ECT 5.00% 2.1¢ environmental clean technologies limited.

ESI----take note of brief.

  1. 5,609 Posts.
    Have another read of this briefing below.

    ESI's partner to be is very big in Europe.

    I feel i konw who it is.

    The 2 will push this Enersludge technology rapidly and ESI will finally start seeing the rewards of alot of hard work.

    The big European player see's the potential of the Enersludge and has taken it up as fast as it could.

    This wont be the last.

    Look for more big news in July.

    Will not give away too much.

    Finally its all coming to togeather for ESI.


    Open Briefing ESI CEO on ENERSLUDGE Technology

    Does the current operation of the Perth plant in autogenous drying
    mode have any negative financial impact on ESI?


    None whatsoever on ESI or on the ESI/Clough joint venture.

    Does ESI continue to have a reasonably strong cash position and what
    is the outlook for the June 2002 profit?


    Our cash position remains very strong and the profit result will be
    in line with our expectations. Our cash reserves and growth are being
    managed prudently. We continue to generate strong cash flows from the
    water and wastewater treatment market and we're making good progress
    with our efforts to commercialise the ENERSLUDGE(TM) technology in
    international markets.

    ESI recently reported (February 27) discussions with some European
    groups regarding licensing the ENERSLUDGE(TM) technology. What is the
    status of these discussions and could they lead to the
    commercialisation of the ENERSLUDGE(TM) technology in Europe?


    I am now confident ESI will sign its first licence agreement for a
    territory in Europe, with a very significant player in the water
    industry, before 30 June 2002.

    ESI has been involved in technical and commercial due diligence
    discussions with this European based, worldwide water company since
    August 2001. The due diligence has involved a substantial amount of
    information transfer (technical and economic) from ESI, visits to the
    Western Australian plant and reciprocal visits to Europe.

    The most recent discussions in Europe (in late April 2002) have
    concluded that ESI's ENERSLUDGE(TM) technology is capable of
    providing a sustainable thermal solution for sludge treatment in many
    countries in Europe, and, that it is commercially competitive in
    markets where land based disposal options are banned or diminishing.

    This outcome represents a significant step forward, and ESI has moved
    much closer to establishing the necessary first "flagship" commercial
    scale plant in Europe.

    Also, ESI is in negotiations with another large
    engineering/construction/infra-structure group regarding a licence
    agreement for the UK and Irish markets. These negotiations are less
    advanced than the former.

    What would be ESI's participation in European ENERSLUDGE(TM)


    ESI's participation in European ENERSLUDGE(TM) plants will be the
    supply of technology packages through licensees into projects.
    Typically these technology packages will include the intellectual
    property related components, ie conversion reactors, condensing,
    oil-water separators, process control system, and in some instances
    other equipment. ESI will of course, provide all of the process
    design for the initial plants.

    What advantages do you hope to gain through licensee and partner


    ESI's strategy is to market the ENERSLUDGE(TM) technology through
    licensees/partner companies. This strategy allows ESI to partner with
    selected local companies that are already strong players in the
    water/ wastewater/sludge markets in the territories covered by the
    individual licensees.

    The major marketing costs in each territory will be met by licensees
    as will the majority of tendering costs for specific projects. The
    advantages to ESI include more immediate sales, cost effective access
    to market intelligence, knowledge on local environmental regulatory
    requirements, detailed engineering expertise to meet country specific
    standards, procurement know-how in new markets, construction
    expertise, presence of larger corporate balance sheets when bidding
    projects, to mention a few.

    The other advantages are the payment by licensees of upfront licence
    fees to ESI, plus royalties from ENERSLUDGE(TM) plants built by
    licensees and ESI in each territory.

    Late last year you expressed some disappointment with the pace of
    progress in commercialising the ENERSLUDGE(TM) technology in Japan.
    What plans do you have to hasten progress in Japan?


    ESI entered into an exclusive licence arrangement with Mitsubishi
    Electric Corporation for the territory of Japan. Progress by
    Mitsubishi has been slower than I would have liked in commercialising
    the technology. I visited Mitsubishi some weeks ago and now better
    understand why this is the case.

    To hasten progress in Japan, ESI has reached agreement with
    Mitsubishi to amend its licence to a non-exclusive one. ESI will
    continue to have access to Mitsubishi's technology improvements on a
    worldwide royalty fee basis.

    Furthermore ESI has briefed, and, subject to final agreement on scope
    of contract, will engage a Japanese entity experienced in arranging
    licensing arrangements between Japanese and foreign companies to work
    with ESI to select other licensees for the technology. This time
    ESI's focus will be on selecting Japanese companies that are
    currently active in the water and sludge business in Japan and not
    necessarily on large trading houses such as Mitsubishi. This work
    will take about 3 months to complete.

    What progress has been made in marketing ENERSLUDGE(TM) in the USA?


    Because of our focus in Europe, progress in the USA has been confined
    to identifying suitable potential licensees. The initial
    identification of potential partners has been completed and we have
    provided initial packages of information on the technology to them.
    The European experience of securing good licensees indicates it takes
    6 to 9 months to complete the necessary technical and commercial due
    diligence, hence we will see the appointment of US licensees only
    after 30 June this year.

    In February 2001, ESI was awarded a contract to provide three water
    treatment plants for the Douglas Shire Council in Far North
    Queensland. The contract value was about $12 million. What progress
    has been made on this project?


    Construction of the 3 plants is proceeding very satisfactorily and we
    anticipate completion of construction of the first plant in August
    2002. The reservoir at the largest plant in Mossman is essentially
    complete. The plant building is under construction and will be
    completed in about 6 weeks. Mechanical installation at all plants is
    progressing to schedule and to budget. These being ESI first membrane
    plants, construction of all are proceeding remarkably well.

    How do you envisage ESI developing? Can you continue to grow revenue
    in the water/wastewater treatment market while also trying to
    commercialise the ENERSLUDGE(TM) technology? What is the priority?


    I believe we can continue to generate good revenue from the water/
    wastewater market. We staffed up the water group this year and
    already new potable water contracts have been won in Australia. I
    expect we should be in a position to announce at least one additional
    contract before 30 June 2002. The relatively new process control
    group continues to generate revenue and this should increase. ESI has
    agreed to the execution of an Integrated Systems Provider Agreement
    with Siemens Ltd, more details of which I expect to announce next

    To date, ESI's cash flow has been generated by our continued success
    in the water/wastewater market. This revenue has allowed the company
    to remain net debt free and fund the commercialisation of
    ENERSLUDGE(TM). At this stage I don't see this scenario changing.

    Thank you Denis.

    For previous ESI Open Briefings visit

    For further information on ESI visit

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