UV Disinfection Replaces Chlorine as the Disinfection of Choice
Service Systems International Ltd.
OTCBB: SVSY
May 11, 1999
UV DISINFECTION REPLACES CHLORINE AS THE DISINFECTION OF CHOICE
The recognition of the strength of the emerging Waste Water and Potable Water treatment market potential, and the demand by public officials and the population at large for environmental safe, chemical free methods of disinfection, is driving the marketplace to replace existing Chlorine disinfection with alternative technologies.
Many concerns have been raised about Chlorine; the traditional disinfection processes. Safety hazards associated with handling and storage, often in populace areas, are of grave concern. Some water borne pathogens, such as Cryptosporidium survive this process. Byproducts of the disinfection process, such as chloroform and other chlorinated organic compounds, may be carcinogenic. Stringent regulations are now in place for drinking water due to these and other concerns.
Current estimates of the industry reveal that approximately 90 to 95% of all North American municipal wastewater disinfection systems are chlorination-based systems and 5 to 10 percent are UV based systems.
Over the past year, it is estimated approximately 20-25 % of all new or upgraded North American municipal wastewater treatment plants installed UV based disinfection systems. This reflects a significant increase in the UV based systems share of the total wastewater disinfection market. Consequently, firms participating in the ultraviolet sub-market of the wastewater treatment industry are considered in the growth stage.
Service Systems currently manufactures and markets the world's most advanced state of the art Ultra Violet disinfection system, UltraGuard™. This technology with its patented components can provide disinfection with hydro energy costs as low as 12% of competing systems. In addition to this, the overall operating and maintenance (O & M) costs are about 30 to 40% of competing UV disinfection systems.
Industry awareness in the UltraGuard™ System of late is due to the recognition of the reduced energy costs reflected in annual O & M savings. For every lamp installed savings of $4,939.00 are achieved when compared to medium pressure UV Technologies.
A typical comparison for one of our site-specific projects under review against a Medium Pressure UV lamp system would generate Operation and Maintenance savings as follows.
Annual Electrical Power Consumption:
UltraGuard™ - 2,596,979 KW
Competitor X - 22,425,600 KW
20 year Annual guaranteed operations and maintenance Savings: $68,125,828
Given the substantial savings, combined with fewer lamps, reduction of site labor costs and a smaller equipment footprint, market share should increase. The Company currently lists over 30 agents and sales representatives in its worldwide market. Service Systems' bid inquiry book lists over US$130 million in projects with additional inquiries increasing dramatically.
ULTRAGUARD™ UV SYSTEM UNDERGOES CALIFORNIA TITLE 22 TESTING
In December 1998, Service Systems International Ltd shipped an UltraGuard™ UV System, Product Demonstration Unit (PDU) to the County Sanitation Districts of Los Angeles. The program, conducted and paid for by the County, is testing the UltraGuard™ UV system's ability to disinfect wastewater to California Title 22 Guidelines. The disinfection requirement for discharge of waste water under typical requirements usually varies from 100-1,000 fecal coliforms per 100ml. Title 22 requirement states discharge of coliforms must not exceed 2 total coliforms per 100ml. Title 22 represents a stringent test protocol used as a precursor for the Company's UV product in reuse and sale of wastewater for agriculture and other purposes.
Test results have been exceptional when compared to other UV technologies. A comparison of the relative flow rate treated per lamp in Title 22 testing by the competing systems follows:
Flow Rates
UltraGuard™ High Intensity Low Pressure (HILP):150 gpm
Standard Low Intensity Low Pressure (LILP): 4.5 gpm
High Intensity Medium Pressure (HIMP): 45 gpm
California testing will be completed in late May or early June. A report will be compiled by the Los Angeles County research team and will be presented in the summer in conjunction with the Water & Wastewater Industry Energy Efficiency Forum in San Diego, California.
On receiving Title 22 Approval, the opportunity for Service Systems to compete with UV suppliers such as Calgon Carbon Corporation (NYSE: CCC) and Trojan Technologies Inc (TSE: TUV) with their presence in California and other states is impressive. Achievement of this designation would further validate the Company's patented UltraGuard™ UV system technology and enhance the system's competitive advantages. These advantages will produce increasing acceptance of the product and allow the Company to move forward for strategic partnering with other significant players.
The water-wastewater treatment UV disinfection sub-industry is expected to experience rapid growth in the coming years. In fact, total expenditures over the next 5 years for water and wastewater are expected to grow by over 10% per annum to almost $640 billion by 2003.
Service Systems International, Ltd. through its subsidiary UV Systems, manufactures and markets UltraGuard™, a state-of-the-art, patented ultraviolet (UV) disinfection system for municipal liquid waste, process and industrial water, potable and other water resources.
**Certain of the foregoing information are foreword-looking statements regarding future events or the future financial performance of the company, and are subject to a number of risks and other factors which could cause the actual results to differ materially from those contained in the foreword-looking statements. Among such factors are: general business and economic conditions, customer acceptance of and demand for the Company's products, the Company's overall ability to design, test, and introduce new and improved products on a timely basis, regulatory constraints, and the risk factors listed from time to time in documents filed by the Company with the SEC. |
