with 🎙️ Sebastian Andreassen, CCO, Director and Co-Founder of Cembrane
💧 Cembrane is the world’s largest producer of Silicon Carbide (SiC) membranes for OEMs & System integrators within Water & wastewater treatment.
What we covered:
🍏 How to build a Water Company from scratch in a challenging market and application
🍏 How to shake things up in Membrane Treatments by pushing a challenger technology
🌱 Where to start and how to find early adopters that dare to try new things, why they’re ready to take the plunge, and how you can leverage it yourself
🧮 How key it is to achieve Product-Market Fit and how to do (including, how to define the right portion of the vertical you intend to serve)
🍏 How to sell your baby to a larger company and what it enables (for instance, doubling your production capacity and ambitioning to take a market by storm)
🧮 How ceramic membranes’ higher flux results in a 4-1 better energetical ratio than polymeric ones
🔬 How you can scientifically prove your plant to work over 20 years when your oldest reference is 6 years old
🍏 How ceramic membranes may be easier to operate but also have their own threats, like the ceramic plates you may have at home
🍎 How challenging it is to introduce new technology in the water treatment industry, where risk-taking isn’t exactly embraced
🤝🏻 How the deal with Ovivo was built over time and sounded like a natural evolution
🤔 How that comes with its own challenge, by somehow becoming a competitor to the existing customer base in certain geographies
🍏 Building a company that’s here to stay, outpacing the market, taking calculated risks – and how it does not always turn well, innovation through implementation… and much more!
🔥 … and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨 🔥
Teaser: Cembrane Membrane Treatment
🔗 Have a look at Cembrane’s Website
🔗 Come say hi to Sebastian on Linkedin
is on Linkedin ➡️
Infographic: Cembrane Membrane TreatmentSebastian-Andreassen-Cembrane-Silico-Carbide-Membrane
Quotes: Cembrane Membrane TreatmentSebastian-Andreassen-Cembrane-SKion-Water-Ovivo
These are computer-generated, so expect some typos 🙂
Get Season 2's Summary!
Antoine Walter: Hi, Sebastian, welcome to the show. Thank
Sebastian Andreassen: you. Thank you for having me
Antoine Walter: when I’m really excited to have you, because I have a full plate of topics, which I’d like to discuss with you today. But, uh, you know, I have traditions on this podcast, so I’m going to open with a tradition and that’s the postcard. So you’re going to send me a postcard from lunar and I’m pretty sure I don’t pronounce that one.
Sebastian Andreassen: I would say it’s, it’s close enough. It’s pronounced. So it would be workable if you said it the way you did it. If you came to and visited me and you should definitely know about the, the producers of Silicon carbide membranes, there’s one called Cembrane. This is where I am right now. Honestly, it’s an industrial type of city.
There’s a nice golf course and a nice place to have a good lunch. And otherwise, I, I can’t speak much to this. You
Antoine Walter: mentioned Silicon carbide and you, you mentioned Cembrane, I’m pretty sure you have a link with that company. We’ll come back to that. But for the one that wouldn’t know where Linda are, where that city is, is it to Copenhagen?
So you are in Denmark and I had Haris Kadrispahic from LiqTech on that microphone to discuss LiqTech. You’ve been at LiqTech as well. I was wondering what’s special about Denmark when it comes to Silicon carbide membranes and ceramic membranes.
Sebastian Andreassen: Yeah, that’s a good question. And you’re right. I know Harris from detailing.
I used to work there. I think a, it happened by chance. Back in the nineties, there was a company called no tox that, um, thought of an idea of using Silicon carbide to produce filters for the automotive industry to clean the X-Force from Carson and track. And they had a, I think, a limited success. Uh, but there were a group of guys from that company that then started tick in the year, 2000, roughly, uh, whether it was 99 or 2001, I’m not quite sure.
And they wanted to put a membrane on top of this. Filter that was used for the automotive industry and they wanted to do it on in Silicon carbide. That’s why they, the name is big tech. It stems from liquid technologies. So there have been some, some spin-offs around that early beginning. And today there are at least three companies working with Silicon carbite filtration in different ways in, in Denmark, which is a small country.
500 million people. So proportionally that’s a, that’s a big part of the population working with Lang Howard membranes.
Antoine Walter: So you mentioned Cembrane and that was joking that you met have a link with that Cembrane is somehow, historically was at least your family business. What’s the history of Cembrane.
Sebastian Andreassen: The history assembling. We were started in really, we were started very early in 2015, roughly seven years ago. And it was founded by me and my father and my brother. We all have a history working within with Silicon carbide. Uh, me personally, I’ve worked with, with Silicon carbide product and business development for almost 15 years.
We started, uh, with, with the aim of, uh, taking this fantastic marvelous material called Silicon coward and wants to turn it into a flat sheet membrane and the idea or the vision behind it was to. Make membrane treatment, simple and economical membranes. Uh, I have, uh, a bad rep in the market of being a pain in the behind to operate and very expensive and complicated.
Antoine Walter: And, uh, you mean membrane in general or ceramic?
Sebastian Andreassen: No membranes in general, especially polymeric membranes, uh, which the market is dominated by it by polymeric membranes that are very sensitive and can Clarke up very easily and, and all these kinds of things. So, but we were, uh, we had a vision to use Silicon carbide and, uh, Memory treatment, economical and simple.
The only problem was I used that Silicon carbide is very expensive. It’s very costly. And at that time that’s economical to use outside of very extreme, uh, applications. So, um, that’s how it started. That’s why we started the company and, uh, perhaps we’ll get into the rest of the history during our conversation.
Antoine Walter: So you see a material which is very expensive, hard to adapt to water, and you think, Hey, that’s the one I need to build a business around. Sounds weird. Yes.
Sebastian Andreassen: I dunno. Uh, it was, it was very natural for us. We, um, for me it was all, I knew Silicon carbide and, uh, uh, I’m an engineer. My brother’s an engineer. My father’s an engineer.
So we were very, if not entirely focused on this. And maybe less so on the more commercial aspects, but somehow taking these amazing attributes inherent to Silicon carbide in water treatment, and then finding a way of industrializing the products and reaching economy of scale. So it’s, it becomes economical to use and adopt into the water treatment
Antoine Walter: sector.
So, let me give a spoil into what we will be discussing at some point in our discussion is that it used to be a family business. If I’m right now for a couple of months, it’s still the case, but with the new owner, because you’ve been acquired by a vivo. So by ski on water to please my, my partner in crime, not, or who keeps referring to ski on water and every second sentence he makes would come back to that.
I’d like to. And understand the path before that today. I think you’re, you’re still the chief commercial officer, right?
Sebastian Andreassen: Yes, I am. You’re right. We were, we were acquired in June of this year by Schiano vivo. And, um, we have continued the same management as we were before that. So I, I’m still chief commercial officer in charge of commercial sales and business development.
Antoine Walter: That I know for a second on the market. So you’re the chief commercial, the Fisher, which means if you want to sell something and if you want to promote your solution, I guess when you started seminary and it must have started with identifying a problem, you cannot just come and say, I have a solution.
If there is no problem. So what was this water challenge or what are industry challenge that you wanted to take on? And how did you do that?
Sebastian Andreassen: You’re right. The, the, the problem was the fact that the water treatment market. For the use of, of membranes was completely dominated by polymeric membranes. And I’ve seen a number of these plants.
I’ve seen all the complications associated with the use of polymeric membranes and also the sustainability aspect of making a lot of plastic and throwing it away after. And so that was the, that was the problem. And we were convinced that Silicon carbide was a big part of the solution of making it more simple, to use a membrane, making it more economical.
Kind of a paradox, right? Taking a very, very costly material and believing that, that you can make membrane treatment less expensive.
Antoine Walter: Let’s discuss this simplicity just to understand what’s so complex about a polymeric.
Sebastian Andreassen: You need to take a lot of precautions in the pre-treatments. Uh, you need to be very careful the way you operate the membrane.
There are a long list of restrictions that they cannot endure certain. Elements coming into the membrane that will deplete it or destroy it. And when you inevitably will have falling a scaling, a dirt, sticking to a preliminary membrane, you’re also, there are limited in your ways of cleaning it. You can only use a certain amount of chemicals, a certain number of times, and often to some degree you destroy the membrane whenever you clean it.
This adds a lot of complexity, nuisance around the use of preliminary.
Antoine Walter: To understand this pre-treatment you mentioned so a polymeric membrane would need a pre-treatment before it, do you totally eliminate that need with Silicon carbon?
Sebastian Andreassen: No, uh, we don’t, um, you, you, it depends. It’s very dependent on what application we’re talking about, right?
Is it a wastewater application? You can have biological treatment upfront, uh, acquire relation or other types of pre-treatment methods, but, um, you need to have extensive screening, uh, more extensive screening. Which adds a level of complexity to a plant. You need to limit oils or solids coming in to your plant, and you have a difficulty managing upsets in the water that’s coming into the membrane.
Whereas Silicon carbide is, is much more resilient and able to absorb. Well it’s ability in the water quality coming in. So that means that for preliminary permit to operate, sometimes you need a staff unit upfront to make sure you have a steady flow of, of solid concentration or a clarifier, um, which in, in many are some cases can be limited by a Silicon county.
Antoine Walter: You mentioned the, the applications and you said it depends on the application. If we go back to the beginning of Cembrane, so you have this belief that your Silicon carbide material is going to be the game changer, but still you have to deal with the fact that at that point in time, it’s still pretty expensive.
What is the first application you.
Sebastian Andreassen: It was drinking water. It was born out of the waste to provide clean water for drinking water purposes, maybe from a more romantic motive, uh, seeing water it’s extremely satisfying, uh, treating water for drinking water purposes. Uh, I feel personally, but, uh, we have also done a lot of waste water treatment.
I think a little bit more than half of our installed base today is wastewater treatment, both municipal and. Wastewater treatment and the rest is drinking water treatment.
Antoine Walter: So the bees application was this drinking water. Then you diversified a bit, what am interesting to understand you started? And maybe the change over the time, but right now what you do is that you have this material, you have the module and your, your, uh, marketing, both of them.
Is that the shape you always had or the beginning did you have to do more or less, or what decided you to say the sweet spots in this full vertical is to say we do the material and the most.
Sebastian Andreassen: When we started, we were very, um, we wanted to focus as much as possible on, on what we are good at. The production of Silicon carbide.
So ideally we only wants to do the Silicon coward membrane and nothing else. Uh, but we quickly realized that a lot of our customers were saying, okay, this is your Silicon collar membrane. What are we going to do about it? Oh yeah. You need to figure that out. And in most cases that didn’t turn out very well, some turned away and some that did say, okay, I’ll, I’ll, I’ll try to do something and they, they didn’t succeed.
And with the membrane. So that’s why we decided, okay, we need to control that and adapt, develop our own module and offer that as well. So, so that is our key product to offer a complete module to the market.
Antoine Walter: Have you ever tried to go the next step up on the ladder and to say I could become an integral.
Sebastian Andreassen: not that will not happen I’m of the firm belief that, that you should focus on what you’re good at. And, um, I mentioned earlier that, uh, our vision was to make it the preferred technology for membrane treatment. That means a lot of scaling of the technology has to happen. I believe this happens in layers, so we focused on our.
On making the Silicon carbide better and better and less expensive to manufacture and then work with a long range of OEM company. That take this product and innovate around it and make it perform to its fullest. And if we started doing that, it would be equivalent to having one OEM customer and it would be very difficult.
It would put, um, a hindrance to our, to scaling our company and, and, uh, expanding the use of the products. A lot of the maturity happens around the Silicon carbide membrane and bringing down the cost. But. Most of the potential moving forward is around the use of the product, making it more productive, finding new ways, uh, hybrid methods of removing, um, micro pollutants or other substances.
So there’s a, there’s a new worlds that needs to be explored by others that are much better at that than we are. We’re not experts in, in building plants and a lot of companies that are.
Antoine Walter: Okay. There’s a lot to unpack in what you just said. So I’m going to put two questions in different. So I’m coming back in a second on what you just said about this hybrid and the process element of removing use substances.
And I’ll come back to the OEM point, but you also said at the very beginning, there’s this element of the curve of the costs of the Silicon carbide and you working on trying to improve that. I was just looking at some studies, preparing our interview, and I found the interview from you where you say that between the moment you started Sam rain, and now you divided the cost by 10.
And, uh, the study I phones was showing that between 2000 and the moment you started SEM rain, the cost was already divided by 10. So that means that since the 2000, the cost of Silicon carbide was divided by 100. So is it like, you know, there’s this kind of, of Moore’s law or hide slow, and it’s going to keep on that way and that pace, or is there just a physical limit at some point who says it’s not possible to divide the cost by 10 every decade?
Sebastian Andreassen: Uh, unfortunately, but I don’t believe there’s limits. There’s no limit to human ingenuity and, and to innovation, there will always be ways of improving the product and the performance and the cost. Of course, on our current setting, we have now there are some limitations, but there will be new ways of doing it in different ways that are smarter and more effective.
I cannot point to single elements that was. You know, the, this thing came down, uh, tremendously in cost. And that is why we are at the cost we are today. It is a sum of hundreds of things that has brought the cost down over time. So every aspect of the production has improved incrementally and brought us to the point where we are today.
To be fair in, in, you mentioned 2000, uh, that was, I would say lap scale at best. There was no industry at all around the use of, of Silicon carbide filters or membranes. So, uh, uh, there’s one aspect of your own production where. Can do a lot of improvements, but you also need your suppliers to wake up and say, okay, I don’t need 10 grams of Silicon carbide powder.
Now, now I need a hundred tons. And then you get a better price. Obviously it’s an aspect of, of building up an industry and you see that in, I would say in, in most, all industrial products that they become better and better and okay.
Antoine Walter: Somehow that’s also the, the story of polymeric membranes. I had Graeme Pearce on that microphone explaining how, when he was visiting customers in the UK, in the beginning of the nineties, people were just laughing at him and saying, you know, that thing is just too expensive.
It’s never going to be used. And then there was cryptosporidium. And then all of a sudden it got used. And the fact that it got used means that more people were using it. So the price went down. So it sounds like. Somehow polymeric in terms of this cost curve as a decades of advents somehow, but now today, if you would have, I know it’s stupid and I know that membrane manufacturer hates that question, but still I have to ask it if you were to compare it one to one and let’s forget about all the Wellcome side effects that forget about how you’re bettering OPEX.
Are we better in everything just when you buy it in pure CapEx? What is the ratio today? At the same magnitude of size between an equivalent in polymeric membranes and an equivalent in, in ceremony or Silicon carbon membranes.
Sebastian Andreassen: Again, it depends on, on the application. So if you, you could say. To put it in simple terms when we can deploy our membrane in groundwater treatment, where you have very little organic slime that blocks the membrane, you cannot operate at flux rates that are very, very high approaching 1000 LMH.
Whereas the equivalent, uh, fluctuate for polymeric membrane would be less than 100.
Antoine Walter: You need 10 times more polymeric membranes to have the same flux.
Sebastian Andreassen: Exactly. I’m all. Yeah. And in that case, the SSE becomes the lower costs choice. If you look at it, isolated membrane to membrane, but the more slime and organic matter that comes into the water, the lower, the difference influx rate becomes between put American Silicon carbide, because imagine you have more and more slime on the membrane surface the advantages.
And the properties of Silicon carbide becomes less pronounced and it’s more the resistance Keighley on the membrane that determines the rate. But then you have to look at other things, as I mentioned before, uh, the surrounding equipment, uh, okay. Maybe you can save a Def and then it becomes the cheaper option, but in some cases it is.
And in many cases it is still the. Expensive choice CapEx wise, but then hopefully, and, and, and lovely. There are customers that also look at total cost of ownership over a longer period of time
Antoine Walter: on your website. There was a figure which just surprised me under the biggest expert. There is a membrane, so I can be surprised by a lot of things, but I was surprised by this figure, which was saying that if.
Operating costs and energy costs between your solution and the typical polymeric solution you have for time less energy needs. How can you be four time, better on energy? What, what is the driver? There is again, this fluctuate. Yes,
Sebastian Andreassen: that is the key aspect to it. And that that figure there is, is from drinking water, water type applications or tertiary treatment.
The energy is in a membrane is determined by the. Yeah, by the resistance that the water meter. When it encounters the surface of the membrane, the resistance is determined by three things. Primarily if you imagine the membrane as a surface with a lot of holes, you can imagine if you have a lot of holes, as opposed to.
There is less resistance. This is the porosity. Uh, that’s one aspect that, that provides a high fluctuate. The other one is the, um, how hydrophilic the material is. So if the material is very water loving, as opposed to, uh, less water. Being hydrophobic. There’s also difference in resistance there. And finally, the, a membrane holes.
How much do they bend? How much do they twist? What’s the curvature. This is called . And on all these three aspects, Silicon carbide is. It is, um, a more hydrophilic material. It has a tenacity or less twisting in the memory and holes and then polemics and even other ceramics and the porosity and the number of holes is a three to four times higher.
So the resistance of the water is much less. And therefore the energy consumption is also much lower, which is one of the key benefits to the OPEX side of things.
Antoine Walter: What is your oldest plant in operation?
Sebastian Andreassen: The oldest planet operation? Um, it is from 2015. So that would be six years.
Antoine Walter: The reason I’m asking is that, you know, a big part of that game is to estimate the Totex.
So the total cost of ownership over the lifetime of the system. So if you were older system is six years old. What is the lifetime expectancy of your typical.
Sebastian Andreassen: Yeah, that’s a, that’s always an uncomfortable question, sorry. But then it’s always, um, complicated to, to justify a 20 year life when you only have six years of running plants, but we have put a lot of effort into doing, uh, extensive autopsies of the plants that we have in operation to determine what is the.
The grade a degradation of, of the membrane after a certain period of time, besides all of our internal aging tests that we have done, uh, with chemicals and temperatures and mechanical strain internally to see if we can predict the lifetime of, of the membrane. So that is what we have to go by and, and, and, uh, there’s a lot of literature and data.
On polymeric membranes, the true life of polymeric membranes and the degradation, which is quite well known. And so we have that to lean on when evaluating our total estimated.
Antoine Walter: I didn’t want it to be a tricky question. You know, I’m working for a company which has the best ball valve there is. There was, and there will ever be.
So it’s interesting for approximately nobody when I say all that, but the characteristic of that ball apps that it can open and close 100,000 times. And usually the first question you get. It did someone ever open intelligence 100,000 times? And in all honesty beyond the robots that tested it, I’m pretty sure that’s the answer is no.
So I’m not saying that it is so straightforward that if you have just a six years of history, you can only claim six years. I mean, you can simulate an aging and you can have some calculations, but I was curious to understand how you do that. I had Wim Audenaert on that microphone from AM Team and he was explaining how.
Fully assimilate the operation of a plant. You could have a plant which behaves like a blend, but wasn’t ever built is it’s this kind of solution which you’re looking at and saying, I could be fully having my digital twin SEM brain system and just check if it lasts 20, 4100. So
Sebastian Andreassen: we, we have, we have used different methods and, uh, we have looked at at a long range of chemicals that we know it will be exposed to.
And we have done it at a long range of different templates. And then we monitor continuously the, all the characteristics of the membrane, the poor sized hardness, the, um, energy. And how does it look in the microscope? We follow those over a long period of time and see what, what is happening to the membrane and in these different conditions.
At the same time we have done miniature. Plants lab scale plants, where we are flowing water through and putting this chemical through it, then that chemical through it a number of times. And while at the same time, exerting mechanical stress on the membrane, seeing what is, what is happening that because you can focus on one thing a once let’s say chemical and see, okay, what happened.
But in real life, you’re exposed to that chemical, but you’re also exposed to a backwash and high pressure. You also exposed to the sun. You also exposed to this acid and the other asset, and there’s no limit to what an operator can, um, expose your product to right?
Antoine Walter: Talking about operator. Actually you explain how you expect your plants or the plants operating with your modules to be easier to operate.
But still, let me take a polymeric example. If you take the polymeric example and you’re just running too many chemical cleanings, and you’re very aggressive with the chemical cleanings while you’re going to just drastically reduce the lifetime of your membranes. Is there anything with ceramic membranes, which I can do really wrong and hence kill the expected lifetime of myself.
Sebastian Andreassen: Yes, obviously you can break it. It’s a good analogy is to, if you go to your kitchen and you look at your ceramic plates and maybe you have some from your grandparents still around, they last a long time. But when you drop them on the floor, they get destroyed. And the same goes for Silicon carbide, ceramic membrane.
It is very brittle material. So if, if an operator, which is something we’ve seen on a number of occasions, if an operator. Drops a hammer or a screwdriver or something on top of the membrane, that can be a active damage that you would probably not see to the same extent that a softer polymeric membrane.
So that is definitely one thing that, that you need to look out for. So we always try to be, be very careful and very diligent when we. And I tell them to cover the surface during installation and when the electricians are, who else it is, who is standing on top of it, make sure that they don’t drop heavy optics on.
Antoine Walter: Actually with the design of your module, I guess your, your membranes are well-protected because you have these boxes. So I could imagine that you really have to, wants to break it to come with a screwdriver and open the module and then try play with the membranes. But still, if you need some commercial advice on how to create some demands, uh,
Sebastian Andreassen: that’s true.
No, I, I think it it’s the most important thing is to give the customer a good experience when he installs and operates the membranes, it can be a challenge sometimes when, when, when things are dropped on top of them, or people are walking on them or jumping on them and doing crazy things that happens once in a while.
Antoine Walter: CapEx, OPEX Totex question, depending on the market. It’s going to be more or less challenging. I would say by experience, if you’re in the municipal market, usually they have a budget to buy something and a bit less of a budget to operate something. And the industry word might be the opposite where they never have any money to buy something.
But then operating is just a matter of bottom line. So, so then you can really leverage this advanced OPEX that you have. Do you still have to educate the market? That’s telling them, you know, look at the total costs or is it something which is really no entrenched in everyone’s mind? I
Sebastian Andreassen: will say it it’s much easier.
Now. Maybe you even convinced now Antoine of ceramic membranes and the Totex. I think it’s, it’s easier, um, to, to convince. The engineers when it’s penalties of, um, the total cost of ownership. But I would say the greatest challenge with respects to introducing a new technology is the risk associated with trying something new.
The easiest thing for them is to do what they’ve always done and to copy things. Uh, that they know there’s an expression that’s that goes, uh, you prefer the, the devil, you know, over the devil that you don’t know, taking risks is not a virtue that is very pronounced in the water treatment industry. It takes time and you need to be patient, but I think the, the data is there.
And when you are presenting the data and the experiences and the references to the engineers or whomever it is, they tend to be convinced. Half the arguments of ceramic membranes, but why take the risk of trying something new? Right? Put your job on the line or deciding on, on a drinking water treatment plant is a big decision.
Also wastewater treatment plan is very big decision. That’s why in the very early stages, we, we, we succeeded on the jobs where everything else failed. We went to all corners of the world and oh, you fail. Okay. Let’s. Let’s help you out. You have no other options now it’s, there’s a little bit more options
Antoine Walter: out there.
That’s not surprising because you see that at the beginning, it was hard to convince people. Now you start to have a bit more facility because it’s no longer this thing, which is fully exotic. It starts to exist in the market. And still, if I take with my question from the fridge, you know, working on hybrid solutions and looking at new processes and new things to treat this, like you want yourself to go back to the position where it’s really hard to sell.
What exactly are you looking at in this area of emerging contaminants or new ways of treating is process wise that you’re doing something with your, around your modules or.
Sebastian Andreassen: We don’t get involved in process. I was referring to what’s what some of our OEM customers are doing. And so we leave the, the process innovation to our OEM customers to develop hybrid solutions for removing, uh, micro pollutants are all the things, but you’re right.
You’re taking a new product. Adding a new element to it, which makes it even more exciting and even a bigger risk to use. And for that reason, they will take even longer time to, to introduce into the market. That’s why it’s important to diversify and have a lot of different OEM customers that have different time horizons.
Antoine Walter: my other question to the fridge. I’m coming back to that one, but just to understand here on the product side, you could be also looking at new alternatives, like coating or membranes or combining them. So it’s still a product, but it has a new enhancement. Is that a direction which you’re looking into or did you say no, that’s not for us.
We are the specialist of Silicon carbide and the.
Sebastian Andreassen: We are not looking into that. We see still a lot of work to be done in, uh, expanding our capacity, uh, continuously improve the product. And the technology we have is well-proven, which will, and we are finally at a stage where we, uh, we have a long list of references that are working well and, and we can build a grow on that.
So we are less prone to making changes. Uh, even though we are quite inclined to do it, uh, it’s in our nature to jumbo new things, but, uh, we have to restrain ourselves and focus on what we have now and make this better and keep the industrialization process that we are in with our current Silicon collar product.
But there’s no doubt. There’s a lot of innovation potential around that aspect as well. And I keep track of all the scientific literature. Being published. And the number is increasing day by day, which is quite exciting. But, uh, we, uh, not jumping over that just yet.
Antoine Walter: So what does it change for your business model business strategy and company future to not be part of a vivo
Sebastian Andreassen: overall?
It changes it for the better we were, I would say. As a small company alone. And now we are part of a bigger group,
Antoine Walter: a small company, which were present in 65 countries, right?
Sebastian Andreassen: Yes. True. Relatively speaking. So, so, um, um, we were, we were not publicly listed. We were privately owned and family owned, but now being part of.
Bigger entity that, uh, okay. It’s an OEM, but based in north America, it, it means that we have more resources at our disposal. It means we can continue what we’re doing, but at a faster pace. So the motivation for us to decide on, on the acquisition was based on our need for capital, for expanding the capacity.
It’s quite capital intensive to build a Silicon carbide factory. So even though we were profitable, we needed some external funding and we believed we were skiing. Family was, uh, was a good place for, for some brain tumors.
Antoine Walter: Does it mean you’re, you’re switching gears now in your approach, because if I get it right so far, you were growing on the bootstrap approach, you were profitable and you were growing like organically.
Now you could have the opportunity to take the market by storm and to simply go to the next scale, is that your ambition or do you want to push this bootstrap?
Sebastian Andreassen: We are growing quite aggressively now. So, um, you might’ve heard that we are with the VBA building, a big manufacturing facility in Austin, Texas.
So we now have a, a twin of our Denmark facility in Texas that would service the American market.
Antoine Walter: Is it a direct twin? Meaning you’re doubling your. Uh,
Sebastian Andreassen: yes. Yes. Obviously it’s, it’s not a hundred percent twin. There are some new upgrades and new equipment that we are implementing over there that we still have some furnaces from our beginning that they don’t have to start out with, but they can deploy the newest equipment over there to begin with.
Antoine Walter: So you will aggressively go on the north American market where you already present there. I guess it must be one of your 6,500.
Sebastian Andreassen: Yes, obviously. So we are aggressively expanding our capacity. You can see, even though, uh, I say it’s, it’s driven by, by demand and by our pipeline. Uh, we, um, I would say taking a more aggressive approach.
There’s also a lot of, um, new things happening on the marketing side, where we want to take the market by storm. Something that, uh, will, will happen more and more. You will see in the coming year, a lot of exciting stuff happening on that front as well that we was helping with. So, uh, we will, uh, uh, make a big dent and a lot of noise in the markets or the coming years that we’ll hopefully have a very positive impact on, on our growth to.
Antoine Walter: How did the deal with vivo arrive? Is it one day, Mr. Avivo is just knocking at your door and say, Hey, are you 4 cents? Or did you proactively go to them and say, Hey, or is it a partnership or something which developed with.
Sebastian Andreassen: We had a, um, a partnership with them and they were a customer of us almost since the beginning.
And they became minority shareholder in 2018. So we were already kind of in bed together and, uh, around 2019, um, we saw, okay, we need to gather some capital to, to grow the company in order to meet the demand for the technology. They were. Around the corner. And we had, we were looking at different options, but we finally decided that Viva was, was the right place for to continue what we’re doing and to succeed with, uh, the, the vision that we want.
So, no, it was, um, it was, I would say something that happened organically, but, uh, we still had a partnership going on.
Antoine Walter: Can you remember the amounts of the operation? How big.
Sebastian Andreassen: Um, I can’t reveal that amount.
Antoine Walter: You see how I tried to trick you? I knew it wasn’t disclosed, but
Sebastian Andreassen: I could see it on your smile that you will try to know, but it was, um, it was the right amount.
That’s all I can say.
Antoine Walter: Well, people is an OEM, right? So that means you now belong to an OEM. Even if I get you, you, you will still have your level of independence, but still. You will have no that’s vertical link. Did you get some backfire from your existing OEM customers? Which said, okay, now you’re my competitor.
Sebastian Andreassen: Not really. Yes, we are, we are owned by, we will, but Cembrane is still, um, you can say a company with the tones management, its own board and, and, uh, continuing with the same name and with the same strategy. Vivo is vivo has been our customer for the north American market for a long time. And they, the plan is to, they’re going to focus on that market alone with our products and we can continue what we’re doing outside of.
Uh, so we weren’t doing much anyway, uh, into north America, outside of OBU. So with our existing OEM customers in Europe, Asia, middle east, cause we had two, uh, Make sure that the message was delivered in the right way. And until then that we continue doing what we’re doing. This is a pasta thing. We are going to expand our facilities.
We have more capacity and our disposal going forward and more resources, but there will not be someone competing with you from within the weevil family. Yes. Specific market. So it has been a, it has been a plus, and it was a very important aspect to the acquisition that we could continue doing what we are doing.
And that’s also why that we were attracted to working with because they understand that they understand the importance of focusing on working with your EMR.
Antoine Walter: I was discussing with Wayne Byrne on that microphone. He is the founder of Oxymem and he exited from Oxymem after selling it to DuPont. And what he was sharing on that microphone is that he started with the end in mind.
So he knew why he was building Oxy mem. And the reason why he was building it is that she saw a market opportunity and he believed that he would be on the long run, exiting to a major, which happened to be DuPont. Was that your case as well. If I go back to, I guess, your kitchen meeting with your father and your brother, when you say, Hey, what if we start SEM rain?
Was that the end goal or did it just have.
Sebastian Andreassen: It was not the end goal to do that. Uh, our end game was our vision of building this product and, and industrializing Silicon carbide membranes. It wasn’t to go public. It wasn’t to exit and, and, uh, it was more products and company focused in terms of growing it.
We had a dream or a thought of building a company that could last for hundreds of years, similar to. Uh, you might know also a Danish company, a family owned company, but, um, that’s probably one thing that has, that has changed and that’s been a straight line for us that, uh, okay. Things have changed and we want a situation where we needed capital to grow and, and, uh, to take a bigger leap than what we were able to do.
And we saw this opportunity with the vivo and resisted, but still with our end game in mind and, and respecting our.
Antoine Walter: I guess you see me coming, but what Wayne shared on the microphone, as well as that, that was his fourth exit successful exit. So it was like a repeat entrepreneur. And right now he’s the CEO of a UV led company, which means he stayed a bit with DuPont and then he wants to his next venture.
Can I draw any kind of similarity with your expected future?
Sebastian Andreassen: I would say I’m quite attracted to starting up new things, but at the same time, I’m also very attracted to building, being a part of, of Cembrane. We weren’t building the company and making it the preferred. Technology for membrane treatment.
We are still there very early. And if we are, let’s say 1% of the market, that’s a long way to go before. I can say that we have succeeded with our, with our goals, but, uh, so I don’t have any plans of, uh, starting something new in, in, uh, anytime soon. However, uh, maybe some, some ideas of dreams of, of doing something else when I get old, but there are many decades till that one.
Antoine Walter: Between the inception of SEM brain and the moments where it was a major enough to go to this next step and you needed to grow and hence the move towards a vivo there’s seven years. Roughly if I take polo Callahan’s teasers on the water technology adoption model, the prediction is dads. That growth takes 15 to 25 years.
Somehow you were three to five times faster than the average in the. What’s your trick to do so
Sebastian Andreassen: we took some risks in the beginning. Obviously we had a lot of experience working with this material. Can you give an example
Antoine Walter: of.
Sebastian Andreassen: I would say, I call it, we took an innovation through implementation approach.
So, uh, the, the companies that Paul probably referenced, they, they take an approach where they do a lot of lab testing and pilot testing. For a number of years before they start introducing it to the market. We, we worked with our OEMs and we took a calculated risk together with our customers and said, okay, this is the product.
We don’t really know what it can do. Uh, we don’t know much of what it can do, but, uh, let’s, uh, let’s try and bring it into the market and see what happens. And we were quite fortunate and lucky that we succeeded installing some successful references, very early. And you need to get references in order to grow your company.
If you don’t have references you, this is very important. Asset in the water treatment is industry. I remember we got quite a sizeable drinking water installation in Sweden. We had no references. Uh, we had no experience. We were less than a year old. But the engineer, he had no other option. He couldn’t use upon American.
He couldn’t use sand filters for various reasons. Uh, so there was only, um, a smaller startup company from, from San brand. So we did a quick piloting and for two weeks, everything looked good. And then we had to figure out how to. With the help of a consultant to help get the membranes installed and everything turned out well, it’s still operating and visit the plant recently and the customer’s happy and it’s all good.
So that could easily have turned out very wrong. If there was some more complications to the water or what have you. And, uh, we could have been in a different place, maybe.
Antoine Walter: So that makes two secret sources. The first was take risk. The second is builds. They’re nice references. So risk reference, you have to ours.
If you were to write a book, I think a good tattoo would be like something like three RS of success or something like that. So what would be your third?
Sebastian Andreassen: I would call it the innovation through implementation. So you innovate and develop your product and, and you, you implement it in real life as opposed to running it in a pilot, in a lab for ages.
Antoine Walter: But you are taking on the water industry, which is probably one of the, what you said to be one of the most conservative industries, because of that aspect of, if something goes wrong with water, it leads to complications. And what you’re saying is that you found this early movers, which were ready to take the risk together with you and to say, I trust you.
So I must say probably one of the special sources here is that conviction strength. Yes,
Sebastian Andreassen: yes, obviously, uh, that, that helps, but it also helps. Finding some that are sufficiently desperate and have no other options than to take this risk. But, uh, obviously they have to be convinced and, and have a level of trust in you before they, they send you money.
Antoine Walter: That’s the Google marketing saying it’s that you don’t need to have the best product or whatever. You need to have a starving crowd. And there need to be, I mean, desperate sounds weird, but at the end of the day, that’s what it is. People have problems. And if you’re the one to solve the problem, then.
Magical product market fit. And it doesn’t much of magic inside. It’s just understanding what is needed. So yeah,
Sebastian Andreassen: I used the word desperate. Maybe it’s a harsh word, but when we did have one, um, another case very early on in our, in our beginning, uh, in middle east where the, uh, there was a particular region that was lacking water and they tried both conventional technologies and nothing.
Succeeded for them. And, um, there are people that need the water. So they were desperate. They were, it was a very serious life threatening situation for a lot of people. We came in there and, and, uh, we provided the products and they took a risk with us and we succeeded. And one of the testaments to how desperate they were, they were.
Secret police they’re present during the commissioning phase, making sure everything was done as fast as possible and making sure if anybody needed any help, they would assist us if need be
Antoine Walter: secret police doing membrane treatment. Okay.
Sebastian Andreassen: Membrane commissioning supportive.
Antoine Walter: Well, that makes for an awesome deep dive.
So thanks a lot for the openness about it, and really appreciate that. And sorry for the weird question. I’d like to scratch beneath the surface and, and you didn’t stop me still. I could play that game with you. Uh, what propose you, if it’s fun with you is to switch to the rapid-fire questions.
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Rapid fire questions:
Antoine Walter:. So in that last section, I’ll be trying to keep the question short and you can keep the answers. And don’t worry. I’m always the wide, which is sidetracking. So my first question is what is the most exciting project you’ve been working on and why
Sebastian Andreassen: recently working on developing of our newest version of, uh, of our motto, this, uh, SSC blocks FX series, uh, it was very exciting and, and seeing it, uh, Not the only being part of the development, but also seeing it being introduced to the market, being used and, and solving real life problems is very exciting and very satisfying.
Antoine Walter: My next question is, can you name one thing that you’ve learned.
Sebastian Andreassen: Building a membrane company or starting a membrane company, I would say it has been positive, but also hard lesson, hard work. And when I started, I had a full set of hair, very, I was often complimented for that, and now it’s gone from all the stress that I have had to endure, but, um, at least I have a good face for radio.
Antoine Walter: that the worst moment you mentioned. Stress. What’s your worst experience?
Sebastian Andreassen: Um, I would say we at least, uh, we have steps over the edge down the cliff, many times you all the time have to look out. Okay. Do we have money enough to. Uh, survive and invest in and what level of risk you can take and can we pay the employees and, uh, you always have to, to deal with these kinds of things.
Okay. Now we have an order and we can survive for this amount of time and that’s, that’s stressful. But at one point, uh, when you look over the edge, you start enjoying the view.
Antoine Walter: Well, that’s probably a hole. You grow three times faster than the market. So it makes about sense. What is the trend to watch out for in the water sector?
And you’re not allowed to tell me, sir.
Um, well, if you firmly believe that the only trend is summary membrane, you’re still allowed to say.
Sebastian Andreassen: No, obviously not. Uh, there are so many things happening in different aspects of the, uh, the treatment side of things. I think for me personally, one thing that it’s worth looking out for is, um, artificial intelligence or machine learning, or what’s the public term when the software that, uh, optimizes on the treatment.
Based on, on prior data. I think this is quite interesting and, and, uh, it has already proven that it can do magic’s magic in terms of reducing the operational expenses on wastewater treatment plants and even on membranes. So I think there are some things to watch for there, uh, in the future that is, uh, quality.
That’s a number of other things.
Antoine Walter: I’m not sure how much of a good you’re religious that I am probably not a good one, but that is exactly one of my predictions for next year. I was saying that I expect to have a fully AA run plans operating somewhere, and I’m pretty sure this is going to happen. So I’m glad you, you support my point.
If you were a word’s political leader, what would be your first action to influence the fate of the words? What a tentative.
Sebastian Andreassen: Um, I would, I would make myself and my colleagues as redundant as possible as fast as possible. When we look at, uh, at, uh, the water treatment market, I think, um, we could see a lot more innovation and a lot more advanced and better and lower costs, uh, treatment of high quality.
If, uh, if there were more decentralized decision-making and, uh, I think having large municipalities deciding on what technologies to use and specifying that. And I don’t think that’s a very effective way of introducing new products into the market. So, uh, I would probably, um, uh, allow for more decentralization and decentralized decision-making when it comes to selecting technologies and methods on how to treat, uh, wastewater or water.
So it would be that the boring or the lazy approach, right?
Antoine Walter: The decision making. What about the treatments? What do you see in the future? Is it like central treatments, decentralized treatment, distributed a mix of both.
Sebastian Andreassen: It’s always difficult to answer these generic questions because there’s such a difference in the market.
Right? In, in, in Europe, Northwestern, Europe, you have treatment plans. Quite well, managed and maintained through hundreds of years and they will probably continue to be maintained very well. Whereas in other parts of the world, you have no infrastructure and infrastructure being built and here newer technologies to centralized technologies, uh, are being deployed.
I would say in more and more. I think it’s like when you introduced the internet, the more developing nations could, could go directly from nothing to fiber optics. We had to put in copper and then remove that. And then fiber optics
Antoine Walter: independent for legacy and. Exactly. That makes a lot of sense. I’m not reopening the debate right now because I don’t want you to steal one hour.
But, uh, yeah, when you’re looking at the history of the water sector, you look at this, um, I think it’s the Morgan chase bank in the U S which was decentralized water treatment that the very beginning, and then they had too much money, so they became a bank. And, um, yeah, so that’s how we, we started this infrastructure.
So somehow it’s a return to the roots. So
Sebastian Andreassen: I didn’t know that that’s interesting.
Antoine Walter: I have to verify if it was Morgan chase, but he’s our number, the one who did all of that. Um, but I’m pretty sure it’s Morgan chase. Last question. We have someone to recommend me to come on that very microphone to come up to you.
Sebastian Andreassen: A good choice would be, um, Dr. Huynh Hartford, the CEO of scalable. He’s a very knowledgeable guy is quick on his feet. Then he has a lot of insights to a lot of different technologies and, and, and, uh, and industries within the water sector. So he’s a, he’s a wealth of knowledge. There’s also my old friend.
Gabrielle from FinTech. Uh, he’s also, it’s more on the ceramic side, but he’s very passionate and, and,
Antoine Walter: uh, To spoil, but that’s might happen in January.
I’ve listened to him. I was name dropping Paul Callahan earlier, and it was listening to polo Cullen’s podcast, where it was inviting Hannah to him not to discuss his, his thesis. And they had S uh, diverging opinions. So that’s probably a very good opportunity to get to. His side of the story, what’s the best.
It’s been a pleasure, such a pleasure that took more time than unexpected. You mentioned that you might have ideas that day. One of these ideas becomes true or not true, or you’re very thriving, et cetera, building a monster with SEM brain as a part of, of a vivo and scan that microphone is open to you whenever you want.
So. Thank you!
Sebastian Andreassen: I appreciate it. It was a, it was good talking to you and you’ve obviously tried this before. So, uh, it was my pleasure having this conversation with you. I hope to meet you again.