked why there is such a big focus for some of us on China.

The current state of play is that China has a central government that has mandated that wastewater treatment be invested in heavily and installed almost everywhere, and this message is being repeated at every level. The President keeps repeating it, the National regulatory bodies are repeating it, provincial leaders are repeating it, district leaders are repeating it, company managers are repeating it at staff meetings. It is a mandate and has to be achieved. Because there is no long term history in rural sewage installations, partners can look for cutting edge international technology to install. Look at the success that Fluence is now starting to have, with 3 MABR bulk orders now signed in the last 12 months, and more to come.

The US is a mature market. The wastewater engineers are set in their ways, they have been installing the same type of treatment plants their whole careers, and their is not a lot of incentive to change this. Even if tougher EPA standards are brought in, there are pollution credit loopholes that can be bought, which is easier than mass upgrades. There is not a lot of funding freely available for new plants. If a new technology like MABR (SUBRE) wants to make inroads into the municipal plant upgrade market, you better be prepared for a 3 year testing phase. Unless there is 100% certainty that it will work, none of the municipal operators will want to take the risk and risk legal action.

For an example of the inability to change, read up on lead poisoning in Flint, Michigan, where people literally could not use the water as it was poisoning them, and how long it has taken to fix (and the levels of mistrust it has created).
https://www.nationalgeographic.com/environment/2019/04/flint-water-crisis-fifth-anniversary-flint-river-pollution/
The same thing is now happening in Newark, New Jersey.
https://www.huffingtonpost.com.au/entry/newark-lead-water-contamination_n_5d548d9de4b0d8840fee57c8
For something that is a crisis there is limited funding available and a lack of pro-activeness.
Infrastructure spending in general is poor.

I am not saying that there is no short term opportunity in the US, but there are other countries like China, Jamaica, and the Philippines, where there is more short term opportunity and less competition from the incumbents. As Fluence are not yet profitable, they need to build revenues quickly where there is the most short term opportunity. When Fluence is profitable, it will give them more breathing room to invest more heavily in markets like the US where more marketing investment and long term sales cycles are required.

In the US, we may also need help from Suez and Oxymem/Dow/DuPont to first get established and break down some of the barriers in the municipal retrofit market. While they are doing that we may snag a few smaller Aspiral plants or MABR spiral integration opportunities with shorter sales cycle requirements.