Richard has got the buy-in with Ron Lauder and the staff with the change of CEO. On the question of management depth in China, he said when they started 4 years ago, they wondered whether they could ever find the right people. But now, for sure, he has found the team that has the perfect blend of attention, discipline, and adherence to western governance standards, yet aggressive in pursuit of market opportunities.
$7m costs of restructuring is worst case, spread over a few quarters.
Does not see a need to expand current manufacturing capacity in China just yet. One line can support US$75m to $100m in revenues. Cost of expanding new line is inexpensive relative to the revenue that can be generated. But if they are able snare one volume order from a National SOE, that might be a need to increase capacity. Mentioned that working with National SOEs like China Railway and 3Gorges is a huge deal in that they could generate the volume orders, plus be an endorsement of MABR to the rest of the country.
MABR is seen as Israeli technology. China loves Israeli technology to the extent that they put both flags at the industrial estate where manufacturing plant is located. Not affected by the worsening Australia China ties.
Mentioned that they are not shutting down other global units but asking them to focus on setting up channel partners.
Middle East desalination opportunities plus MABR in China are where the SPS growth will come from.
Ended with he's never been more optimistic of the company's prospects and future than now..
FLC Price at posting:
28.0¢ Sentiment: Buy Disclosure: Held
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