Fluence Signs First Commercial SUBRE Order in China, page-79

@barry1990

In terms of this agreement, it looks to be another tripartite agreement between the Xinglongtai District Government (Panjin City), partner Liaoning Huahong (who won the first Chinese SUBRE 3000 m3/d plant order) and Fluence.

This is similar to to tripartite agreement in Hunan Province between Yiyang City, partner Hunan Kaitian and Fluence.

This is freshly inked, so there is not very much info around. I'm doing my best to envisage what the overall plan with the limited info I have.

It looks like this is different to the Hunan agreement in that it creates BOTH a production AND an R&D base in Liaoning Province.
Most of the worldwide R&D for MABR gets done at the Fluence Israel base. It is very rare for the temperature to drop below 0 in Israel, so the ability to conduct extreme cold weather R&D is limited. It looks like this agreement will lead to a cold weather R&D base in Liaoning, while also producing cold weather suitable MABR/SUBRE plants for the relevant cold regions of Northern China. It is likely that plants installed in this region need to be modified to deal with extreme cold (minus 20 degrees C). The required equipment can be held at this base and distributed to the Northern Provinces as required. It looks like the initial minimum install agreement will be small, to prove the MABR plants meet requirements in cold weather in Xinglongtai District, then it will be expanded our further into wider Liaoning and surrounding regions as more R&D is conducted.
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@willchang409 found the link to the China Panjin Rural Revitalizaton Industry Expo from 23rd to 25th Sep (http://topco.geekroad.cn/exhibitor/rrie?page=4) for us. Fluence is exhibiting there, and I believe this new agreement may be showcased as part of one of the Panjin Rural Revitilization Models. (Showing government support of local business employment, new technology and a new method of treating sewage and keeping the local environment clean). We may hear more on this over the next 48 hours.

On September 23, 2019 China Panjin Rural Revitalization Industry Expo was opened. The theme of this year's Expo is “Industrial Revitalization, Eco-livability”, which aims to comprehensively display the rural revitalization achievements of Panjin City, build a new concept of rural revitalization, new technologies, new products, and a new model docking platform, and export the “Panjin Model” for rural revitalization.

The main venue of the Expo is located in the Exhibition Center of Panjin City Rural Revitalization Industrial Park with a total exhibition area of 30,000 square meters. At that time, there will be more than 500 well-known enterprises, research institutes, planning and design units and industry associations at home and abroad, and more than 600 countries and provinces. Leaders of municipal and county leaders, industry association leaders, experts and scholars, more than 20,000 people from all walks of life, cadres and people and related industry buyers attended the exhibition.

As the key project and long-term building of the Expo, Panjin Pavilion is the core area for the concentrated display of Panjin Rural Revitalization. The Panjin Pavilion is divided into four exhibition areas, covering the construction achievements of 26 Panzheng Rural Revitalizations in the forefront of the province. The first exhibition area: the industry is booming. Show rice-crab mode, shared agriculture, rural e-commerce, rice and river crab industry chain, smart agriculture, agricultural machinery and equipment, agricultural product quality and safety supervision system, cultural and creative products, rural tourism, etc.; Second exhibition area: ecological livable. Demonstrate rural planning, rural garbage management, rural toilet revolution, rural sewage treatment, rural infrastructure construction, rural public service facilities, rural greening and beautification, rural residential model, etc.; third exhibition area: rural civilization. Showcase the construction of rural cultural facilities, Panjin regional cultural construction, etc.; Fourth exhibition area: comprehensive management. Demonstrate rural grid management, grassroots party building, and peaceful rural construction.

During the Expo, the Rural Industry Development Forum, the Rural Planning and Design Forum, the China Farmers Harvest Festival, and the Panjin City Rural Revitalization Achievements Exhibition were held.

According to reports, since the 19th National Congress of the Communist Party of China, Panjin City has implemented the strategy of rural revitalization as the main task of the "three rural" work in the new era. According to the total of "prosperous industry, ecological livability, rural civilization, effective governance, and prosperous life" It is required to adhere to the priority development of agriculture and rural areas, establish and improve the system and policy system for the integration of urban and rural development, and accelerate the overall revitalization of the rural areas and the all-round revitalization.
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We were told that Fluence has expanded out to a full 3 shift operation for their one production line at Changzhou (Jiangsu). This is to meet current demand and build up MABR module inventory for shipping to the new production facilities once they are operational late in the year. This 3 shift production can be scaled down again in future if less production is required to meet demand at all sites. In spirals alone, full production should be around $75m USD over the course of 12 months. However, depending what configuration they are sold in, this amount can increase rapidly, as in Aspirals, other parts and equipment is incorporated that can double revenue, but lower profit margins. The additional equipment like clarifiers, ultra-filtration modules and UV treatment can also add in additional revenue into the mix. SUBRE greenfield plants also add in additional custom engineering fees as well as larger scale equipment requirements. So really, full production can lead to anything from $75m USD to $200m USD depending on the mix of modules/plants sold, and also the type of partner and region they are sold into.

So from my current understanding:

Changzhou (Jiangsu) is the MABR module manufacturing hub, but also currently needs the ability to produce all other Aspiral/SUBRE plants as it is the main export hub.

Yiyang (Hunan) was specified as an Aspiral L4 container production hub. Hunan Kaitian will look to use L4's in Hunan, also iTEST use L4's in Hubei Province which is located above Hunan. They will use this as a base to supply the Southern and Western provinces once more partners in those regions win orders.

Xinglongtai (Liaoning) will develop cold weather suitable plants, and supply the relevant cold weather provinces in the North, while also acting as a cold weather R&D base.

There may also be a "surprise" announcement in late Oct/Nov of a new module that may change things up a bit, but I will not go into detail on this unless it is announced.