The Phoslock Environmental Technologies Ltd (ASX: PET) share price is edging higher today after the company provided an update on the status of its Chinese operations.
What does Phoslock do?
Phoslock is an international environmental company specialising in engineering solutions and water treatment products to remediate polluted lakes, rivers, canals and drinking water reservoirs. Headquartered in Sydney, Phoslock also has offices in Brisbane; Beijing and Changxing, China; and Manchester, UK.
Chinese operations market update
This morning, Phoslock announced it had re-opened its Changxing factory in China on 15 February, with production recommencing on 17 February.
Pleasingly for shareholders, the company noted that production is currently building to back to normal levels. Last week, the company had transported four containers of its Phoslock product to the Shanghai export port which have now been loaded and are bound for Brazil.
This week, the company added that its Chinese factory received raw material deliveries of both bentonite and lanthanum chloride from its usual suppliers.
Additionally, Beijing sales office re-opened earlier this month on 10 February and work has now recommenced on several multi-year projects already underway.
A large portion of Phoslock's business in China is south-west of the country in Yunnan province. The company commented that fortunately, this is an area where there are currently very few cases of coronavirus reported so far.
Applications to Yunnan projects have been scheduled by the company to recommence in March, as originally planned.
Management commentary
Chairman Laurence Freedman AM commented: "Despite concerns about the coronavirus, the Company's business is proceeding as planned. The factory production is ramping up, supply of raw materials is unaffected and shipments from China have restarted."
"Importantly all staff both at the factory and Beijing are unaffected and functioning normally. We are proceeding with plans to expand production capacity," he added.
Mr Freedman also went on to highlight that Phoslock's balance sheet remains debt-free with cash and receivables currently standing at $30 million.
