2. 2
Confidentiality & Disclaimer
The following document is for discussion purposes only.
This document is furnished on a strictly confidential basis to a limited number of
sophisticated investors and potential partners and is intended for authorized recipients
only and may not be reproduced or distributed in any format without the express written
approval of Environtech China. By accepting delivery of this document, the recipient
agrees unconditionally to be bound by a strict duty not to disclose any information
included in this document to any other person. If you do not wish to be bound by this
confidentiality agreement, please return this document to Environtech China
immediately.
The receipt of the attached information is not to be taken as constituting the giving of
investment advice by Environtech China to the recipient, nor to constitute such person a
customer or client of Environtech China.
The information attached hereto is not comprehensive and may be changed. Environtech
China expressly disclaims any and all liability for representations, expressed or implied,
contained in, or omissions from the attached information. In addition, certain portions of
the information contained in this document has been obtained from sources outside of
Environtech China.
3. 3
Content
Environtech at a Glance
The Problem we Address
Our Solution
Target Markets
Competition
The Numbers
Our Company
The Investment Proposal
4. 4
ENVIRONTECH at a Glance
Proprietary water
recycling solution,
Untapped market
niche in China
Unique business
model
Urgently require effective
treatment and reuse solutions.
Reduces water costs, and
improves water quality for reuse
Unlocks an untapped market with
first-mover advantage
CHINA’S SEVERE
WATER CONSTRAINTS
ENVIRONTECH’S
PROPRIETARY WATER
RECYCLING SYSTEM
OUR UNIQUE BUSINESS
MODEL
6. 6
China’s Dramatic Need for Clean Water
China’s per capita
water supply is 1/3
the world average
In Northern China,
even lower
… with few cost-
effective treatment
solutions
7%
20% of China’s water
is in the North
400 cities in China
have inadequate
freshwater supplies
Industrial water users
face increasing pricing
& treatment costs
…22% of global
population
…exploding demand
from urban migration
and increasing wealth
…45% of China’s
population is
in the North
SHRINKING SUPPLY GROWING DEMANDVS
of global freshwater
7. 7
Market Drivers: Rising Price & Strict Policy
Urban water and wastewater prices, especially
in Northern China, are rising steadily
Water prices, and
regulations,
particularly for
commercial and
industrial users, are
expected to increase
substantially over the
next 3 years,
City 2005 2009 2010
Beijing 3 rmb/ton 6 rmb/ton 7 rmb/ton
Tianjin 3 rmb/ton 6 rmb/ton 6 rmb/ton
Shanghai 1 rmb/ton 3 rmb/ton 3.5 rmb/ton
Guangzhou 1 rmb/ton 2 rmb/ton 2 rmb/ton
Sample Regulations
Urban Water Pricing
Source: h2o-china,
c
Beijing Commercial users of water cannot increase water usage
from previous year
Shanghai Commercial water supply can be restricted if residential
water supply is at risk
Qingdao Hotels above 20,000 sqm. must install and maintain water
recycling systems
9. 9
ENVIRONTECH’s solution: Our
Technology
Re: Water
● Proprietary water recycling design and solution
● Recycling 70% of a property’s recoverable greywater.
● Superior water quality for reuse
● Modular design can scale to meet any treatment volume
● Customized engineering to optimize results for:
Ø physical parameters
of the site
Ø specific wastewater
contents
Ø type and degree of
treatment required
Ø the purpose of water
re-use
TM
Re:Water captures
up to 100% of a
property's non-toilet
water…
… of which we can
treat 70% for reuse
in kitchen’s and
facilities….
… plus treat
another 20% for
landscaping and
toilet flushing
TM
11. 11
ENVIRONTECH’s solution: A Unique Business Model
Compelling
incentives for
customer adoption
Stable revenue
generation for
Environtech
For CUSTOMERS
For ENVIRONTECH
ü A one-stop, multi-year water recycling & service solution
ü No initial capital outlay
ü Consistent cash flow income across 5 years.
ü Break-even per project between 12 to 24 months
(depending on wastewater volume).
13. 13
Two Target Markets
Leading hotels
demand high
quality water for
rooms, spas, pools
and food &
beverage outlets
STAR-Rated Hotels In China
China as roughly 14,000 star-rated commercial hotels and over 5,000
government-run hotels.
ENVIRONTECH will targets star-rated hotels in regions where our
Re:Water solution is most urgently needed .
ü require effective water reuse for
for guests and facilities
ü value competitive advantages of
higher quality water supply
ü pursue the marketing benefits gained
through “Green” branding
Leading Hotel Brands
1 -
TM
14. 14
Benefits for Hotels
Reduce Hotel Water Costs (by reusing recycled water)
SIX bottom-line
benefits..
… ONE seamless
solution
1
2 Tax Incentives: 10% reduction on taxes (when using water
recycling equipment)
3 Manage / Reduce Long Term Costs: Today’s water rates
LOCKED IN for the life of contract
4 No Up Front Costs : Fees paid through savings
5 Higher Quality Water Supply: Recycled water is often of
higher quality than source water
6 Stable Water Supply: Storage of recycled water can provide
2 days of water onsite if city supply is interrupted
15. 15
Two Target Markets
Grade A office
and mixed-use
properties demand
high-quality water
for their facilities
and tenants
GRADE A OFFICE BUILDINGS & MIXED-USE PROPERTIES
China’s top 20 cities contain 30 M sqm. of Grade A office space, and
by the end of 2030, this will grow 65% to total 50 M sqm.
ü provide superior amenities, higher service standards
ü have more water-related infrastructure
ü all requiring larger volumes of
higher quality water
By marketing “Green” credentials
and certification, these facilities
can increase both occupancy
rates & rental fees from leading
corporate, recreational, retail and
luxury tenants
Grade A Facilities
2 -
16. 16
Benefits for Office & Mixed-use Properties
In addition to similar cost, water quality and branding benefits for
hotels, Office and mixed-use properties can also benefit from higher
margins and new revenue streams:
In an increasingly
competitive sector,
many landlords are
looking to LEED (or
similar “green”
certifications) as a
point of
differentiation
Studies have shown
that rents in LEED
buildings are as
much as 34.5%
higher and
vacancies 4.2%
lower then in non-
LEED buildings
Source: Addressing
China's Water Scarcity
ü Water Recycling can add 10 points (ref: LEED Certified – min. 40pts)
ü LEED buildings outperform others in terms of rent margins and
occupancy days
ü As water prices rise, landlords service fees to ENVIRONTECH
stay at the original baseline level (covering 70% of their water needs).
Locked-in, 5-year Service Fees
17. 17
Stage IIIStage IIStage I
Target Market Sales Cycle
Meet Client
Water Audit
Analysis
(Profit)
Proposal
Design
Procurement
Engineering
Installation
Go Live
Service
Sales Cycle should be
14 – 20 weeks
from initial contact
through to an
installed, operating
Re:Water system
Stage I Timing
4-6 weeks
Stage II Timing
4-8 weeks
Stage III Timing
… 5-years
TM
19. 19
Competitive Landscape
A) Chinese and international water market giants (Siemens, GE, Veolia,
Pentair, Tianjin Capital) are currently competing in much larger
municipal and industrial projects
B) Small and medium players (e.g. UV Pure, ITT) focus on products and
services for specific treatment stages and processes
First-mover
advantage, best-
in-class service, in
an untapped
market..
… Creates entry
barriers to
competitors
Some of these companies, plus new start-ups, will enter our markets.
ü Our target markets in China are massive
ü ENVIRONTECH leverages a first-mover advantage to
gain sales traction and satisfied customers in top-tier, high
quality service segments
ü Leave lower-end segments to potential competitors entering
the market
Potential Competitors
ENVIRONTECH’s Competitive Strategy
21. 21
Market Revenue Projection
N e w
Projects
Recurring
Projects
N e w
Revenue
(RMB (M)
T o t a l
Revenue
RMB (M)
T o t a l
Revenue
USD (M)
Year 1 20 0 12 12 1.8
Year 2 40 20 24 36 5.3
Year 3 100 60 60 96 14.3
Year 4 100 160 60 156 23.3
23. 23
ENVIRONTECH – Development Milestones
In first 9 months of
operation, all
strategic goals
reached on time
and on budget
Milestone to date Q2 09 Q3 09 Q4 09 Q1 10
Founders launch
Patent/trademark filing
Shanghai Office
Engineering Partners
Asia Pacific Senior
Management
First Hotel LOI
First Mixed-use LOI
First sales contract
Project Management and
Service Partner
Financing Partner
First installation
ü
ü
ü
ü
ü
ü ü
ü
ü
ü
ü
ü
ü
24. 24
ENVIRONTECH - Experienced Team
Industry Leaders
§ 25 years in bringing companies public, managing public entities, and
building companies in the US and China
Field Specialists
§ 50 years in combined waste water experience
§ 25 year’s experience in waste water recycling and water reclamation
§ With our engineering partner, we have successfully designed and
fulfilled over X number of wastewater treatment projects ranging from
US$50,000 to over $US2 billion.
Superior Business Development
§ Strong track record of company deployment and leadership. Our staff
members hold the following credentials:
– Previous CEO of Jin Jiang Hotels
- Previously built companies (in China) from 0 to 25 Million
– Managed a Northern China Sales Force
– Real Estate Consulting/Leasing for Mixed-use Projects
Environtech is a
start-up, composed
of a small team of
experts seamlessly
combining long-
term strategy, sales
and execution
Directors have
been hand-picked
based on
specialized
expertise
25. 25
Our Core Team: Technology & Engineering
Stephen J. Ratelle, President and Director of Water Projects.
Mr. Ratelle has over 25 years experience in Project Management, Design and
Advisory Services for large Water Treatment and Reclamation projects. Mr.
Ratelle has promoted new water technologies, implemented best practices,
and mentored junior technicians. During Mr. Ratelle’s career, projects have
included oversight of an, a 68 acre site with25 story condominium and a 50-
story hotel and casino resort project; project manager of a leading Spa at a 28
story hotel and conference center, plus numerous wastewater treatment
projects up to $2B. Most recently, Mr. Ratelle has been involved in developing
and designing Re:Water™ recycling systems.
Alan Aguba, Vice President of Engineering.
Mr. Aguba has over 25 years experience in progressively more responsible
positions in major Construction Management, engineering, procurement and
construction projects He has excelled in start-up and validation of
technologically in challenging industries ranging from state-of-the-art
petroleum refining and chemical processing and intelligent building, to a world
scale water treatment and power generation facilities. He is currently
managing the Chevron El-Segundo Refinery Capital Improvement Projects.
Mr. Aguba works extensively with over 200 engineers in China.
26. 26
Christopher L. Bachran, Senior Vice President, Managing Director of Asia Pacific.
Chris has 35 years experience in the management of hotel operations in the US
and Asia and is a hotel executive of the highest caliber. He has most recently
served as President of Jin Jiang Hotels, the largest hotel group in China, Chief
Operating Officer for Asia with Radisson Hotels, and has held several China and
Asia Vice President and Director roles with Sheraton Asia Pacific Corporation.
Patrick Woock, Vice President of Business Development.
Mr. Woock’s 7 years in China with start-up organizations and multi-national
companies seeking to expand into the China Market brings extensive China
Business Development experience to the team. Mr. Woock has a wealth of
experience in establishing distribution, sales and supply chain channels, as well
as negotiation and cross cultural communications skills. Before joining
Environtech, Inc., Mr. Woock held senior positions for a number of firms in China
Prior to China, he was a trader and broker on Wall Street.
William Pryor, Senior Development Director
Mr. Pryor has worked in Taipei and Shanghai for more than 5 years, with the
majority of his experience under the direction Jones Lang LaSalle’s Retail
Shopping Center Department in Greater China, a Fortune 1000 commercial real
estate firm with a presence in over 180 countries. During his China career, Mr.
Pryor has provided market research, feasibility studies, strategic advice, and
project planning and leasing in China to western, Japanese and Chinese
companies entering China.
Our Core Team: Operations & Sales
28. 28
US$3 Million Equity Stake
US$3 million
This Offering has a minimum limit of $25,000 in aggregate offering
proceeds and a maximum limit of $3,000,000 in aggregate offering
proceeds.
We will consider equity, preferred shares, and convertible debt for
investment. US$3 million in equity can gain a 17% equity position.
According to market conditions and the company’s growth, we
may pursue exit through a reverse merger listing, raise growth
capital, or continue company growth and expansion organically.
Ownership
Maximum-Minimum
Investment
Exit Scenario
29. 29
Use of Proceeds
Proceeds from this offering will be used for to cover operating
expenses, to close and complete current projects, and expand
sales and close of projects in our pipeline.
General Working Capital $ 350,000 12%
China Market Expansion Projects $ 2,000,000 66%
Sales & Marketing Expenses $ 300,000 10%
Research and Development $ 200,000 7%
Public and Investor Relations $ 100,000 3%
Corporate Development $ 50,000 2%
Total Use of Funds $ 3,000,000 100%
30. 30
Risks Factors
- Environtech requires this first round of capital to assure we cover the costs of
our market penetration schedule.
- Cash flow risks are mitigated through either monthly or quarterly service fee
payments over several years, which are paid by only reputable, industry
leading customers.
- We have a financing option built into our model that mitigates risks of capital
cost outlay.
- Our proprietary design has not been extensively tested in the market.
Environtech mitigates this risk because
- We are not dependant on any one technology. Our design is patent pending,
and allows integration of currently available proven technologies
- Our core know-how and experience stems from decades in advanced
wastewater treatment methodologies, and in fulfilling challenging engineering,
construction and installation assignments.
- As we deliver more customized projects, we will continue developing our
treatment designs and processes.
- We have budgeted for continued, in-house technology design research and
development.
Technology Risks
Financial Risks
31. 31
We expect competitors to enter these markets. Environtech will compete
aggressively using our current time-window to effectively capitalize on our:
- extensive know-how, experience, and first mover position
- patented design
- delivery of best-in-class project execution and service
- market development strategy targeting only reputable, industry leading
hotel and mixed-use commercial property customers
- quality reputation building via customer satisfaction and “green” branding
Our innovative business model is new and not completely tested. Our first six
months communicating with our target customers has created strong buy-in to
the model, which provides a complete solution customers have not seen
previously.
Senior executives have ownership stakes in the company. The design and
engineering leadership have successfully cooperated on several large
challenging wastewater projects. Our strategic partners are leaders in their
respective fields, freeing up management to focus on grow the company.
Risks Factors
Business Model Risks
Management Risks
Market Risks
32. 32
Environtech provides a compelling investment case
A proprietary technology design and service solution, created from
decades of successful experience in wastewater treatments and
projects, unlocks an untapped market.
A unique business model designed for the urgent needs of our
target customers drives market adoption and sales growth
A cohesive team of management and strategic partners combines
decades of successful, industry leading track records of
company building, project execution and service delivery, all
aggressively addressing our niche markets.
Summary
A unique opportunity for investors to participate
in the fast growth of a quality company, addressing
a niche market and creating handsome returns.
