Be Cautious, page-27

I can't comment on how many companies around the world use the Continuous Ion Exchange technology for resource recovery, but it's worth taking on board what the former CEO had to say about it in the Switzer interview we've talked on and off about since the video of it emerged online last year.

'I think what differentiates us is we've been able to develop the technology so that it's probably 30% more cost effective than our competitors.'

'Being 30% cheaper means that we can extract value, and large value from projects that perhaps are of no value to other people.'

'Continuous Ion Exchange is the process that we use. The technology was bought by Peter Voigt from the All Russian Research Institute of Chemical Technology. The technology has been used in Russia for 50 years.'

'With regards to water, it's ready now and probably only been ready for 12 months or thereabouts.'

The ex-CEO then went on to talk about how no companies are yet using the technology and that CLQ itself had developed the Continuous Ion Exchange technology specifically for water.

I took from that, that this is a world-first. They developed the technology that otherwise wouldn't exist so there are, as of this moment, no competitors that can do what CLQ can in the water space, hence the Chinese interest. Everything else has failed for them, but along comes a small Australian company with perhaps the answer to some, if not all of their problems so it's no wonder there is such strong interest from SIDRI in what CLQ might have to offer them and China as a whole.

That's not to say there won't be competition in the future, but as things stand CLQ are in a sweet spot. They just have to commercialise this technology whilst they still have first mover advantage, something that is easier said than done, but something that offers shareholders a hell of a lot of upside should they pull it off via the JV with SIDRI.

As for the Air Purification business, CLQ claim on their website that 'Our biological approach to air pollution control provides the most cost effective means of odour and VOC abatement and minimises the environmental impact when compared to traditional chemical and adsorption methods.'

All three technology platforms (Resource Recovery, Water Treatment and Air Purification) that CLQ have deal with four of the top ten Trends in 2015 as highlighted by the World Economic Forum. These are 'Rising pollution in the developing world', 'the increasing occurrence of severe weather events', 'increasing water stress', and 'the growing importance of health in the economy'.

I expect 2015 to be a huge year for CLQ, but as big as it will be, it will be even bigger in 2016 and beyond as this is just the beginning.