Environmental company Phoslock Environmental Technologies (ASX: PET) has provided its shareholders with an optimistic business update including the news that work on a second wetland project in south Beijing is now underway.
Sydney-based Phoslock was established in 2002 to provide innovative water technologies and engineering solutions to manage nutrients and other water pollutants and formed a separate Beijing subsidiary last year in order to promote water remediation products in China.
The company sports multiple products to manage unhealthy water bodies and promote healthy aquatic environments.
To develop its market product, Phoslock collaborated with Australia’s leading scientific organisation, the CSIRO, to significantly reduce excess phosphate safely from the environment.
With the technology now in hand, the company has made quick strides to implement active projects in several countries that are currently struggling with water remediation issues.
One of the largest target markets is China – an industrial juggernaut that has fallen short of environmental sustainability in various sectors, namely industrial manufacturing and resources exploration.
Given the substantial need for water remediation in China, Phoslock launched its Beijing operations last year with a view of carrying out design, engineering, and implementation using remediation materials for rivers, canals, reservoirs and lakes along with construction of wetland areas.
Phoslock intends to deploy its patented PHOSLOCK product – a unique water treatment method that permanently binds excess phosphorus which inhibits the growth of harmful algal blooms (HAB) that lead to detrimental effects to both aquatic and human life.
Big project plans
Phoslock says its flagship project involves the movement of over 60,000 tons of materials and over 2,000 truck movements to the project site as part of a huge logistical and project management exercise.
If successfully completed, the new wetland project represents a value of around $7 million and is expected to be completed by November 2018.
The estimate means Phoslock could potentially expand its existing operations and further bolster the company’ strong commercial performance to date.
Financial performance boost
The past financial year was described as “transformational” according to Phoslock chairman Laurence Freedman, with revenues reaching $11.5 million.
Furthermore, its Chinese operations have started start the new financial year with over $10 million spent on development work, currently in progress.
The company’s “international group” recorded revenues of $4.7 million, with several milestones projects completed, according to Phoslock.
“We are now an integrated environmental remediation technology company, growing internationally. The first year of operations produced outstanding results — we are firmly focused on FY18/19 and are forecasting revenue in the range of $27 million – $30 million and operating profit preliminary forecast in the range of $7 million – $10 million,” said Mr Freedman.
To date, the company’s work in China has been progressing rapidly with Phoslock saying that the results from bacterial applications have been “outstanding”.
As part of its market ramp-up, the company’s Beijing Sales & Engineering Division has swelled to 25 professional employees with its team now engaged on a number of large engineering and environmental projects expected to result in significant sales over the next 8 months, according to Phoslock.
The water tech company says that its international team is currently working on three distinct projects located in Europe, North America and northeast Asia with pricing now submitted for all three ventures. Decisions on these projects are expected “in the next few months.”
“All aspects of the business continue to expand and more countries are now becoming aware of the enormous impact that Phoslock Environmental Technologies provides. We expect to be adding more projects, at various locations, as the year progresses,” said Mr Freedman.