Darco Water said yesterday it is confident of posting revenue of at least S$100 mln for FY2008 after securing seven environmental engineering projects valued at about S$25 mln.

The total project orders to be delivered in FY2008 now stand at S$126.00 mln.

Darco’s FY2007 revenue was S$87.6 mln.

The bulk of new orders come from the electronic and semi-conductor sectors, which make up almost 80% of the total orders.

But the two major orders of the bunch include Darco’s two wastewater treatment projects in Taiwan valued at S$12.3 mln and the repeated orders for Phase II of Seagate Malaysia’s facilities in Johor for air management and wastewater treatment systems valued at S$11.5 mln.

In another announcement, Darco said its lawsuit against insurer ECICS over an export credit insurance claim has resulted in the latter paying up. ECICS paid up “a substantial part of the claim” on 17 March for the purpose of compromise only and without any admission of liability, Darco said.

The unpaid claim had dragged down Darco’s FY2007 profit by 95% to S$120,000. It had made a one-time provision of S$4.6 mln relating to sub-contracting works arising from a Taiwan-based company, Hsin II, and was expecting the insurance claim from ECICS to come through.

~Jin San’s take~
Hear ye, hear ye – something has happened and the wastewater treatment industry will not be the same again. This momentous event happened last month, when Dean Kamen appeared on US talk show The Colbert Report and showed for the first time a water purifying machine. The machine, which Kamen (the inventor of the Segway - http://www.segway.com/) calls a Slingshot, can purify anything – ocean water, urine, sewage, you name it.

It looks about the size of a concert speaker, requires no filters, and can operate using an easily-obtained fuel: cow dung. Besides generating 1,000 litres of drinkable water a day, the Slingshot can generate electricity, too. Check out the marvelous invention here:
http://www.youtube.com/watch?v=EmTgVNFaDig

Kamen is trying to reduce the price of making the Slingshot to about US$1,000 to US$2,000. The prototype he showed on The Colbert Report was made for US$100,000, though. Price will be a major stumbling block - The One Laptop Per Child Project (http://laptop.org/), which had a similar humanitarian aim, took a long time to reach an acceptable US$175, which is much higher than its original target price of US$100.

But with more media coverage, the proper connections, critical mass, and further improvements, it will become a possibility for the Slingshot to help the 1.1 bln people in the world who don't have access to clean drinking water, and the 1.6 bln who don't have electricity.

On the other hand, this invention could potentially give wastewater treatment companies like Darco a run for their money. If this quantum leap in technology takes off, it could mean third world villages and small towns cutting out the middlemen to operate wastewater treatment plants and buying a bunch of Slingshots to produce clean water. The 1,000 litres of water a day the Slingshot can generate will hydrate a lot of human beings indeed. If each person drinks 1.5 litres of water in a village, I’m thinking a couple of Slingshots would be enough to serve the average village with a population of say, 1,000.

But we are only talking about the first generation of Slingshots. For sure, there will be variations and technological improvements in the future. Plus, the beauty of this invention is that it does not need anyone to operate it, unlike wastewater treatment plants. Which means cutting out the Operating part of BOT (Build, Operate, Transfer) or DBOT (Design, Build, Operate, Transfer) contracts.

To be fair, the wastewater treatment companies need not feel threatened for now because the plants they build and operate are much bigger and size. Plus, they are getting contracts at municipal and town levels. But I would not be as complacent as to discount the Slingshot as an idea that might not take off. Dean Kamen’s other invention, the Segway, hasn’t really revolutionized the way we travel, either. But he gave the Slingshot its name as a reference to the simple weapon that David used when he faced Goliath. In reality, the Goliath would be the billions of people without drinking water in the world. But this little Slingshot might take down more than just the water problem – it might take out a few water companies along the way.

But as with all technological innovations, we have to wait and see whether it will rise above the shadow of ‘just a prototype’.

As always, please see your licensed financial advisor before making any investment decisions.