Wheres can this UPI article be found that everyone keeps referring to??
The Drudge report times out.
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Announcement from ERM has made my day. :)
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@Kurt12312
Strange first post here, but I'll give you the benefit of the doubt and spend a bit of time replying.
Cambodia has been one of the fastest growing economies in the world over the last 20 years.
They went backwards in 2020 but are forecast to grow again for 2021 and 2022. The economy seems to be doing alright considering the lack of tourism and C19 lockdowns. But from a GDP per capita PPP perspective they are about 1/4 of the world average so are indeed a very poor country.
Since in general they are a poor country, is it not an even bigger achievement for Fluence to have received 2 orders for 3 SUBRE plants worth approx US $14 million (AUD $18.87 million) combined? Wastewater is such a concern that of the US $140 million in concessions that China gave to Cambodia as part of the 2020/21 Free Trade Agreement, they used 10% on the first 2 wastewater plants and sewage network in Sihanoukville. They realize that without this they can not grow tourism in their coastal region that is vital to providing economic growth in the future for the whole country.
With the successful build of the first 2 wastewater treatment plants, PS1 (5200 m3/d) and PS2 (7200 m3/d) in Sihanoukville, the Cambodian government has now mandated that all new buildings and housing developments have to incorporate sewage treatment in their Sihanoukville Vision 2038 Masterplan. They raised money from land sales for more coastal tourism development (Ream City) to one of the largest conglomerates in Cambodia - Prince Holding Group/Canopy Sands to build the US $20 million PS3 wastewater plant (20,000 m3/d) of which Fluence will receive US $8.5 million for their SUBRE modules.
Cambodia is doing a smart thing here, they invited all the richest land and real estate developers in Cambodia to Sihanoukville to view both PS1 & PS2 and to the PS3 opening ceremony. Then they have now mandated that all these developers need to incorporate these same plants into all their future planning and designs. The old adage that the top 1% own more wealth than the bottom 90%. Well those top 1% in Cambodia that own all the major businesses now get to pay for all the new sewage treatment systems that have to go in across Cambodia. The government will sell them land and approve their projects happily, if they comply with the simple task of building sewage treatment. It is in the best interests of the land developers too. The more tourists that come and stay, the more money is spent at their businesses. If wealth grows within the population then the middle class can afford to spend more money on the houses in new developments.
On the bottom left of this map I have marked the 3 locations of the sewage treatment plants that X-Water and Fluence are involved in.
Can you see any further opportunities for expansion into the rest of Cambodia, if all the major land developers are on board with building sewage treatment into their developments? Fluence have just signed an exclusive distribution deal with X-Water, who are based in the capital Phnom Penh. X-Water seems to think there is more opportunity for growth too.
Then if you look at the context of that within the Mekong Delta countries including China working together to protect the Mekong Delta watershed, can you see any further opportunity within the Mekong Delta and coastal regions?
It may sound like fanciful thinking, until you consider that the Philippines is doing the same thing, and that the largest conglomerate + water company Alaya Land + Manila Water are the partners of Fluence.
6 containerized MABR plants and 2 larger SUBRE plants, plus 2 Nirobox desal plants in the Philippines.
The opportunity in the Philippines is also growing.
Then if you consider that a fluke, then in Jamaica, the National Housing Trust, the government run national housing developer is also building Fluence SUBRE plants at all their new housing developments. There are currently 3 being built, with another plant completed at Port Royal for the cruise ship terminal and nearby township.
So there is a bit of a theme with "poorer" countries that have not traditionally had any sewage treatment plants now mandating that housing developers and businesses need to stop polluting waterways and start building decentralized wastewater treatment plants. This is then user pays, if the housing developers want to build houses, they have to build sewage treatment as well. The residents who move in can pay for the upkeep of the plants. Because these are poorer nations, then the O&M burden of these wastewater plants needs to be as low as possible, so that the rates for the people living there are as low as possible. Which is why Fluence MABR keeps getting chosen in these locations, because it has one of the best combinations of low O&M, long life, and high quality effluent which can be safely discharged to the environment.
Then, because this is the China thread, we have China. Fluence MABR was recognized with a nomination in the Global Water Intelligence's Global Water Award for Wastewater Project of the Year 2020 for the Hubei ITEST Decentralized Treatment project. There are partnerships with China Rail, 3 Gorges Group and now Beijing Enterprises Water Group. There are over 40 partnerships in China, many of them with giant state owned enterprises.
Then in the USA, Fluence have sold 10 MABR plants, including to the US Department of Agriculture. These are small sales, but at least they have been growing.
There is no doubt that most investors of Fluence (who are mostly based in the US and Australia) would love a higher proportion of the business to be based where we can see it, in the US and Australia. But China and SE Asia have current government mandates to install more sewage treatment plants, which means that investment funding is available and the doors are open for Fluence to have opportunities for partnerships and sales. Because these countries have not traditionally had a lot of decentralized sewage treatment systems, there is less competition, so Fluence can stand out more.
In "richer" countries like the US and Australia, there are a lot of incumbent, well established sewage treatment companies. There is little incentive for the market to adopt new technologies quickly, so the market is slow to adapt. Because there is established infrastructure, the market in general favours large, centralized sewage treatment plants, much bigger than what Fluence is capable of building.
This is also the issue in the middle east oil rich nations, with the added caveat that electricity is cheap in these nations due to the abundance of oil and gas for power generation. One of the biggest reasons for MABR being chosen over other types of treatment technologies is power savings. If Qatar is paying 1/8 of the cost of power that we do in Australia, then MABR power savings would not be a major consideration. These nations also have the money to invest in mega-projects, which are outside the scope of Fluence to be involved in.
That being said, there was an MOU signed with UAE based Clear Water/Al Shirawi Group for exploration of opportunities in that region, so in future we may see something come from that.
https://www.israelgulfreport.com/post/israel-s-fluence-foresees-wastewater-solutions-for-the-uae-and-region
I highlight Cambodia because if Fluence can do well in Cambodia even with their low GDP, imagine the opportunities in countries with a higher GDP that can afford to spend more on infrastructure. Cambodia has shown that Fluence SUBRE can be built up to large sizes of 20,000 m3/d in strange locations over rivers or on the beach. If you can build SUBRE plants there then you can build them just about anywhere. SUBRE is also the Fluence product with the highest profit margins.
This penny stock on the ASX with market cap of AUD $125 million is able to sign deals for:
AUD $258 million - Ivory Coast drinking water plant. (excluding further O&M contract).
AUD $60 million - iTEST Hubei China Highway MABR decentralized sewage treatment.
AUD $41.5 million - Egypt desalination plants.
AUD $18.87 million - Cambodian SUBRE plants.
AUD $13.4 million - Brazilian steelworks desalination plant.
AUD $11 million - Argentinian lithium mining water processing plants.
Plus additional deals in Israel, Italy, Argentina, Ethiopia, Ecuador, Peru, the Philippines, the UAE, the USA, Taiwan, Vietnam, Jamaica, the Bahamas with China currently the largest market of opportunity.
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