Environmental management enabler Envirosuite (ASX: EVS) has made an instant impact in China after signing its second strategic cooperation agreement in as many weeks.
The company’s proprietary platform provides a range of environmental monitoring, management and investigative capabilities that are currently being sought out in a range of heavy industries cognisant of strict environmental standards.
Last week, Envirosuite announced its maiden agreement with Beijing BHZQ Environmental Engineering Technologies, an engineering company focusing on the water sector.
BHZQ is currently a subsidiary of Hong Kong-listed Beijing Enterprises Water Group and manages several high-value water infrastructure assets including watercourses, wastewater treatment facilities and water recycling services in municipal and industrial parks.
Both companies have agreed to jointly promote environmental management using the Envirosuite platform to provide a market-leading and pioneering solution suite for the waste and water sector.
Importantly, Envirosuite and BHZQ said they are confident that broad industry adoption of the technology will be forthcoming and thereby enable improved operational, environmental and community outcomes in China and globally.
Envirosuite said it will work with BHZQ to deliver existing projects and secure new projects across a range of sectors including utilities, mining, smart cities, heavy industry and industrial parks. The two parties also plan to collaborate in providing technology solutions in support of large-scale third-party projects that BHZQ participates in on ad-hoc basis.
To follow up last week’s agreement, Envirosuite unveiled its second agreement earlier today, with Hebei Sailhero Environmental Protection High-tech, a specialist company that manufactures advanced environmental monitoring instruments within the Chinese environmental monitoring industry.
Currently, Sailhero specialises in air quality monitoring equipment and claims to wield 30% of the overall market in China. Its prime focus is city-wide monitoring for government clients with Envirosuite drafted in to provide several important features to the company’s existing operations.
The Australian company will be Sailhero’s strategic provider of environmental solutions initially in air quality improvement and other utility projects which includes monitoring odour, air and noise as well as providing risk management services including its “incident intelligence” solution.
According to Envirosuite, the agreement represents a significant operational boost and has declared that the agreement will enable it to scale with a partner that can address the equipment requirements for large projects.
The two companies will seek to work together on projects in China as well as overseas to provide comprehensive intelligent environmental management solutions.
“It is highly significant that within two months of commencing our China focus we have managed to extend our reach into a new province with a major listed company that perfectly complements our offering,” said Envirosuite’s chief executive officer Peter White.
Another aspect that has been cited by Envirosuite is that the deal validates its pollution detection technology, especially when considering Sailhero’s size and established market position.
Sailhero has specialised in manufacturing advanced environmental monitoring instruments for more than 20 years and was the first listed company in the environmental monitoring industry in China. According to market data, the Chinese company is worth around 4.3 billion yuan (A$900 million) by market capitalisation and hauls in around 2 billion yuan in revenues every year.
Sailhero currently employs more than 2,000 people across its operations in China, operates 14 domestic and foreign subsidiaries as well as three research and development centres.
Envirosuite said its technology will be used as part of a range of industries including the construction of smart cities, heavy industry, port maintenance, agriculture and mining.
“We are starting to see the potential for our business in the China market and now we have two top-level partners that have agreed to support our expansion with their enormous market reach,” said Mr White.
For Envirosuite investors and market analysts, there is a key date looming. The company will hold its annual general meeting on 25 November this year where the second tranche of capital (as part of a placement to ZZL) is expected to be ratified.
Envirosuite shares added 3% to reach $0.315 per share in morning trade.