Global wastewater solutions company Fluence (ASX: FLC) has pulled a “new (financial) year, new us” move as it secures new contracts and realigns the company to boost efficiency. The Company has secured new strategic orders, including its first wastewater treatment contracts in Taiwan and Korea. Plus, the Company is undertaking organisational improvements to boost its Smart Product Solutions (“SPS”) sales globally at lower costs.
The water recycling company, typically targeting China, has been awarded a contract to sell a wastewater treatment plant in Taiwan. The plant will be commissioned before the end of December in Taoyuan City and will serve approximately 13,000 people. Fluence will also operate the plant for 18 months after commissioning. The value of the contract is about US$520k ($786k).
Fluence has also secured its first membrane aerated biofilm reactor (MABR) contract in Korea, valued at US$200k ($302k). The Nitro unit is targeted for delivery to Seojin Energy Co during Q1 2023. This will be the first Nitro sale in Asia, and the application will treat highly concentrated wastewater with elevated levels of ammonia and nitrogen that can’t be tackled using traditional methods.
Finally, Fluence has entered into an additional contract with existing customer mining company Eramine to treat lithium brine, and soda ash streams at a lithium mine in Argentina. The contract is valued at US$1.9 million ($2.87 million), bringing the total value of Fluence projects at this site to over US$10 million ($15.12 million).
CEO and Managing Director, Tom Pokorsky, shared, “We have previously noted our growing pipeline of projects in SE Asia. These contracts in Taiwan and Korea show our efforts there are beginning to bear fruit with further opportunities in these and nearby countries.
“We see great potential for our unique MABR solutions as well as wastewater-to-energy and other SPS products globally. It is therefore imperative we structure our organisation around product lines to optimise both growth and profitability going forward.”
In keeping with that, the Company is taking action to improve sales reach and reduce costs. For one, instead of organising by geography, the Company will now organise around product lines with a focus on its decentralised and larger scale municipal water and wastewater treatment, including MABR (Aspiral, SUBRE, and Nitro), Nirobox and aeration products. Besides that, it will target its high-strength wastewater treatment and specialised industrial water solutions.
Secondly, it aims to expand its sales capability in North America by hiring internal sales and support positions and signing new manufacturers’ representatives. Several key hires have already been made.
Third, it’s turning its attention to Southeast Asia beyond China, thanks to growing demand. It also counts on its potential Ivory Coast contract to secure more wins.
Finally, Fluence will optimise its procurement and manufacturing procedures to streamline costs and reduce lead times.
Pokorsky added, “Our regionally focused business units did not always maximise the sales reach for each of our product lines and required significant administrative overhead. This new organisation enables us to do more with less, resulting in a more streamlined and effective organisation with greater sales potential while simultaneously achieving significant operating efficiencies.
“These changes are already underway, and we anticipate they will be substantially completed by the end of the calendar year.”
The above realignment is expected to boost not only sales but also savings. The Company reports that it will result in annual operating expense savings of about $4.5 million or more than 10% of current operating costs. Plus, it will cut headcount by 10%, resulting in a $1.5 to 3 million restructuring charge.
The new and improved Fluence is here, and, so far, it seems to be going well.
Alinda is a Business Reporter for The Sentiment
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