Fluence Interview with Tao Lin
http://www.h2o-china.com/video/view?id=1223
Here is a quick summary of the interview with Fluence’s Chinese Southern Region sales Director Tao Lin. I had some difficulty access the video, but after a few attempts Via VPN in various countries, Taiwan connection seemed to give a satisfactory view. For those not understanding Mandarin, the screen behind Tao showed various operations in China, including production facilities in Changzhou, Yiyang and Panjin, also the Aspiral and SUBRE operations and installed facilities.
1. FLC China is focusing on Village and farming community’s wastewater treatment. There are lots more upside in this market as only about 30% have basic treatment facilities.
2. Aspiral Micro is the new product for 8-10 household.
3. Active in Hunan, Liaoning, Sichuan, Hubei, inner Mongolia and there are more opportunities open up in Northen Jiangsu.
4. China sales target for the year is US$26m, 1H has achieved US$11m.
5. Yangtze River protection scheme has a demo plant in Hunan Yongzhe. Test and verification results should be completed this month end. Looking to getting some jobs in that area.
6. Increasing sales force, in particular, the Northern areas and Shanghai. Sales personnel with 7-10 years’ experience.
7. Bidding for a 55,000 m3 SUBRE project in Hebei.
8. New 20 tons Aspiral Micro is now under R&D targeting launching in a few months’ time.
9. Wastewater treatment in the global rural and farming sector is very low, FLC’s China operation is considered to be around 70-80% of the global activities.
10. FLC plans to expand areas of operation from village, farming and highway, new targets including townships, railway network.
I may have gotten some info wrong here, so would appreciate other contributors for corrections and more input.
**RAMPING ALERT** take this with a large dose of salt and anti-viral.
What Aspiral Micro is so fascinating to me is that if it takes off, we are seeing accelerating volume and recurring sales every 8-10 years. It is kind of similar to a lower cost expendable capital item or a long term consumable.
Assumptions:
1. Useful life of each Micro is 8 to 10 years
2. A 10% of the 400m people in rural areas are adopting Micro in the next 10 years. That is on average 10m households and 10 households to 1 Micro unit. This equates to 1m units or 100k units each year.
3. Gross margin of US$500 per unit
4. No maintenance required, ie no other income from Micro sales. Let’s assume it is an install and throw after 10 years, like our swimming pool salt chlorinating units and the sand filters.
This will give us a recurring gross profit of $50m per year just on the Micros. Other operations will be cream on top.
If this happens, we will need 2 to 3 more lines for production.
Add profit from other SPS and recurring WaaS, some CES contributions, are we on our way to becoming a Multi-billion dollar market cap company?
Add to My Watchlist
What is My Watchlist?
