Its hard work this market and false report's by journo's dont help investors at all.
One bit of advise to the not so experienced investors which i learnt the hard way...re.....ONE<< Research your investment as much as you can.
Dont be afraid to call the company and CEO's to find out information on any problems you have.
Dont take too much notice of these forums for advise, some guys here are an exception. ( you will know who these guys are through hours of reading and watching stocks)
And in the end, back yourself if you feel you have done as much research as you can and you understand the investment you have made.
Here's the open briefing on ESI.............................
Open Briefing ESI CEO on ENERSLUDGE Technology
ENVIRONMENTAL SOLUTIONS INTERNATIONAL LI 2002-05-15 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++ corporatefile.com.au
Environmental Solutions International Limited's share price fell nearly 10 percent yesterday following a press report raising concerns about the ENERSLUDGE(TM) treatment plant in WA. What has been the performance of the Perth based ENERSLUDGE(TM) plant? Is the technology failing to perform?
CEO DENIS GLENNON
The technology is robust and very flexible. ESI has proved the process in Western Australia. Disappointingly there were some misconceptions and inaccuracies in yesterday's press report. Understandably, the unfortunate headline and some of the comments unsettled the market. I trust the following will clarify matters.
The Subiaco Waste Water Treatment plant is one of Perth's 3 main sewage processing facilities. The plant's catchment area is the CBD and west of the city. The plant currently produces approximately 600 tonnes per day of wet sludge for disposal and further processing and this is forecast to rise to 800 tonnes per day by 2040.
In 1996, the existing facilities at Subiaco for processing of this wet sludge needed upgrading and, following an extensive review of options including thorough evaluations by independent consultants, a contract was let to the ESI/ Clough JV to build a new sludge processing facility. Included as part of the contract was ESI's patented oil-from-sludge technology.
The plant now constructed consists of a number of components and provides the Water Corporation with a variety of possible operating modes to process over one quarter of Perth's sludge such as:
Dewatering of the sludge to a 'wet cake' for lime stabilisation prior to disposal off-site in emergencies, maintenance shutdown periods, etc.
Dewatering and drying of all the sludge to dry pellets for use on site as a fuel, or disposal off-site. The large amounts of thermal energy required to dry the sludge can either be supplied from fossil fuels or recovered from the process itself - the latter is the current mode of operation.
Dewatering, drying, energy recover and conversion of all the sludge to oil and other products.
The wet sludge dewatering and drying equipment were commissioned in May 1998 and have been processing all the wet sludge produced by the operations of the Subiaco wastewater treatment plant since then. The hot gas generator used for energy recovery was commissioned in December 2000 and has performed to target since that time.
The dried sludge-to-oil conversion equipment was commissioned in April 2001 and was operated by ESI/Clough Joint Venture for 9 months during which time it demonstrated it has the capacity to process all of the dried solids from the upstream plant. All of the oil produced to date (over 300 tonnes) has been used off-site to generate steam at industrial facilities without problems.
The whole plant (dewatering plant, the dryer, hot gas generator and conversion plant) was constructed and commissioning in phases, and has met all contractual performance tests.
The new facility has thus provided the Water Corporation with more cost effective, environmentally friendly and flexible treatment options for wet sludge than existed before the plant was constructed.
Approximately 100 tonnes of wet sludge cake per day, is no longer trucked through Perth, or over long distances to be disposed to landfill. It can be either dried and beneficially reused as fertiliser supplement (with all the energy for drying provided by the process itself) or converted into oil.
When the plant is operated in conversion mode, only 4 tonnes per day of by-product leaves the site (1 tonne of ash and 3 tonnes of oil), ie a 25-fold reduction in both sludge volume and truck movements.
At present, the dried sludge-to-oil conversion equipment is not being operated. It is more economical to operate the plant in the energy recovery (ie autogenous drying) mode and to beneficially use the dried sludge on land, than convert it to oil for off-site use.
Whilst this option is the most economic for the time being for Perth sludge, it is fair to say that in Europe and North America, the economics are significantly different. In Europe and North America, dried-sludge to oil and off-site use of oil or generation of electricity on site would be the preferred operating mode by far.
When the contract was originally let by the Water Corporation, it was intended that the oil produced from the conversion equipment would be used as a supplementary fuel for the stand-by diesel engines on-site driving the upstream wastewater treatment plant air blowers. Water Corporation subsequently decided not to adopt this option and hence ESI and the Water Corporation are now pursuing the installation of a separate oil-to-electricity unit on site. When this is installed, it will change the economics of how the plant is run and the sludge-to-oil conversion equipment which, represented less than 10 per cent of the original contract value of the overall plant, should be the preferred mode of operation.
ESI-Clough and the Water Corporation are also reviewing the design, operations and maintenance parameters of this "world-first" prototype plant. ESI continues to have access to the plant for marketing purposes offshore and the gathering of valuable operational data.
corporatefile.com.au
Does the current operation of the Perth plant in autogenous drying mode have any negative financial impact on ESI?
CEO DENIS GLENNON
None whatsoever on ESI or on the ESI/Clough joint venture.
corporatefile.com.au
Does ESI continue to have a reasonably strong cash position and what is the outlook for the June 2002 profit?
CEO DENIS GLENNON
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.
corporatefile.com.au
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?
CEO DENIS GLENNON
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.
corporatefile.com.au
What would be ESI's participation in European ENERSLUDGE(TM) projects?
CEO DENIS GLENNON
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.
corporatefile.com.au
What advantages do you hope to gain through licensee and partner companies?
CEO DENIS GLENNON
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.
corporatefile.com.au
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?
CEO DENIS GLENNON
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.
corporatefile.com.au
What progress has been made in marketing ENERSLUDGE(TM) in the USA?
CEO DENIS GLENNON
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.
corporatefile.com.au
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?
CEO DENIS GLENNON
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.
corporatefile.com.au
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?
CEO DENIS GLENNON
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 month.
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.
corporatefile.com.au
Thank you Denis.
For previous ESI Open Briefings visit www.corporatefile.com.au
For further information on ESI visit www.environ.com.au
ESI Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held