Media Update, page-72

All about relationships, large and small. Drawing comparisons between the development of the MBR market in China from its pilot plant infancy in 2004 (much like the MABR demonstration and pilot plant phase in 2017) to the rumblings of the US$400m pa behemoth industry it became in 2012 might prove useful in forecasting opportunities and challenges for Fluence in today's MABR space. One of the key impediments to initial widespread MBR adoption, flagged by the MBR industry in 2004, was to be the slow uptake of MBR due to uncertainty about the technology (as well as negative perceptions of water reuse): a perception held by various stakeholders, including the public, the politicians and decision makers within procuring organisations. Fleunce's management appears to have learned quiet a bit from these early MBR plays in China (I'll post some further information when I get time to explain thoughts on this and hopefully answer some of your questions @barry1990.) From high level diplomatic ties (as highlighted above by @willchang409) to positive opinions of MABR technology expressed by the general public and reported in the local press (see newspaper article below) it appears as if Fluence are building the relationships required to counter these expected indifferent perceptions and hopefully build on their current momentum in the Chinese provinces.

<sub>Sound mechanism to control sewage (Article Published Nov. 21)
In their leisure time, the villagers of Taiping Village, Lilou Town, Luolong District are more and more fond of going out. Why? The surrounding environment is good! Now, stroll through the village, all the creeks are clear and the streets and alleys are clean. The villagers said: "The water in this piece is quite awkward and the smell is not good. Now there is ‘high-tech’, the water is clear, and there is no smell...”

The “high-tech” in the mouth of the villagers refers to the domestic sewage treatment project that has just been built and used in the village. Its scientific name is called “Application of MABR Membrane Aeration Bioreactor Technology Integrated Township Domestic Sewage Treatment Plant”, and the designed sewage treatment scale is 300 tons per day. The “black water”, which is originally polluted and smelly, can be treated to a Class A standard, and then can be directly discharged into Luohe or used as irrigation water, and the decomposed waste can be used as fertilizer.

When the environment is not beautiful, the key is to look at the water first. In conjunction with the city's “Four Rivers Tongzhi and Three Canals Linkage” work deployment, Luolong District strengthened the sewage treatment from this mechanism, took the lead in setting up the global sewage treatment office, the main leadership of the district government as the office director, and the deputy county-level leader in charge of environmental pollution. Deputy Director, the main responsible persons of finance, housing construction, agriculture, forestry, water conservancy and other related functional departments are members, strengthen daily coordination, strengthen planning and guidance, formulate work plans, and promote all levels of departments and units to implement water pollution prevention and environmental protection duties.

Luolong District has also issued the "Luolong District 2018 Water Pollution Prevention and Control Battle Plan", "Luolong District Surface Water Responsibility Target Section Environmental Protection and Remediation Work Implementation Plan", Long District water pollution prevention and control battle in 2018 rural". A series of work plans and work systems, such as the “Environmental Comprehensive Rehabilitation Schedule”, “Luolong District 2018 Urban Area Sewage Discharge (Point) Closing Task List”, gives clear work rules, transfer work pressure, and promotes work implementation.

Up to now, Luolong District has invested more than 100 million yuan to vigorously promote the construction of the global water environment management projects. After the completion of the project, 7 towns including Lilou Town, Anle Town, Baimasi Town, Longmen Sub-district Office, Guanlin Sub-district Office, Taikang East Road Sub-district Office, and Science and Technology Park Sub-district Office as well as 84 villages (communities) in the area will present a new water ecology.</sub>



The Luolong Town plant is part of a broader long-term cooperation agreement between Fluence and QSY (which follows a memorandum of understanding (MoU) entered into in May 2017). The agreement was aimed at promoting Fluence's MABR tech. and establish a close strategic cooperation relationship with QSY covering the Xinjiang, Henan and Sichuan Provinces, and other areas in China. Slowly, slowly the tide of strengthening public perceptions and positive press coverage will be a harbinger of growing sales momentum (if we believe in the MBR playbook, and management's execution skills).