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EMEFCY (ASX: EMC) has signed a deployment and distribution partnership for its Membrane Aerated Biofilm Reactor (MABR) wastewater treatment technology with Beijing Sinorichen Environmental Protection Corporation.
The agreement opens up access to a market worth up to $1.3 billion for the Melbourne-based company, which manufactures its technology out of Israel.
The Chinese government has a five-year plan to build new rural wastewater treatment plants supporting a population of around 50 million people in the provinces in Beijing and to its north.
Sinorichen has an established wastewater treatment consulting business and it intends to deploy the MABR-based wastewater treatment systems to rural communities in the Beijing Province and throughout northern China.
The partnership starts with a demonstration project in Miyun district and when that meets required performance criteria, the parties will launch a multi-phase deployment roll out plan. First, Sinorichen will use the systems for up to seventy rural installations each worth between $50,000-$250,000. It will then market the technology throughout northern China.
Richard Irving, Executive Chairman of Emefcy says Miyun District is one of China's most progressive provinces and Sinorichen represents a Emefcy's "preferred profile of partnership in China", and will accelerate deployment in other provinces.
"Emefcy is investing substantial resources and starting to make important inroads in penetrating the rural wastewater treatment market in China," he says.
The MABR modules will initially be produced at Emefcy's manufacturing facility in Israel, but the company of seeking licence approvals to establish manufacturing facilities in Jiangsu Province and the first manufacturing line in China is expected to be in place by the second quarter of 2017.
The first Sinorichen installed MABR-based system is scheduled to be commissioned during the fourth quarter of 2016 and provisional certification is expected by the third quarter for 2017.
For all joint future contracts, Sinorichen will purchase MABR modules from Emefcy, will integrate them under Emefcy's technical guidance into a complete treatment system and provide ongoing plant maintenance and related services.
This is Emefcy's second strategic partnership announcement in two months following its announcement on 15 August of a distribution agreement with Wuxi Municipal Design Institute.
Emefcy shares are trading up 11.59 per cent on the ASX this morning at $1.155 per share.
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