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Fluence Corporation (ASX:FLC) secures new contracts and implements growth strategy

ASX News, Industrial
ASX:FLC      MCAP $166.8M
22 November 2022 16:00 (AEST)

Water solutions company, Fluence Corporation (FLC) has secured two new contracts, as it looks to implement business improvements to grow sales at lower costs.

The company was awarded a contract to provide its Smart Product Solutions (SPS) wastewater treatment plant in Taiwan, as well as its first membrane aerated biofilm reactor (MABR) contract in Korea.

The SPS contract is worth $520,000 with the plant due to be commissioned before the end of the year, serving 13000 people, and will be operated by Fluence for at least 18 months.

Meanwhile, the Korean MABR contract is valued at $200,000 and will see a nitro unit delivered to Seojin Energy in the first quarter of 2023.

The nitro product treats highly concentrated wastewater with elevated levels of ammonia and nitrogen that the company said could not be treated successfully using traditional approaches.

This contract marks the first nitro sale in Asia, according to Fluence.

The company has also entered into an additional contract with its existing customer, Eramine, to treat lithium brine and soda ash streams at a lithium mine in Argentina.

This contract is valued at $1.9 million, bringing the total value of the company’s projects at the site to over $10 million.

Amidst securing contracts, Fluence is working to grow its pipelines across North America and Southeast Asia outside China, and across both its treatment as a service and wastewater-to-energy categories.

In this vein, the company has decided to implement organisational improvements to boost its sales reach while reducing costs.

Fluence said it is “realigning” its business to enable products to be “more effectively” sold in applicable global markets.

This would include decentralised and larger scale municipal water and wastewater treatment, high-strength wastewater treatment including generating energy from wastewater and specialized industrial water solutions.

To support expansion in North America, FLC has begun hiring internal sales and support positions, and signing new manufacturers representatives.

The company said in an attempt to streamline costs and reduce lead times, procurement and manufacturing will be further optimized globally.

This is expected to result in both the manufacturing of MABR modules and assembly of SPS products in North America utilising both in-house facilities and subcontractors.

Fluence expects the realignment to enable better sales reach and result in annual operating cost reduction of around $3 million.

CEO and Managing Director Tom Pokorsky said the new organisation enables the company to “do more with less”.

“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 organization around product lines to optimize both growth and profitability going forward,” he said.

FLC shares were trading grey at 17 cents at market close.

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