Title: www.chinaciwt.com
1 China Industrial Waste Management, Inc.OTCBB
CIWT
We care about our environment
Investor Presentation 2009
2Safe Harbor Statement
- This investor presentation does not summarize all
of the matters relevant to or necessary for a
person to make an investment decision concerning
China Industrial Waste Management, Inc.
Accordingly, prior to making any investment
decision, prospective investors and their
advisors should conduct their own due diligence
investigation of China Industrial Waste
Management, Inc., including asking questions of,
and obtaining additional information from, China
Industrial Waste Management, Inc. concerning its
business and prospects, the terms and conditions
of any potential investment and any other
relevant matters. - This presentation contains forward-looking
statements, including financial projections. In
some cases, you can identify forward looking
statements by terms such as may, will,
should, could, would, expects, plans,
anticipates, believes, estimates,
projects, predicts, potential, and similar
expressions. The forward looking statements
reflect China Industrial Waste Managements
current views with respect to future events and
are based on assumptions and are subject to risks
and uncertainties. - The forward looking statements set forth in this
presentation are our managements projection of
possible future operations, developments, and
results based upon numerous assumptions, and are
dependent on many factors over which we have no
control. We cannot guarantee that any of the
assumptions on which forward looking statements
are based will prove to be correct, or that we
will achieve the results set forth in the forward
looking statements. - We make no expressed or implied representation or
warranty as to whether we can attain the
projected financial information or the accuracy
of any other forward looking statements set forth
in this Executive Summary or as to the accuracy
or completeness of the assumptions from which the
forward looking statements are derived. We do not
have any obligation to update or revise any
forward looking statement to reflect any change
in our expectations or any change in events,
conditions, or circumstances on which any such
statement is based. Given these uncertainties,
you should not place undue reliance on such
forward-looking statements.
3Company Overview
- Founded in 1991, as first industrial waste
treatment company in China - headquartered in
Dalian, Liaoning province, PRC - Leading environmental protection, pollution
treatment and solutions provider, and industrial
waste processor for commercial and municipal
customers with recurring, high margin revenues - Ministry of Environmental Protection of China
(MEPC) licensed industrial waste processor plus
local government approvals - Over 650 customers, including major multinational
corporations supported by 400 full-time
employees
Industrial Waste
Municipal BOT
Engineering
4Corporate Structure - Ownership
China Industrial Waste Management, Inc. (CIWT)
90
Dalian Dongtai Industrial Waste Treatment Co.,
Ltd.
80
49
70
75
Dongtai Water Recycling Co. Ltd.
Dongtai Organic Waste Treatment Co., Ltd.
Zhuorui Resource Recycling Co., Ltd.
Dalian Lipp Environmental Energy Engineering
Technology Co., Ltd.
5Financial Introduction
6Investment Highlights
- REGULATORY DRIVERS - Increasing government
regulation and support strengthens ecological and
environmental protection in PRC. - HIGH BARRIERS TO ENTRY - Lengthy lead times to
acquire licenses from the Chinese State
Environmental Protection Administration (SEPA)
and provincial government. - INDUSTRY LEADER with strong track record in
developing and operating industrial waste
treatment systems. - DIVERSIFIED BUSINESS including several municipal
Build-Operate-Transfer (BOT) projects with
long-term, recurring revenue streams. - STRATEGICALLY LOCATED in Dalian, Liaoning
Province which is one of the largest industrial
centers and waste producers in China - EXPERIENCED AND DEDICATED MANAGEMENT TEAM that
possess industry focused technical capabilities,
have invested significant dollars and maintain a
large ownership stake
7Market Overview
- The Environmental Protection Industry in China is
estimated to grow by 25 per year more than 2x
Chinas GDP growth - The environmental protection industry in China is
expected to double and reach 120 billion by
2010 - In the 11th Five-year Plan (2006-2010), MEPC
committed 190 billion for industrial companies
for cleanup - All companies have to meet stringent license
requirements from MEPC and local governments - Highlighted as a critical component of Chinas
586 billion stimulus plan - Liaoning is one of the countrys largest
industrial centers and waste producers. The
Company has five key locations throughout Dalian.
Local Waste Volume
2001 2002 2003 2004 2005 2006 2007
2008
Source MEPC
8Business Overview
- INDUSTRIAL WASTE
- Industrial Waste Treatment and Recycling Services
Dalian Dongtai Industrial Waste Treatment, Ltd.
(Dongtai) full service waste treatment
facilities majority of revenues to date and
currently under expansion - Waste Catalyst Recycling Dalian Zhuorui
Resource Recycling Co., Ltd - generates valuable
metals and slag used for cement
commercialization to commence in 2009 - MUNICIPAL BUILD-OPERATE-TRANSFER (BOT)
- Waste Water Treatment Dalian Dongtai Water
Recycling Co. Ltd. - for the city of Dalian
commenced production in June 2008 - Municipal Sludge Treatment Dalian Dongtai
Organic Waste Treatment Company - process sludge
by anaerobic fermentation to generate methane and
fertilizer, expect production to commence Q3 2009 - ENVIRONMENTAL ENGINEERING
- Dalian Lipp Environmental Energy Engineering
Technology Co., Ltd. - JV with German Lipp -
sales of fermentation tanks system for waste
water and sludge treatment equipment design and
manufacturing to commence in 2009
9Industrial Waste - Project I
- Dalian Dongtai Industrial Waste Treatment, Ltd.
90 owned by CIWT - Waste treatment facility includes Electronic
Waste Dismantling facility, Etchant Reuse
facility, Waste Incineration facility, Hazardous
Waste Safety Landfill Site, and General
Industrial Waste Landfill Site - One-stop shop for industrial and commercial
waste treatment services - Clients include major multinational corporations.
International clients contribute approximately
67 of Dongtais revenue - Business model 1) Service fees
- 2) Sales of cupric sulfate
- 3) Sales of recycled commodities
Scrap Material Recycled Products
10Industrial Waste - Project I (contd.)
- Expansion Plan Underway One-stop service center
for hazardous waste management - Sponsored by National Development and Reform
Commission as part of a plan to construct 55
hazardous waste treatment centers in key
locations throughout China - Total investment is approximately 16 million to
build out the 634,000 square foot new facility - Most advanced in China and on par with
international standards for solid waste treatment
facility - Increase capacity of incinerator from 3,300
tons/year to 9,000 tons/year - Increase capacity by adding a new hazardous waste
landfill, an industrial effluent treatment system
and an organic solvent recycling system in
addition to current facilities - Capacity expansion is expected to be on-line by
the fourth quarter of 2009
11Diversified Customer Base
12Industrial Waste - Project II
- Dalian Zhuorui Resource Recycling Co., Ltd. 70
owned by Dongtai - Total investment of approximately 10 million.
- Leading technology used to recycle scrap catalyst
from refineries and generate valuable metals
including Molybdenum, Nickel, Cobalt, and
Vanadium. Annual scrap catalyst generated in
Northeastern China is about 10,000 tons. - Current annual processing capacity is 5,000
tons/year, yielding 1,400 tons of metal compound
which are sold into the market. Additionally
waste slag is sold as a raw material for cement. - Partnership with two major oil refineries to
secure supply of waste catalyst at low cost which
benefits margins significantly
Dalian Zhuorui Resource Recycling Co., Ltd.
13Recycle Process Flow
Collect Hazardous Waste Catalyst from Oil
Refineries
- Patented Plasma Furnace to Process
- Melting (1800 C )
- Crushing, Milling, Oxidation, Separation
- Electricity intense
- Metal Alloy
- Ammonium Metavanadate
- Ammonium Molybdate
- Cobalt Sulfate
- Nickel Sulfate
- Vitreous Slag
- Raw material for cement
- Processed waste yields approximately 20-30
metal alloys and 70 -80 vitreous slag - Denoted as Key National Environmental Protection
Practical Technology in 2005 - Received three patents in China
- Received subsidies through government funding
14Municipal BOT - Project I
- Dalian Dongtai Water Recycling Co. Ltd 80
owned by Dongtai - Processes waste water generated by the City of
Dalian - Receive fixed quarterly payments from the local
government approximately 0.27 million per
quarter with average net margins of approximately
17 - Total investment was approximately 6.6 million
and commenced operations on June 21, 2008 - Phase I annual processing capacity of 30,000
metric tons per day - Phase II III to increase capacity to 100,000
metric tons per day, expected completion by 2011 - 20 years of stable recurring income backed by
tax revenue and franchise agreement
Foundation Construction Operation
15Municipal BOT - Project II
- Dalian Dongtai Organic Waste Treatment 49
owned by Dongtai - Municipal sludge treatment in Dalian utilizing
German Lipps Technology - Total Investment 18 million, expected to
commence operations in Q3 2009 - Processes sludge through anaerobic fermentation
and generates methane and fertilizer which are
reused - Expected to generate approximately 1.1 million
in quarterly revenue including processing fees
from the local government and sale of methane and
fertilizer - Average net profit margins estimated at 25-30
- Current capacity is 600 tons per day with
expansion to meet increasing demand
16Engineering
- Dalian Lipp Environmental Energy Engineering
Technology Co., Ltd. 75 owned by Dongtai - A joint venture between Dongtai and German based
Lipp Company - Target waste management companies and BOT
projects Addressing huge waste water and sludge
treatment market - Engaged in sales of Fermentation Tank System and
post-sale technical service. Plans to pursue
equipment design and manufacturing during 2009 - Average sale price of a ferment tank is
approximately 0.67 million - Competitive advantages
- Superior quality
- Onsite assembly
- Short construction period
- Lower cost and maintenance expense
17Competitive Landscape
- Highly regulated industry and stringent license
requirements both from SEPA and local governments - Sole company in Liaoning and one of the only few
Companies in China that offers one-stop
comprehensive waste treatment services such as
recycling ,incineration and landfill - Only a few reputable environmental companies with
successful BOT experience in the market - First company in the industry in China to utilize
German Lipp technology for municipal sludge
treatment
18Growth Strategy
- Expand industrial waste processing capacity as
new global companies open facilities in Dalian
and surrounding areas - Seek new Municipal Build-Operate-Transfer (BOT)
projects and expand capacity of existing projects
to increase long-term, recurring revenue stream - Work with global industrial leader (Germany Lipp
Co.) to capture incremental environmental
engineering opportunities - Penetrate new geographic markets in China by
leveraging existing operating experience and
core, patented technologies - Continue to place great emphasis on technical
research and development while leveraging key
university partnerships - Commercialize the Waste Catalyst Treatment
segment, Dalian Zhuorui Resource Recycling Co. - Maintain stringent cost controls to optimize
margins - Pursue complementary acquisition targets for
expansion
19Project Pipeline
- Industrial Waste
- New industrial waste treatment Facilities in two
key locations in Liaoning Province - Centralized Hazardous Waste Treatment Facility in
Hunan Province - Municipal BOT
- Two municipal waste water treatment plants in
Dalian - Two sewage sludge treatment projects in Liaoning
Province - Engineering
- Organic waste treatment project in Liaoning
Province, Jiangsu Province, Fujian Province,
Shanghai - The Company will utilize different sources
including bank loan, joint venture, co-operation
with local operators, etc. to finance future
projects - These projects are in different stage of
negotiation and none of these contracts has been
signed
20Qualifications
Permit for comprehensive operation on hazardous
waste issued by provincial environmental
protection authority
Certificate for operation of environmental
protection facilities granted by National
Environmental Protection Bureau
Certificate of ISO14001 ,ISO9000, ISOl8000
Management System
21Research Development
- Established Dongtai Industrial Waste Disposal
Technology Center in conjunction with Dalian
University of Technology 22 engineers and 9
analysts - The RD team is comprised of specialists in
environmental technology - Closely cooperates with several Chinese
universities and research institutes including
Dalian Institute of Chemical Physics of the
Chinese Academy of Sciences - The Company has been granted multiple local
government awards and is recognized by SEPA and
the Ministry of Science and Technology as a key
environmental technology provider - Currently owns 5 patents in China
- The Disposal of Powered Ink Waste from Copy
Machines - Consecutive Destructive Distillation Stove
- Plasma Fusion Pyrolysis Device
- The Disposal of Waste Catalyst
- Method and Equipment for High-Efficiency
Solid-Liquid Separation Under High Pressure
22Revenue Composition
During the year of 2008, revenue came primarily
from the Industrial Waste Treatment and Recycling
Services segment (Dongtai). Revenue streams
will be further diversified in 2009.
23Competitive Advantages
- High Barriers to Entry Licenses granted by the
central government to engage in industrial waste
treatment business in Dalian and surrounding
areas - One of the first companies to be granted a permit
to conduct an industrial waste treatment business
by SEPA, and provincial license to operate
hazardous water treatment and disposal facilities - The Companys facility expansion and geographic
location is prominently featured in the current
national centralized hazardous waste disposal
facility plan established by the National
Development and Reform Commission - Reputation leading environmental protection
company in Liaoning Province - Long-term Stable Relationships Over 17-year
operating history based upon a commitment to
provide high quality products and services - Diversified Customer Base more than 650
customers including private enterprises,
municipal institutions and universities - Recurring Revenues New BOT projects provide
visibility through long-term recurring revenues
24Competitive Advantage
- Comprehensive Services One of a few companies
in China, and the only one in the Liaoning
province, which provides a comprehensive array of
services including solid waste treatment, waste
collection and transportation, environmental
protection services, storage, landfill and
on-site management. - Extensive Investment in Facilities and
Technologies Designs and develops proprietary
processes and technologies to meet customer
needs. - Experienced Management Strong industry
backgrounds supported by environmental protection
expertise.
25Management Team
- Jinqing Dong Chairman of the Board, CEO
- Founded the Company in 1991 and possesses over 20
years of experience in the waste management
industry. - Between 1982 and 1991, Mr. Dong worked for the
Dalian Environmental Science Academy, where he
was primarily engaged in research relating to the
disposal of waste gas, waste water and industrial
residue and the evaluation of the environmental
effects of industrial projects. - Mr. Dong graduated from Dalian University of
Technology in 1982 with a bachelors degree in
environmental engineering. - Jun Li Chief Operating Officer and Director
- Appointed as Chief Operating Officer in March
2008. He has served on the Companys board of
directors since October 2006. Mr. Li has also
served as the COO of Dalian Dongtai since 1998. - From 1982 to 1993, he was employed by Dalian
Vacuum Flask Factory and Dalian Yili
International Chemical Co. Ltd as its Director of
Technology and Chief Production Manager. - Mr. Li holds a bachelor degree in environmental
engineering from Dalian University of Technology. - Xin Guo Chief Financial Officer and Director
- Served as the Companys Chief Financial Officer
and a member of the board of directors since
March 2008. - Ms. Guo has served as Chief Accounting Officer
for Dalian Dongtai since October 2003 - Ms. Guo graduated from Beijing University of
Commerce in 1992 majoring in Auditing, and
received her masters degree in Administration
from Chinas Northeastern University in 2002. - Darcy Zhang Corporate Secretary
- Joined the Company in 2004 and has been engaging
in Investor Relations management for several
years. - Mr. Zhang received a Masters degree in
International Banking and Financial Studies from
the University of Southampton, UK in 2004.
26Strong Growth Profitability
Revenues (000)
Net Income (000)
29
40
- 2005 2008 Revenue and net income grew at 40.0
and 60.0 CAGR, respectively. - 2008 EPS was 0.35, up 25 from 2007.
- 2007 Net profit margins were 38.7 and 35.5 for
the year of 2008. - Operating Margins greater than 40
- Net cash provided by operating activities for
2008 was 4.9 million. - Dongtai receives tax reductions Effective Tax
Rate for 2008 9, 2009 10, 2010 11
27Key Financial Metrics
Year ended December 31, 2008
Based on 12 month 2008 performance unless marked
otherwise
28Year-Over-Year Results
29Balance Sheet Summary
30Investment Summary
- Chinas industrial waste treatment industry is
still in its infancy while economic and
regulatory drivers support future growth - Highly regulated industry and stringent license
requirements both from SEPA and local governments
create high barriers to entry - Dongtai possesses all necessary operating
licenses and approvals - 2005 2008, revenue and net income CAGR grew
40.0 and 60.0 respectively. - The management expects core waste treatment
business to grow about 20 annually - Significant growth opportunity with new BOT
projects, which are operated for 20-25 years and
generate high visibility through recurring
revenues. - Additional growth opportunities including Lipp
joint venture, geographic expansion, and
complementary acquisition opportunities - The waste catalyst treatment segment will
commence production and generate revenue in 2009,
while driving future growth and enhancing overall
margins - Strong RD has created patented, proprietary
systems and solutions - 17 years of industry experience, strong
management team with significant inside ownership
(69.8) aligns their goals with the shareholders
31Contact Us
- Company Contact
- Ms. Guo Xin, CFO
- Tel 86-411-8581-1229
- E-Mail hellenguo_at_chinaciwt.com
- Mr. Zhang Dazhi, Company Secretary
- Tel 86-411-8259-5339
- E-Mail darcy.zhang_at_chinaciwt.com
- Web http//www.chinaciwt.com
- Investor Relations
- Matt Hayden, President
- HC International, Inc.
- Tel 1 (561) 245-5155
- E-Mail matt.hayden_at_hcinternational.net
- Web http//www.hcinternational.net
32Thank You