NF Energy Saving Corp of America (OTCBB: NFES) is a manufacturer of energy conservation equipment and an integrated energy efficient solution provider combining patented equipment, technical services and energy management project capacities targeting the billion dollar Chinese market.
Strategically headquartered in Shenyang city of China, NFES caters both the demand-side and supply-side energy technologies of China by engaging in manufacturing and sales of energy-saving butterfly valve products in China. The company is also among the top three comprehensive solution providers in energy conservation & pollution reduction, as well as a major contractor of Chinese EMC (Energy Management Contract) projects.
NFES plans to become the largest comprehensive energy-saving solution provider and alternative energy equipment manufacturer in China within 3 years.
Revenue Streams
(1) Manufacturing of Energy Saving Valves & Renewable Energy Generating Facilities
At NF Energy Saving Corp, they produce and sell butterfly valves, which serve as flow control devices regulating fluid flowing through pipes to reduce the energy consumption in large hydroelectric plants, coal-fire plants and urban water supply and drainage system of China. Their primary market of butterfly valves is the infrastructural construction projects and public utilities, although the products are also easily transferable to serving other public- and private-sector markets at home and abroad.
The company extends to the supply side energy technology by manufacturing and selling mechanical hardware of 1.5MW wind turbine to capture the booming wind energy supply in China. They also provide to the market biomass boilers equipped with hydrous pyrolysis technology as the interest in sustainable fuel sources grows in China.
(2) Energy Conservation & Pollution Reduction Technical Services
NFES provides their customers with energy-saving technical services that are tailored to meet specific needs in energy conservation across various Chinese pillar industries, e.g. municipal infrastructural facilities, power plant, coal mining, metallurgy, petrol & chemical etc. These services are generally billed on a time-cost plus basis. Revenue is recognized when service is rendered and accepted by the customers.
(3) Contractor to EMC (Energy Management Contract) Projects
Rising and unpredictable energy costs make it difficult for the company's clients to manage their budget or plan for facility improvements. NF Energy Saving Corp understands, and their energy experts can help these clients translate energy challenges into opportunity with an energy management contract ("EMC").
The concept behind EMC is simple: the client leverages their utility bill savings to pay for energy saving infrastructural improvements. NFES's revenue generated from performance contracting is contingent on the actual level of energy savings achieved.
NF Energy Saving Corp. has accumulated over 10 years of contracting experience in EMC projects and has achieved more than 300 successful cases in 47 cities in China and 19 countries globally.
The major clients are spread in China's infrastructure construction engineering field (water conservancy and electric power project), infrastructure facilities engineering field (water-supply, heat-supply, gas-supply, and wastewater treatment), and China's pillar industry field (metallurgy, petrol & chemical, building material, automobile, coal, and electric power etc.). 
Patents
The Company has developed more than 10 proprietary technologies and patents, among which 2 patents are recognized internationally advance and 3 domestic advance.
Staffing
NF Energy Saving Corporation of America currently has 220 employees, including 40 R&D engineers, 66 projection managers, 20 management member, and 94 technical workers.
Other Qualifications
- Member of Chicago Climate Exchange (CCX)
- Vice-Director of China Energy-Saving Council
- Associate Director of China Energy-Saving Service Industry Association
- Associate Director of the Energy-Saving Professional Committee of Domestic Resource Utilization Association
- Vice-Director unit of Liaoning Province Energy Utilization Council
- Chinese representative firm of the Global Bank/ Global Environment Funds (GEF)
- The CompanyÂ’s brand, "TF" recognized as Liaoning Province Famous Brand and Well-Known Product
Energy-Saving Reconstruction Project Market Overview
The CompanyÂ’s energy-saving reconstruction projects mainly focus on Chinese infrastructure industries (metallurgy, petrol & chemical, coal, power plant, building materials, etc...), which covers around 58% of China's energy-saving market.
According to the Chinese governmentÂ’s "Eleventh Five" plan, the government requires that the unit standard coal energy consumption per RMB10,000 GDP shall be decreased from 1.22 tons to be less than 1 ton, or 20%; the unit water consumption of industrial value-added shall decrease 30%. During the "Eleventh Five" period (2006 to 2010), the emission volume of major pollution shall decrease 10%, the emission volume of sulfur dioxide shall decrease from 25.49 million tons to 22.95 million tons from 2005 to 2010; the emission volume of chemical oxygen demand (COD) shall decrease from 14.14 million tons to 12.73 million tons; the national urban wastewater treatment rate shall be no less than 70%; and the industrial solid waste comprehensive utilization rate shall be higher than 60%.
The "Eleventh Five" plan also states that China's energy-saving investment market volume will be no less than RMB1,000 billion. According to official statistics, industrial enterprises occupy 50% of total energy consumption, among which the CompanyÂ’s clients mainly are these high energy consumption enterprises spreading in power plant, metallurgy, petrol & chemical, coal, power plant, building materials, and urban infrastructure facilities (heat network, water network, gas network). So the market potential of energy-saving is very large.
In order to complete these energy-saving objectives, the State Council held a national energy-saving & pollution reduction working meeting in April 2007, the meeting brought forward 45 items of works in 10 aspects, established leading groups of National Weather Change Response and Energy-Saving & Pollution Reduction, and published Energy-Saving & Pollution Reduction Work Distribution of Ministries. In November 2007, the Ministry of Finance published Financial Allowance Fund Management Interim Measures for Energy-Saving & Pollution Reduction, which will award allowance to saved energy volume after enterprises implementing energy-saving & pollution reduction reconstruction projects, and will implement ten important energy-saving projects with fiscal investment of RMB7 billion, which will reduce around 35 million tons of standard coal consumption annually. Besides, the Ministry of Finance will publish the Management Measures of Central Budgetary Fund for High-Efficient Lighting Product Popularization. In 2008, the Chinese government will popularize 50,000,000 energy-saving lamps nationwide.
Large Water Power and Fire Power Flow Control Equipment Market
In China and USA, the power plant has the largest demand for large-sized flow control equipments when compared with other industrial enterprises. It is estimated that the market volume in China will be $11.46 billion in 2010, and over $110 billion globally.
The large-sized flow control equipment produced by the Company are widely utilized in domestic large water power, fire power plants, and urban water supply & drainage infrastructure facilities. For example, Shanghai High Bridge 2*1,000MW (million watt) Supercritical Coal Fired Setting Project, Shanghai Caojing Power Plan 2*1,000MW Supercritical Coal Fired Setting Project, State Power Zhejiang Beilun 3rd Power Plant Ltd., Co., Zhejiang Zheneng Leqing Power Plant Project, Indian Tengda Power Plant Project, water power plant in Burma, and power plant projects in upstream and downstream of DakrÂ’tih river in Vietnam.
Wind Power Pillar Equipment Market
The development of China's wind power industry initiated in 1986, and enter sweeping contraction period in 1996 after trial examination phase and introduction phase. Since the base China wind power industry is weak at that time, the total installed capacity of wind power plant is relative small and most plants were utilizing wind generator in thousand watt capacity level.
In 2006, China wind power market had been ranked in fifth in the world wind power market. The giant wind power market demand directly resulted in the shortage of wind power equipment accessories globally. In 2006, the total installed wind power capacity was 2,604MW. According to China Energy Development Plan, the yearly wind power installment capacity will be 1,900MW averagely from 2006 to 2020, with annual investment of RMB15.2 billion, as it was estimated that the real investment will higher than this amount.
Biomass Product Market Overview
China's government has put the R&D and industrialization plan of biomass resource into the National Middle & Long-Term Development Plan as the strategic emphasis to mitigate the petrol energy crisis.
China is one of the largest agricultural countries in the world with various crops in large quantity. Paddy, corn, and wheat are three major corps. The straw generated by these crops is able to become the major biomass resource. In 1995, the total straw output in China was 604 million tons. There will be 513 tons of straw with a retrievable ratio of 85%, which is equivalent to around 310 tons of standard coal. The straw output from paddy, corn, and wheat occupies around 84.3% of the total straw output, which is equivalent to around 250 million tons of standard coal. In recent years, the straw output in China has increased continuously in an annual average growth rate of 2.33%. However, at the moment, only 49% of the straw are utilized flully as domestic fuel, feedstuff, and industrial raw materials; besides, there were around 51%, or 308 million tons, able to be utilized as energy, among which 190 tons had been used in cooking and heating and 120 tons were dropped or burned in farm land, which not only wastes resources, but also pollutes the environment. So, China has rich biomass resources and giant development potential.
In China's village energy consumption structure, biomass energy occupies around 70%, but the utilization method is just direct combustion as fuel, which is only able to utilize around 15% of biomass in low utilization rate. Currently, the designed combustion rate of some biomass boilers is able to reach the same heating level as mineral fuel, whereas the practical operation efficiency and environmental protection are not satisfactory. So, the high-efficient biomass boiler produced by NFSE has wide market prospects, whose characteristics of high-efficient, low emission, and high adoptability are tally with the Chinese GovernmentÂ’s energy-saving and industrial policy requirements, as well as finding a new solution for village areaÂ’s drawn resource with substantial economic and social benefits.
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$0.33 (08/26/08)
