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elleburra

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19/01/19

08:43

Post #: 37162235
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Originally posted by nequalsone: ↑

Hi EB, your post got me thinking about how CGGC's plans for Fluence's MABR/CMABR solutions continue to be a source of speculation. I thought I'd weigh in with my reasoning for believing that the likelihood of the beginnings of a C-MABR rollout by CGGC is more probable than not in the near future...

Firstly, part of an interview recorded two weeks ago with Yang Zhenwu (chairman of the CGGC water company and party secretary) appears below. It reads as though CGGC is in the process of trying to build a brand identify for itself in the ecological recovery/security water space through "the high ground of technology":

Yang Zhenwu : "The water company started late in the water ecology (sic) industry, the scale is not yet big, and it is right not to speak too large. It is necessary to gain a firm foothold in the water industry, develop rapidly, and realize the curve beyond. This requires strengthening technology leadership and fostering the core competitiveness of water technology. Actively prepare to establish a technical institute, introduce, digest, and absorb high-end technology in the water industry, and seize the high ground of technology...In 2018 the company will fully implement our strategic plan .... focusing on achieving by 2020 a water treatment capacity of 20 million tons per day, the company aims to accelerate the pace of development, expand the scale of operations, and improve the quality of operations through research and development of water ecology and wastewater treatment technologies. We plan to initiate five research projects and conduct comprehensive research on water technology. Introduce, implement and popularize applications to enhance the Gezhouba water brand effect.
http://www.cggc.ceec.net.cn/art/2018/4/18/art_7370_1621231.html

And he continued:
"This year, the Water Institute has actively implemented the 'Key Technology R&D and Demonstration Projects for Water Ecology and Environmental Protection In Baiyangdian and Daqing River Basins (Xiong'an New District)' during the “Thirteenth Five-Year Plan” period."

In this comment he is referring to a CGGC Water Institute project found in the government's 2018 Water pollution control and management technology major projects guide.I've attached a link to the document containing all of the project items for 2018. Worth a read for those with the time (it goes into much more detail than what I've laid out here). In the instance above it outlines government regulations, benchmarks and the scope of work required to remediate and develop/secure water sources in the new district of Xiong'an. The initial details are found in their 2017 annual report:

View attachment 1078681
This project is obviously very important as Guo Jian, Secretary of the Chinese Party Committee, travelled to Hubei at the beginning of April to conduct research on its progress:
View attachment 1078684http://www.news.hbu.cn/2018/0412/13791.shtml

I believe that one of the "Key R and D technologies and demo projects" that CGGC had to implement last year to meet government 'technology assessment indicators' for the 2017 stage of the Xiong'an Project was Fleunce's MABR pilot plant in Jingmen City. Why do I think this? The development and promotion of a high-end tech like MABR fits into their strategic business plan and it is the only tech that I can see matching up in all of the official documents. First, a reference to 'developing' MABR technology in CGGC's 2017 annual report appears under "ecological recovery technologies" for the water environment'(picture below). You might infer from the term 'ecological recovery' that any tech used would be solely for remediation of rivers, basins, etc. But the Xiong'an Project also includes a focus on security of wastewater as well:
"Achieve water quality standards. Control source of sewage pollution-control in the river basin.. strengthen the collection and treatment of sewage in towns and villages,"
http://www.ccdi.gov.cn/toutu/201804/t20180421_170377.html

View attachment 1078687
http://www.cggc.ceec.net.cn/module/download/downfile.jsp?filename=1804151058191848411.pdf

Secondly, the paper below, published late last year in the Guangdong Chemical Industry Journal (co-authored by CGGC, Xi'an University and and the Chinese academy of science), labels MABR as a "revolutionary and innovative" and "highly concerned in the water industry." Attributes that CGGC would find highly desirable to align themselves with for their "Gezhouba water brand effect."

However, an important unanswered question is: "Is MABR technology advanced enough for CGGC to consider for larger commercial deployment?" The answer is Yes. The paper I mentioned above lays out the case for it:

View attachment 1078690

The premise for the paper was: "For further investment and development in rural sewage market, Gezhouba Group ( CGGC) conducted field research in the full study of rural sewage treatment technology."

And the result... MABR gets the thumbs up for use in decentralized rural sewage plants: "these three technologies for decentralized wastewater treatment in rural areas have good results, can meet effluent discharge standards and stability requirements, and a practical engineering success stories."

I've attached the CGGC research paper (Chinese and translated version) for your interest.

It becomes apparent after reading these links that:

- Throughout 2017 CGGC had been testing key water technologies for use in the final construction stages in a major government water project in Hubei;

- CGGC is attempting to build its water ecology brand and accelerate and cement its position and market share in the water security/reclamation space by offering high-end technology solutions;

- MABR is one of CGGC's key water technologies - and the only technology that is identified as a key technology both in their recent decentralised rural sewage paper and their annual report. It is also the only technology in the paper that consistently meets the highest class of water standards;

- Fluence's MABR tech. appears to have fulfilled CGGC's Water Research Institute's and the Chinese Academy of Science's decentralised sewage plant requirements: describing it, along with two other approaches, as having good results, meeting effluent discharge standards and stability requirements, and being a practical engineering success story; and

- CGGC is under time pressure to implement its plans to "introduce, implement and popularise" high-end water treatment technology throughout 2018 (to reach a goal of 20 million tonnes per day in 2020).....And what technologies in the water space are defined by CGGC as high-end?

Previously, it has been written that Fluence needs CGGC more than CGGC needs Fluence - due to CGGC's size and leveraging power in being able to 'wait' Fluence out. I think that the landscape has shifted and now CGGC is under both internal and external time pressure to build their brand and deploy innovative technology in the ecology water space; and Fluence is tightening the scews: they now have scores of partners throughout China who they are collaborating with to roll-out the high--tech MABR solution which will directly challenge CGGC's desire to build a "core competitiveness of water technology". The impetus for CGGC to invest is now or the advantage of being known as the company to introduce, implement and popularise this revolutionary technology could be lost to a competitor.

To me, this all smells a bit smokey and leads me to think that the beginnings of a deeper relationship between Fluence and CGGC over the next couple of months is finally going to eventuate and hopefully become apparent to us all. All imo.

Please forgive the inevitable errors that appear above. n1

View attachment 1078696 View attachment 1078699 View attachment 1078702 View attachment 1078705

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nequalsone, amazing research, how do you do it?
This ties into something that was posted on here where Fluence very recently presented to CGGC, I think it was the Fluence China CTO and others doing the presentation. Couldn't really understand why at the time as I thought the relationship was dead.
Maybe with iTEST and CGGC both headquartered in Wuhan and iTEST working toward an exclusive relationship with Fluence for the area CGGC may realise, as you say, that time is running out.

2019 may be quite a year.

regards, EB

FLC Price at posting: 37.0¢ Sentiment: Buy Disclosure: Held
7 Upvote

0 Great analysis

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