Sept8,2009eptsolutionconfidential1Sept8,2009eptsolutionconfidential2OutlineWaterandwastewatertreatmentSludgetreatmentregulationSludgetreatmentmarket--9milliontons/yearwith80%watercontent--Inthenextfiveyears,thenumberwillbe27millionton/yearwith80%watercontentEnterprisesinChina’ssludgetreatmentanddisposalmarket--overseaenterprises--domesticenterprisesExporttoChina--marketaccess--WaterandWastewaterTreatmentTechnologyandEquipmentSales(fromU.S.DepartmentofCommerce,InternationalTradeAdministration)Sept8,2009eptsolutionconfidential3WaterandwastewatertreatmentSincethe1990s,morethan100internationallywell-knownenterprisesenteredChina’senvironmentalindustryandcapitalmarket.From1991to2000,about90percentoftheequipmentinlargeormedium-sizedwastewatertreatmentplantswasimported.Operation--investeddirectlyinChina’swatermarket--participatingintheconstructionandoperationthroughBOTandothercooperationmodes--establishedjointventuresorwhollyownedsubsidiariesinChinaWaterMarketInvestment--SuezandVéoliaWater(French)--ThamesWater(UK)--andothersMarketshareinChina’swaterandwastewatertreatmentsector5015154610EuropeanUnionJapan*USAustraliaCanadaothersSept8,2009eptsolutionconfidential4WaterandwastewatertreatmentChinawaterandwastewatertreatmentimportaroundtheworldandUS01000200030004000500060007000800020022003200420052006Value(USmillion$)TotalImportsImportsfromtheU.S.TableWaterandWastewaterTreatment-China(datafrom)20022003200420052006TotalMarketSize14,08516,84019,37722,31322,839TotalLocalProduction10,22411,80013,56515,60017,940TotalExports360523585643707TotalImports4,2215,5636,3977,3565,606ImportsfromtheU.S.422556639735560*Allfiguresintheabovetablerepresentunofficialestimates.Inmillionsofdollars.Noaccuratefiguresareavailable.*China’senvironmentalprotectionindustryisgrowingatapproximately15percentannuallyduringthepastseveralyears.ManyformsofPrivatePublicPartnership(P3)arenowacceptedbytheChineseGovernmentprovidingtechnologyandequipmentsupply,andlong-terminvestmentopportunitiesforforeignenterprises.Thepublicwaterinfrastructurehasbeenopenedtoforeignandnon-stateownedcapitalfinancing.China’swatermarketisextraordinarilyactive.AlthoughU.S.firmsdoenjoyasolidreputationforproductquality,themarketshareisverylow.Sept8,2009eptsolutionconfidential5Wastewaterandsludgedisposalregulation“NoticeonAcceleratingtheIndustrializationofMunicipalWastewaterandWastesTreatment”,enactedSeptember2002bytheformerNationalPlanningandDevelopmentCommittee,MinistryofConstruction,andStateEnvironmentalProtectionAdministration.Inthisnotice,thestatesupportstheregisteredleadingcorporationofmunicipalwastewatertreatmentprojectsinabsorbingforeigncapital,includingforeignloans.Thegovernmentwillprovideatransparentandequitablemarketenvironmentfordomesticandforeigninvestorswhointendtoinvestinandoperatewastewatertreatmentfacilities.OnFebruary18,2009,Ministryofhousingandurban-ruralconstruction,MinistryofenvironmentalprotectionandMinistryofscienceandtechnologyjointlyissuedThetechnologypolicyforurbansewagetreatmentplant’ssludgetreatmentanddisposalandpollutionprevention(fortrialimplementation)ThisisthefirsttimethatChinaissuedsludgetreatmentanddisposalpolicy:usesewagetreatmentfee,financialsubsidiesandotherstocoversludgetreatmentanddisposalcostsSept8,2009eptsolutionconfidential6SludgetreatmentstatusoverviewTheequivalentdrysludgegeneratedinChinasewagetreatmentplantsis1.8millionton/year(or9milliontons/yearwith80%watercontent).Inthenextfiveyears,thenumberwillbeincreasedto5.4milliondryton/year(or27millionton/yearwith80%watercontent)asthousandsofsewagetreatmentplantswillbebuilt.Onlyquarterofexistingsewagetreatmentfacilitieshavesludgetreatmentfacilities.Eveninthesesludgetreatmentfacilities,onlyfewdigestiontanksarefunctioning,somearesimplynotrunning.Inmanyplaces,thesludgewasdirectlydischargedwithoutappropriatetreatmentanddisposal,whichcausedserioussecondarypollutionproblems.SludgedryingbecomeaMUST--Whereisthetechnology/equipment?Sept8,2009eptsolutionconfidential7EnterprisesinSludgeTreatmentandDisposalMarketSept8,2009eptsolutionconfidential8AndRitzGroupCo.,LtdProjectsinChina(non-sludge)---AnumberoforderswerereceivedfromtheBaosteelGroup,Chinatodewatervarioussludgesfromsteelproduction.---ForXinJiangZhongtaiChemicalCo.Ltd,China,Andritzwilldeliveralargefluidizedbeddryingsystemwithacapacityof30t/hforS-PVCpowder.---Afluidbeddryerforsolidificationof5,500t/aofcalciumchloridebrine,aby-productofsodaashproduction,wasorderedbyTangshanSanyouInternationalIndustryCo.Ltd.,China.ProjectsinChina(sludge)---BeijingDrainageGroup,ChinaorderedasewagesludgedryingplantforitsQinghewastewatertreatmentplant.Thedryingplantisbasedonthefluidbedtechnologyandcomprisestwolines,eachwith6.5t/hevaporationcapacity.Sept8,2009eptsolutionconfidential9Atlas-Stord-Atlas-Storddryerwasinventedin1940.Totalofmorethan1,600unitswereinstalledaroundtheworld.Morethan100wasinstalledforsludgetreatmentinthelast30years.Representedbynewtec-Shanghai()Sept8,2009eptsolutionconfidential10OtheroverseaenterprisesSe