Phoslock Environmental Technologies (ASX: PET) this week demonstrated the potential of a new route for local innovation – go from Australian idea to successful product entirely within the China market.
As China’s economy grows this route will become increasingly common for manufacturers, especially as Phoslock’s shares have leapt 25 per cent this week on news of successful trials in China.
The company set up in 2002 to commercialise a CSIRO technology for eliminating excess phosphorous that causes algal blooms in rivers and lakes.
With local demand unlikely to be enough to support commercialisation, Phoslock began demonstrating its Phoslock product in China.
This week the company announced a demonstration project on Xingyun Lake in far south China had led to a massive contract to rehabilitate 14 rivers and waterways, dozens of reservoirs and the massive Fuxian Lake.
Chairman Laurence Freedman said: “The Xingyun project has in short order transformed from being a large, 24 sqkm lake to its 371 sqkm catchment area.
“This project alone will take many years and involve very large tonnages of Phoslock.”
Phoslock is a lanthanum modified bentonite, or clay-type material, that permanently binds phosphate to form a new inert mineral called Rhabdophane.
This sinks and becomes an inert part of a waterway’s sediment, permanently removing the harmful phosphate from the ecosystem.
Freedman said the demonstration had shown no adverse effects on fish, plant life or humans.
The company is now scaling up logistics operations to supply its factory located in the economic zone of Changxing, 150km from Shanghai.
The recently completed factory also now incorporates the company’s engineering department, chemical research and product development.
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