Many Western companies are rushing to invest in China following its entry to the World Trade Organisation in December, but Cardia Technologies, a listed company based in Melbourne, has gone against the trend - it has persuaded a Chinese company to invest in its waste-water cleaning technology.
Cardia's chemical-free process is based on electro-coagulation, which removes contaminants from waste water. A private, Hong Kong-based investment company, Tony Technology Holdings, plans to use the technology in the Chinese rare-earths industry.
Tony Technology has invested $2.8 million in Cardia. It has bought 11% of the company for $1.6 million, with an option to move to 13.5% for an additional $400,000. It has also spent $1.2 million to become a 51% shareholder in a joint venture with Cardia to manufacture and distribute the technology in China.
Early this year, Cardia tested its waste-water cleaning technology with Visy Industries and Hatch Engineering in Australia. A meeting in Shenzhen in May between Cardia's executive director, Pat Volpe, and Tony Technology's owner, Yue Sheng Fu, led to commercialisation of the process.
'The issue of pollution has finally become a dominant item on the agenda in China, especially leading up to the Beijing Olympics in 2004,' Volpe says. 'Fu has interests inside China, where there is a need to respond quickly to new pollution regulations. Luckily, we had come up with a new process to clean water that satisfies China's regulations.'
The company was first listed in 1996 as Cardia Mining, a mining technology company, and changed its name to Cardia Technologies in 1998. It lost $1.5 million in the 12 months to June 30, 2001, on revenue of $163,000, compared with a loss of $7.3 million on revenue of $95,000 a year earlier. 'It's a tough time to be a pure technology company but this deal shows we can create new systems in Australia that have worldwide application,' Volpe says. Cardia's shares were trading as high as 18.5 cents in March this year. On August 5, they were 9.6 cents.
Tony Technology plans to use the technology initially at the Tong Li Enterprise Development Company, a rare-earths company owned by Fu in Shaanxi province. Rare earths are used in the production of metals that are used in technology products: yttrium, for example, is used in television screens."
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Lets see some $$$$$ please Pat!!!
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