After missing our Kyoto emissions reduction target and being called the “dirty old man of the climate world” by the UK’s Guardian for the ever controversial oil sands in Northern Alberta, it is fair to say that Canada’s environmental reputation has slipped. Some of our smaller public companies, however, are trying to pick up the slack. Our March issue is all about up and coming cleantech stocks, such as Guelph’s Biorem (TSXV:BRM)
5 Questions with Peter Bruijns of Biorem (TSXV:BRM)
1. (from LD in Ottawa) I saw you recently opened an office in China and completed some sales to the Chinese market. Can you breakdown where,
geographically, your sales come from and if you expect to make more sales
PB: We have made a significant investment in China (now having 5 full time
staff on the ground there). Our sales structure in China consists of a
network of sales representative organizations that pursue opportunities in
industrial and municipal markets. To date, we have received orders from
Shanghai, Beijing, Tianjin, Changshan, Wuhan, Hainan Island, amongst
others, which together, represent a diverse area of China. We are
committed to developing our business in China and believe it to offer a
significant growth opportunity for Biorem.
2.(from Stan in Red Deer) Biorem has been around a long time. Do you feel
like the wind is finally at your back in terms of political will and
public knowledge to employ environmental solutions?
PB: The answer to this question is a simple ‘Yes’. Regulators struggle
with two forces, the need to enforce environmental standards for the
protection of human health and the recognition of the cost of providing
that protection as it affects economic competitiveness. Over the past
three years, Biorem has been focusing on driving down product costs
through innovation, while improving the performance of the installations.
We have made tremendous progress on this front, having reduced product
costs by nearly 40%. Our strategy is really quite simple: move our
technology solution down the cost curve so as to become the preferred
technology by both the regulator and the firm required to implement the
3.(from Dennis in Toronto) I am an investor who is new to your company. I
am sorry if this sounds simplistic, but can you describe to me in layman’s
terms what your company’s technology does and how it is better than
previous solutions or competitors?
PB: Biorem offers a technology referred to as biological air emission
control. Essentially our installations hold a spherical type media in a
tank upon which we create the right conditions for colonies of bacteria to
emerge and grow. The contaminated air enters the tank and the
contaminants absorb onto the media surface which is kept wet. Once this
happens the bacteria ‘eat’ the contaminants in the air. Biorem’s key
competitive advantage is its media, which has many more times the surface
area upon which to grow bacteria compared to that of our competitors. This
means reduced costs and a far higher emission removal performance.
4. (from Art in Sherbrooke) Your Gross Profit as a percentage of sales has
been increasing now for some time. Why is that?
PB: Even though we are operating in a tough competitive market, we have
managed to maintain or grow our margins because we remain committed to
product development and cost reduction. We see these as key competitive
advantages for Biorem now and in the future.
5.(from Terry in Montreal) Because you deal with government and various
levels of bureaucracy is your sales cycle longer than you think it would
be for a company that deals mostly with the private sector? If this is the
case do you concentrate your energies on earning repeat business or
recurring revenue streams?
PB: Our municipal sales cycle can be upwards of two years. However, on
such projects we tend to position ourselves as a partner that works with
the municipal engineering firm, which often leads us to become the base
bid technology on a project. Industrial sales cycles can vary
dramatically, but on average will be nine months to a year. Biorem is
fairly new to the industrial market, but we recognize that it provides a
greater opportunity for recurring revenue with repeat customers and in
system performance and maintenance.