Private Customer - Case Study

Bali is an Indonesian island with a population of over four million located between Java to the west and Lombok to the east. Bali is one of the world’s premier island tourist destinations, home to numerous four and five star resorts. Bali is renowned for its highly developed arts, beautiful surroundings (both mountain and coastal areas), diverse tourist attractions, excellent international and local restaurants, and the friendliness of the local people. Bali’s water supply is typically poor quality and not drinkable straight from the tap.  Hotels and residences depend largely on bottled water and/or boiled tap water for consumption.

Nusa Dua, one of the primary tourist areas of Bali, Indonesia, has a target customer profile consisting of tourist resorts and vacation/luxury residences comparable to our retail service area on Grand Cayman. We believe the water demands of these properties in Nusa Dua will soon exceed the water supplies that can be provided to the area by the local public water utility, and that other areas of Bali will also eventually experience fresh water shortages.

Bali market is presently very price-sensitive, the cheaper supplies of fresh water (principally wells) on which our target customers currently rely are limited and declining.  We believe the extensive use of desalination will be necessary to deal with the probable future water shortages in Bali.

Seawater reverse osmosis (SWRO) has not been employed to any meaningful extent in Bali, thus, we concluded that to obtain customers in Bali we must first demonstrate the viability of SWRO as well as our capabilities and expertise. Consequently, we elected to construct this plant before obtaining water supply agreements for its production. We believe sufficient demand exists in Nusa Dua to enable us to sell all of the plant’s capacity.

During the latter half of 2012, we commenced, through our subsidiary, PT Consolidated Water Bali, the construction of a seawater reverse osmosis (‘‘SWRO’’) plant with an initial capacity of 264,000 gallons per day in Nusa Dua.  During 2014, we expanded the capacity of this plant to 790,000 gallons per day. We believe sufficient demand exists in Nusa Dua to enable us to sell all of the plant’s capacity. The quality of the water we are providing in Bali is vastly superior to any other large scale sources available in the market and our technology constitutes a drought-proof supply.