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Filed under: Trees, Water and Critical Resources

Where money grows on trees

The investment landscape of the 21st century has become increasingly inhabited by short-term thinking – instant messaging, high-speed wireless stock flippers and day-trading speculators who must take their Blackberries to the beach in the summer so as not to miss a minute of the action. In this crazed quest for fast, easy money, the path is littered with losers – the occasional successes overshadow the more steady drip of losses, much as a gambler slowly going broke at the one-armed bandit.

But there are some investors who pay scant attention to the bungee-like stock market, patient enough to be able to filter or ignore the constant media barrage in order to remain focused on still far away goals. Many of these have found solace from the market frenzy by investing in trees, Continue…

Water Part 3

The Business of Water

My mailbox is continually bombarded by representatives of the Canadian banks, mutual fund companies, venture capital seekers, stock promoters, spammers, Nigerian businessmen and others, all hyping their product and offering to help me promote their latest hot investment to the general public. This marketing blitz has just moved into overdrive with the recent announcement of “this century’s most important investment opportunity.”

Not my words, that bold pronouncement comes at you from Criterion Investments, a division of Toronto-based VenGrowth Asset Management. Talk about marketing budgets, VenGrowth just had Al Gore and 1200 guests for cocktails and presentations in Toronto, where they promoted Canada’s first actively managed water fund, the Continue…

Water Part 2

The Business of Water

The securities industry in Canada has begun packaging a variety of products that would allow investors to profit from the anticipated growth of companies in the water business. There is little doubt that the private sector has a crucial role to play in solving challenges facing a world that depends on water. But is this the investment opportunity of a generation, or a sector with so many ethical questions, social predicaments and environmental risks, that investors are better off staying far, far away? The answers may lie somewhere in between.

Now nobody wants Coca Cola, for instance, to own the local source of water (think of the outrage from Pepsi drinkers). But in the strategic planning sessions at Coca Cola, I really doubt they are discussing how to Continue…

Water Part 1

The Business of Water

“Nowadays people know the price of everything and the value of nothing” Oscar Wilde

I have never had to carry water home on my head, but I have sucked feverishly on a piece of hose to start it flowing down a hill into my house. This was quite some time ago, on an acre of property in the mountains of southern Spain. This was not the plains where most of the rain fell, but the parched south where normally not a drop was to be seen from spring through fall. The weather held strategic place in the scheme of life here, and winter rains were key to survival. Without them wells and springs ran dry, and life in El Colmenar was affected on a grand scale.

Living outside the town’s water supply meant a daily ritual that started with Continue…

All That Glitters

Recalling the acrimony that surrounded Wal-Mart’s push into our community a few years ago, I wonder how the citizens of the Comox Valley would respond if a major multinational corporation were to come up with a proposal so controversial that it would dwarf the local Wal-Mart debate by comparison. A proposal that would create thousands of highly paid new jobs and attract a slew of support businesses to the valley region. But one that would have grave concerns surrounding the environmental and social impact on our community. Can you imagine the rancour and spittle that would fly with the announcement of a major gold mining development beside the Comox Glacier? Fortunately such a proposal would not involve the actual use of slave labour, as it did under Roman, Egyptian, Indian, Phoenician and other empires of history, but the mining of gold from a site located beside the primary watershed of the Comox Valley would clearly have an extraordinary impact on life as we know it in this region.

So you can perhaps picture the controversy brewing around the Pascua Lama project, Barrick Gold’s (ABX-TSX) proposal to Continue…

Water, Water Everywhere…

Have you heard talk of the world’s next dominant international cartel? That would be OWEC, not the OPEC that influences global markets with every utterance, but OWEC, the Organization of Water Exporting Countries. Canada is set to become a charter member, and it won’t be long before Canadians, like the petroleum-rich Saudis, are awash in cash

One opportunistic Canadian entrepreneur has promoted the idea of towing 5 million gallon bags of fresh water from glaciers outside Sitka, Alaska, and across the oceans to regions of the world where water supplies are desperately lacking. His Vancouver company proposes moving 4.8 billion gallons of water over the next 30 years.

So while the latter is fact, but the former still fiction, it wouldn’t be hard to argue that the most critical and precious commodity on earth is water. As Canadians grumble about metered water use and lawn sprinkling restrictions, the lives of millions of people around the globe are threatened by inadequate or unhealthy water supplies.

According to the first global, comprehensive United Nations evaluation of world water resources published in March 2003, at least 7 million people a year die of waterborne diseases. By the year 2050, 7 billion people in at least 60 countries may be facing water scarcity, UN experts warn.

The chorus of issues surrounding water has become louder and more urgent with each passing year. As far as water quality is concerned, water experts have come to question the sustainability of transferring Western sanitary concepts, with their traditional emphasis on centralized, large-scale solutions used in big cities, to the rest of the world. They have recognized the importance of decentralized, cost-effective, small-scale wastewater treatment and reuse of water.

One of the acknowledged global leaders in applying these practices is Oakville, Ontario based Zenon Environmental Inc. (stock symbols ZEN and ZEN.NV.A on the TSX), an environmental technology company that provides advanced membrane products and services for water purification, wastewater treatment and water reuse to municipalities and industries around the world. At the core of Zenon’s products is an ultrafiltration membrane, a patented, self-contained system that makes water biologically safe for consumption, without chemicals, by physically removing suspended solids, viruses, parasites and bacteria from the water.

In the aftermath of the Asian tsunami earlier this year, Zenon provided 54 of their Homespring filtration units through World Vision, together capable of supplying safe drinking water to over 350,000 tsunami survivors in India and Sri Lanka. Zenon also supplies filtration units to Canada’s Disaster Assistance Relief Team (DART).

In 2004, Corporate Knights, a business publication addressing issues involving corporate responsibility, ranked Zenon as Canada’s top corporate citizen for the second time. Zenon has also been selected as one of Canada’s Top 100 Employers for five consecutive years.

Zenon closed trading on Easter weekend at $20.60, near the low end of it’s recent 52-week range of $19.01 – $24.65. This company is no speculative play on the Venture Exchange, but a consistently profitable company with over 1100 employees in 12 countries.

In the year ended December 31, 2004, Zenon reported revenues of $236,022,000, profit of $16,990,000, and earnings per share of $0.55, respectively up 28%, 36% and 22% from the previous year. Their financial results have been impressive by any measure, and in CEO Andrew Benedek’s discussion of the 2004 numbers, he also gave indication of Zenon’s future prospects.

“We are seeing more demand for our technology all over the world as we focus on strengthening our presence in newly emerging markets,” stated Mr. Benedek. “In the fourth quarter, Zenon booked $101 million in new orders, a sizeable improvement over the same period a year ago of $58 million.”

“North America is still a large part of our business,” continued Benedek, “and we see no slowdown in the growth of orders there. But a potentially larger area of growth for us exists in the international realm.” While Zenon currently derives about 10% of their revenues from the Asia Pacific region, they are just beginning to scratch the surface of the Chinese market.

In China, water reuse is a critical component of growth as the country currently faces significant water shortages, particularly in the industrial areas in the north of the country. In 2004, Zenon secured $15 million in industrial orders from China, a tiny fraction of the potential market there.

In recognizing Zenon Environmental as Canada’s top corporate citizen, Toby Heaps, editor of Corporate Knights magazine stated, “It’s not enough to just have a nice environmentally friendly product, you have to be good across the board. We’re proud to have Zenon in the top spot because they go beyond the standard we expect of a Corporate Knight to being part of the restorative economy, a company that instead of leaving footprints is filling them.”

More information about Zenon Environmental, including annual reports, historical reviews, and Zenon’s Code of Business Conduct and Ethics, is available on the company’s website at www.zenon.ca.

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