The Best Industrial Wastewater Treatment System Is The One You Forget

with 🎙️ Jonathan Rhone, President, and CEO of Axine Water Technologies 

💧 Axine Water Technologies specializes in the on-site treatment of the toughest organics in industrial wastewater.

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This episode is part of my series on Industrial Water. Go check it out! 😀

What we covered:

💸 How Wastewater treatment has often been a tax to be in business for Industrial Players

⚗️ How chemicals we introduce in water are always more complex and how that commands advanced wastewater treatments

⚖️ How the two typical solutions (on-site treatment and trucking it away) compare

🍎 How wastewater treatment is not core to industrial operator’s duties

🍏 How Axine Water Technologies developed innovative electrochemical oxidation solutions… out of a garage

🧱 How the development process was a journey (and what it involved)

🍏 How the decisive step was to rethink the industry standard and shake business models up

🍏 How Axine’s value proposition builds on a treatment performance guarantee

💪 How cleantech innovations can fundamentally transform our world for the better

📈 How Axine’s business model works and what’s in it for their customers and investors.

🧑‍🔬 How Axine’s technology actually works, and where the inspiration came from.

🍏 How the wastewater industry ticks at a particular pace and why it’s fragmented and risk-averse.

🔟 How you need your technology to be ten times better than what you intend to replace, and how to win your own confidence in it

🍏 How Axine builds tailored solutions from beginning to end through all the important steps

💓 How a process’ heartbeat is the key to efficient remote operation and predictive maintenance

🚀 Machine learning, automation, taking risks, succeeding where others failed, finding a sweet spot, hypergrowth… and more!

🔥 … and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨 🔥 

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Teaser: Industrial Wastewater Treatment System

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Resources:

🔗 Have a look at Axine Water Technologie’s website

🔗 Come say hi to Jonathan on Linkedin

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Infographic: Industrial Wastewater Treatment System

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Quotes: Industrial Wastewater Treatment System

Quotes-Jonathan-Rhone-Axine-Water-Technologies-Industrial-Wastewater-Treatment

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Full Transcript:

These are computer-generated, so expect some typos 🙂

Antoine Walter: Hi, Jonathan, welcome to the show.

Jonathan Rhone: Thank you. A pleasure to be here.

Axine Water Technologies: A Postcard from Vancouver

Antoine Walter: Well, the pleasure is all mine because we have a full plate of topics for today, which I’d like to dive in with you today, but I have to additions and that involves starting with the postcard. And you’re sending today a postcard from Vancouver.

So what can you tell me about Vancouver, which I would ignore by now?

Jonathan Rhone: We’re very lucky to live in a forest. Vancouver’s a rainforest. We live in a rainforest. It’s a very beautiful part of the world. And you know, it’s interesting on the topic of environment that we’re going to talk about today. It’s been a little bit of an unusual year for us.

We’ve had a pretty significant impact of climate change. We’ve had some of these things called atmospheric rivers that have given us record rainfalls. And in the summers, we have a huge forest here in British Columbia. So we seem to be alternating between wildfires in the summers and atmospheric rivers.

So extreme swings in, in what we’re dealing with, but we live on the ocean. It’s a rainforest and it’s very beautiful here. And the people are lovely. So

Antoine Walter: the atmospheric river is, is really a topic which is coming back and back now because with this extreme events, more and more technologies and technology company, try to catch a bit of that, that water.

But despite the hints, that’s not what we will be discussing today, but more to that in a second before I like to better know you and one of us preparing for our discussion, I’ve seen different ways to introduce you. Introduce you as an award winning serial Cleantech entrepreneur, that’s an option or a venture capital fund founder, which is also an option aiming to transform the energy value chain.

What is the best way to present you?

Introducing: Jonathan Rhone

Jonathan Rhone: Well, thank you for that. I think of myself as somebody who is a serial entrepreneur in the clean tech area, but I think also I am somebody who is. Passionate about the idea that Cleantech innovations can fundamentally transform our world for the good

Antoine Walter: what’s your definition of clean tech?

Just that we have a common understanding,

Jonathan Rhone: clean tech are technology driven businesses that in general have an impact on improving the environment, energy technologies, water technologies. Energy efficiency, uh, everything from carbon capture and storage to water technologies. So transportation technologies is a pretty broad definition.

You asked about Vancouver and I’m very fortunate to live in a community where the clean tech sector is one of the fastest growing parts of our economy. And there are thousands and thousands of people who live here working every day to, uh, passionately improve the environment with new innovations in all aspects of our economy.

So I’m, I would describe myself as being part of that community as somebody who’s passionate about, about, about entrepreneurship in that area.

Antoine Walter: That goes also to one more level, because I’ve seen that you’ve been recognized as an industry icon. What’s the story.

Jonathan Rhone: Well, I think you’d have to ask the people who give the award.

Uh, but as I said, we’ve got a very, uh, cohesive, clean tech ecosystem. There’s an organization here that recognizes a leadership in the industry. And I guess I’ve been at it for awhile icon, I guess is a very humbling sort of term. But, uh, you know, I’ve tried to help other companies in our ecosystem. I’ve tried to set an example of leadership.

And I’ve been involved in a number of ventures. So I guess it’s some way of recognizing, uh, the impact I’ve had in our community.

What does Axine Water Technologies do?

Antoine Walter: So talking of this ventures, the latest you’re in is Axine water technologies. What would be your elevator pitch to Axine? And am I saying it right with Axine or is it “Axyne”?

Jonathan Rhone: Axine is a very exciting project. The whole reason we started Axine was a recognition that we are increasingly creating a synthetic chemicals. When we manufacture virtually any product you can think of from pharmaceuticals to. Chemicals to automobiles, to semiconductors. And, um, the wastewater that’s generated by manufacturing plants is increasingly complicated.

It’s got a lot of these very difficult to treat synthetic chemicals that don’t easily break down and biodegrade in the environment. There is no obvious solution for how to treat those. And so therefore, uh, many manufacturing plants. Resigned to the fact of having to truck this water off site somewhere to be incinerated.

And we think that that’s a terrible idea. So we created a solution that we can treat that water onsite with a disruptive technology and do it as a service so that our customers can focus on what they do. And we can take care of these complicated wastewaters. So we, uh, we treat industrial wastewater with these complex organic chemicals.

As a service on their multiple years, service contracts generating recurring revenue in partnership with our customers and as a disruptive technology disruptive business model. And we’re making an impact in the markets. We’re in,

The origins of Axine Water Technologies

Antoine Walter: there’s a lot to unpack in what you just explained, but we’ll unpack it by, by sequence.

During the deep dive we will have together. I electric go back. The beginning of Axin you said we, were you involved in the creation of the.

Jonathan Rhone: I was, in fact, it’s an interesting story because, and it’s the story of how many of these companies start? I had finished working in my previous company and I was doing some work with a couple of Cleantech venture capitalists and looking at their deal flow.

Helping them curate some of the opportunities that they were seeing. And I was introduced to the technical founder of Axine and she was a PhD materials engineer. She had left a fuel cell company and she had a vision to take the idea of electric chemistry. Because fuel cells are all based on electric chemical processes and apply it to wastewater.

She had built some prototypes in her garage and she was working away, uh, with, uh, different types of wastewater to try to figure out how to use electric, chemical oxidation. To break down and destroy these chemicals in a new way to solve what she believed is a big problem. And I was immediately taken by her passion and her ideas.

I knew nothing about water or wastewater at the time. And, uh, you know, you might argue that I’m still learning a lot. It’s a complicated area. But, uh, we formed a relationship in, in, in to explore how we could commercialize our technology and take it to market. And so that venture capital firm ended up investing in the company we brought in new investors.

And so she and I partnered to take the company forward fast forward to today. I think we’re realizing her original vision of, uh, that she had for the company.

The first steps of an innovative Industrial Wastewater Treatment Company

Antoine Walter: I don’t want to fast forward. I want to understand that path. It’s something we’ve been discussing regularly on that microphone. How having a technology isn’t sufficient in the water industry, you have to make a dent and you have to battle, I think Kobe Nagar from 374water on that microphone said it very right when he said.

The full industry wants to be first to be second. So I like to understand how you go from that point where you’re meeting your technical co-founder, which has this awesome technology and you work together up to the point. You get your first reference. What’s the story of that first record.

Jonathan Rhone: It’s been a fascinating journey.

I have to tell you the way I would say it is that. Different than many other markets and I’m I’m from the energy industry. So I’m, I’m a relative newcomer to water. Water is an incredibly fragmented and challenging market, particularly wastewater. And the reason it is, is because every single application you look at has a completely different chemistry.

It has different flow rates. It has different chemistry, different chemistry of the problem you’re trying to treat. And then all the other background chemistry is different as well. So if you’re creating a solution for addressing a particular application, you have to be able to address all these. And related issues.

And the other thing is that customers in wastewater, they’re not interested in technology, so to speak, they want a solution. They want a complete solution that may incorporate your technology, but you have to be able to provide them with a complete solution. And the third thing that I’ve noticed is that.

Wastewaters is generally regulated. It’s not a core competency of the manufacturing industry, so to speak, although they do have very competent people that are very knowledgeable about wastewater, but it’s not the main reason why, you know, a pharmaceutical plant exists or a semiconductor plant exists.

And therefore customers tend to be very risk averse. So taking all these things together, our journey was challenging. It really was. First of all, we had to make the technology work and we really struggled. We struggled for several years, treating toxic complex organic molecules with electric chemical oxidation is a very difficult and challenging.

Technically a challenging activity. And our vision was that if we were going to get into the market and be successful, we had to have a technology that was 10 times better than anything out there in the market. So we’re competing against chemical oxidation, we’re competing against incineration, and we had to be able to develop a technology that could be flexible and versatile to treat thousands of different types of chemicals.

We had to be able to package it into a complete solution. And we had to be able to offer it to the industry in a format, in a business model that would minimize their adoption risk.

Customers want solutions, not technologies

Antoine Walter: But you mentioned that it had to be a solution and you had to have all these elements. Was it a given that you said I have to have all of that?

Or did you discover on the go that you needed to have all these bricks in order to be able to offer something which was compelling for those.

Jonathan Rhone: When we looked at the market, many technology companies will choose a pathway, uh, to the market where they set up distribution channels and they sell their technology to a larger company that might be able to integrate it within a larger solution.

We decided to take a different approach where we would actually put the entire package together. So that was a fundamental decision point for us. We package our electric chemical oxidation technology with conventional pre-treatment post-treatment we deliver a full turnkey solution. And then we decided that we weren’t going to sell the technology.

We were going to sell it as a service where you go to customers and say, we can treat your water. We’ll deliver a complete turnkey solution. We’ll finance the cost of construction. We’ll deliver it to your site and we’ll operate it and we’ll service it and we’ll monitor it remotely and we’ll do it under a multi-year service contract.

And here’s the key point we’ll guarantee treatment performance. The whole point of that Antoine is we’re trying to remove the technology risk and the friction of adoption. You know, in our case, that business model has been really well received by the markets that we’re currently in. And, uh, we’re very excited about it because, you know, there’s sort of two parts to it.

One is we’re trying to address a market problem and accelerate adoption. And we’re also trying to come up with a business model that works for investors, investors love recurring revenue, and this revenue is very sticky. Once we establish a partnership with a big company and we can prove ourselves, then we can start replicating across their manufacturing network, but we can also address the problem of adoption.

So those are some of the problems that we were trying to address.

Pleasing Industrials, Investors and… yourself!

Antoine Walter: I see why that is very appealing for the industrial player. I do see why when it’s successful, it is also appealing to investors, but there’s an element of risk, but you are a young company. By the time you have your first references, you have your technology, which is.

Hot some, let’s say childhood sicknesses to overcome, and you’re going directly all in to saying you’re, you’re, you’re offering everything as a solution. You finance it and you take a treatment warranty. How do you mitigate that risk?

Jonathan Rhone: It’s a fundamental question. Here’s how I come at that question. First of all, we had to have confidence in our core technology.

That was the first principles we had to develop. An electric, chemical oxidation technology and a, an electric chemical system that we had full confidence in. And that took several years to develop. And we had lots of failures, you know, I would say. The original concept of the technology. We weren’t able to make work.

We were able to make it work perfectly for 30 hours and then 300 hours. But we needed 60,000 hours. We had lots and lots of failures in the development of the technology to the point where it was robust enough that we had the confidence to back it with our own money, you know, and that’s ongoing. Today, we have a technology that’s sort of a generation three.

We’re working on generation four and five. We’re adding machine learning and automation and new types of materials. It’s working beautifully in the field, but we’re not stopping with innovation. So that’s, that’s the core of what we’re doing. Secondly, we had to have a sophisticated enough and experienced enough team to be able to own the entire value chain.

You think about it? We’re not only developing the technology and we’re continuing to innovate with the technology. We have to be able to take that technology and package it into complete turnkey systems. And then we have to be able to finance it and we have to be able to deliver it to the field and set up a service operations network worldwide with a small company.

So we have a whole value chain that we have to put together, and that requires a certain level of experience. And no knowledge, uh, technical and business acumen, to be able to do that. And it’s not easy, but I do think that it is introduced a new type of standard in the market that customers don’t need to understand how these very challenging wastewaters are treated with a high tech solution.

So if they’re buying the technology, they need to know everything about it. And in our case, It’s not just the hardware, the software that we use to acquire the data, which tells us how the system’s performing. The two pieces go hand in hand. So it’s very difficult to hand that off to a customer and let them take the risk.

We are actually in the best position to take the technology risks. So if we’re not comfortable doing it, why should the customer do it?

Axine’s Electro-Chenical Wastewater Treatment Technology

Antoine Walter: We’ve been teasing your technology now. The first minutes of this discussion, let’s go into it. What is this electro-chemical technology, which is at the core of your system?

Jonathan Rhone: Well, first of all, electro chemical treatment of wastewater has been around for a long time. And there’s an electric chemistry is used widely in a number of different applications. What we’re doing is electro chemical oxidation, and there have been a long history of development, work of electric, chemical oxidation of challenging, complex organics.

We are taking this to the next level. So what we do is we combine. Advanced materials in an anode cathode configuration, and we apply electricity to those advanced materials. And that allows us to generate what’s called a hydroxyl radical one oxygen, one hydrogen. And that you’ve heard of this before. One of the most reactive oxidants.

That can be produced. They’re very hard to, they’re hard to make. And then we put these catalyst coded electrodes into a reactor configuration. We turn on the electricity and we flow the water through the electrodes. The pollutants come in contact with these OH radicals and the OH radicals grab onto the molecules and they tear apart the molecules.

They break the bonds within the molecule and they progressively. Oxidized those molecules back to their basic building blocks, hydrogen oxygen, nitrogen, CO2, CO2. And so these are benign gases that are then just released to the atmosphere. And people have been trying to do this for a long time. We have commercialized it and now we’re perfecting it.

And now we’re, we’re making it cheaper and more efficient by improving the application and the use of data. And, um, then the operation to make it a more efficient and lower costs,

Being different in the Red Ocean of Advanced Oxidation Processes (AOPs)

Antoine Walter: we’ll go to the operation of the system. But on the technology itself, you mentioned how wastewater is a scattered fields with many companies, addressing many different types of water in many different environments.

You have an interesting and different way to produce this hydroxyl radical. Nevertheless, there are many companies which have many different approaches to generate the hydroxyl radicals. What makes you different in the middle of that? Almost red ocean of advanced oxidation.

Jonathan Rhone: Thanks for asking that question.

There are many ways to make O H radicals and many different processes. Advanced oxidation processes are. Probably the most well-known and there’s many different combinations and configurations. So we don’t use any oxidation chemicals in our process. What I would say is that in any application you have to get to the point of saying here’s the treatment cost per unit volume.

So cost per cubic meter cost per gallon. Our sweet spot is in the industrial wastewater that has a concentrations of organic. That are in the several thousands of milligrams per liter. And we’re able to take those down to sub parts per billion or in the case of PFAS parts per trillion. That’s where we’re hyper competitive.

And the other area we’re competitive is advanced oxidation. Can work extremely well with, um, uh, in some applications we have not seen a, a molecule that we have not been able to completely mineralize and destroy, and that is a unique, competitive advantage. And we can do it cheaper and more reliably with full performance guarantees that we provide over multiple years.

And so I think we’re bringing a very competitive. Solution to the market, both from a performance basis and from a cost basis and treating oxidation of industrial water is complicated. Uh, oftentimes, uh, the Oxidation process creates other mixed oxidants and byproducts and our solution completely destroys all of those.

So we have to be able to guarantee that without getting into the real nitty-gritty of it, those are a few, the, the areas where we see ourselves being very competitive.

Zero Liquid Discharge… and Zero Solid Discharge!

Antoine Walter: There is one thing which really intrigued me about your technology. And I’m not sure I have understood it in my preparations to be really transparent with you.

I’ve seen zero liquid discharge processes in the past. I’ve seen advanced oxidation processes in the past. I’m not sure I’ve ever met a zero solid discharge process. That means that when you’re going to this mineralization realization step, you’re also going to get certifications for everything you have as, as, as an output is gas.

Correct. Can you explain me that?

Jonathan Rhone: Yeah, there’s no solid or liquid waste produced from our system. So these are solid state electrodes. The water is flowing through the electrodes and the oxidation happens. I mean, we’ve talked about the primary oxidation mechanism being OH radicals, but we also produce secondary oxidants and we also transfer electrons directly.

From the surface of our electrodes to the chemistry of the pollutant. So there’s, there’s multiple oxidation steps, but we do not produce any solid or liquid waste. Everything. The treatment process produces trace byproduct gases. And when I say trace by-product gases, For any customer, we have to be able to quantify those and they are extremely low concentrations and they have to be of course, validated and tested and so on, but they are, they’re all released, uh, directly to atmosphere.

Axine targets several Industrial Wastewater Treatment Applications

Antoine Walter: I’ve seen two kinds of application in the references you had featured on your, on your website. They are going from my understanding in two different directions. So I’d like to understand that in some of your references, You have several pre-treatments to concentrate the evidence, and then it goes to your proprietary technology and you have this gasification, or is there a liquid and zero solid discharge.

And in some other applications, you are a pre-treatment step, which enables to have a more effective and more reliable water reuse systems. In that case, there is a liquid discharge, but an ultra pure or quite clean liquid discharge. How is it that you are in those two extremes of the scope?

Jonathan Rhone: You’ve done your homework.

Very good observation. Maybe it makes sense just to talk about the market application as well, because that’s relevant to the question you asked. The primary market we’re focused on initially has been the pharmaceutical market. What we become really good at an expert at is treating. Active pharmaceutical ingredients in pharmaceutical wastewater.

And so when I say active pharmaceutical grades, I mean, everything from antibiotics to antiparasitics hormones, steroids, cancer therapies, and these API APIs, they get into the wastewater because during the manufacturing process, The plants have to rinse out the reactors that produce the API in the first place.

And so they pick up trace amounts of these API APIs and they end up in the wastewater stream. So we have a variety of different treatment applications for that problem. Number one. Sometimes plants are able to segment the rinse water that comes off of the reactors that has the API APIs. And it’s usually fairly small volumes.

And sometimes we can just the most cost-effective way for us to solve that problem is just to treat that water. Neat. We don’t need any pretreatment. Or any post-treatment we simply are able to put it through our electric chemical system and destroy the API APIs down to below the predicted no effects concentration.

In other cases, the API contaminated rinse water ends up going into the main wastewater stream of the plant. It’s a much, much larger volume. And then we have to, we have to really consider what’s the most cost-effective treatment solution. For example, if there’s a lot of biodegradable organics in that water, it might make sense to put in a membrane bioreactor as a pre-treatment step to destroy the biodegradable organics, leaving the APIs for Axine to treat.

In other cases, we might have an MBR that destroys the biodegradable again. But the API APIs are very low concentration in a high volume stream. So then we will use a, a re an ROI system and the roo system will concentrate the API. Into the RO reject and the RO permeate is, uh, can be discharged or reused.

And the reason we like to concentrate is because it reduces the cost of our solution because we have a smaller stream. With a higher concentration of API APIs. So sometimes we’ll use an MBR because it’s much cheaper to treat biodegradable organics with a biological process. Sometimes we’ll concentrate the APIs using an ROS system, and sometimes we’ll just treat the water neat, depending on what the application is, this really underscores something you and I talked about before.

Every single application is different. So you have to be able to quickly evaluate what the composition and volume of the water is. What’s the right pre-treatment process in order to provide a solution. That’s the most cost-effective for the customer.

The step-by-step implementation process of an innovative wastewater treatment company

Antoine Walter: So that means that’s for you. The first step in any kind of project is going to be to take a sample of the water or the API or all the backwash or, or the stream you, you will have to treat and to determine what’s going to be the best strategy and then come up with a treatment.

Jonathan Rhone: You’re pretty close. We’ve really, I think, honed and refined our approach to working with customers over the years. And I think this is a real source of competitive advantage for companies that do this. And we always looking for ways to improve it. The first thing we do is we work with the customer. Most of them have some pretty good data about their water.

They know what their volumes are. They generally know what the range of, uh, all the chemistry is in their water. So we typically do a paper exercise, and then we provide them with a preliminary proposal. We say, this is our treatment strategy based on what you’ve given us, based on the specification you’ve given us and what’s in the water and what the goal is, and here’s the, here’s the unit processes.

And here’s what it would look like. And here’s what it would cost. Over five years and here’s our service offering. We do that as a first step. Then they’ve got something that they can compare and they can use for decision-making. They can use it for budgeting. They can use it for comparing to other alternatives.

And then if they want to go to the next. Then we start getting samples of the water. We’ll bring water to our lab, our product development center in Vancouver, or we’ll do a field pilot, but we’ll really dig into the chemistry and the process and we’ll work with them. Sometimes we find ways to make suggestions on how they can improve their water process.

So we, we really partner with them to refine the strategy and the solution to hone in on the scope. And then we work on a final proposal, both technical and commercial.

Axine’s Go-To Market approach

Antoine Walter: You mentioned the piloting. If you had to make a wild guess from your experience, how often can you skip the pilot?

Jonathan Rhone: In the early stages?

We had the pilots just about every single time and what we have done as we’ve developed a increasingly robust set of data. On what the chemistry looks like. We’re using advanced analytics algorithms and machine learning to be able to predict the performance of our technology. So we’re using technology to define the system design, and then we’re validating that with actual test results.

And so the best way I can describe it to you at one is that our engineers. They don’t really care what the, whether it’s an antibiotic or a hormone or steroids. What they’re looking at is the molecular weight. How many carbons, how many rings are in that molecule? How many electrons are required in order to break all those bonds?

And we’re able to model that and predict that in, in an increasingly refined way. So that reduces our requirements to do field piloting. And to be able to design based on data. And I think this is just another innovation that we’re bringing to, to this area of wastewater,

Antoine Walter: to give you a bit of background for my question, you know, piloting can be a technical requirement, then you really have to prove something.

But as you said, I would have expected given the way you are set up, that you can have similar results by. Modeling and leveraging digital tools, but it’s also a hurdle you have to overcome in terms of sales, because that is a point for the end user to get, hold on your system and to gain confidence in your ability to do it.

So most of the time I’m extrapolating by saying most of the time. So that is my saying, it’s not yours. Most of the time, those pilots are about reassuring the customer and more than it, they are about proving something technical. But it’s also a sunk cost because as long as you are piloting, you are still in the sales process.

You don’t have a closed contract. You’re not in the active operation of the plans. So I guess that it has some financial consequences.

Jonathan Rhone: You’re exactly right. It’s the judgment call on the one end. It provides a very, very valuable technical input on design standards and specifications. It also allows you to build those relationships at the plant level, provides confidence to the customer.

So we still do piloting. I want to be clear about that, but piloting is expensive. It takes time. It’s expensive for the customer. It’s expensive for the supplier. It takes time probably more than anything. I’m a tech entrepreneur. So I’m always looking for ways that we can with reasonable risk to reduce costs of adoption.

And, you know, part of it depends on the relationship with the customer. We’ve taken a very strategic approach to market where we’re focusing on some of the largest companies where we can establish a beachhead under a master services contract, and then start replicating across their manufacturing needs.

With those customers, you know, where they already have systems in operation, they have a higher degree of confidence. We’ve already begun to win their confidence in our technology, not just our technology, but our ability to execute, which is equally as important. That’s a little bit more advanced relationship that somebody who’s just getting to know us so that those are all factors that play into the two pilot or not to pilot, you know,

Antoine Walter: I take a sign up for myself because that means you’re much more persuasive than I am.

I remember visiting some chemical customers and them telling me, you know, whatever you’ve done with our sister companies or other subsidiaries doesn’t count because we are a special

Jonathan Rhone: sometimes that’s the case. You’re absolutely right.

Case Study: Axine’s reference case in Puerto Rico

Antoine Walter: I’ve seen your recent reference in Puerto Rico? I don’t know if the reference is recent, but the video is a recent, so I’ve seen that one and I have two questions. I’ll take that one as, as an example, my first question is on the way you execute because. Pretty blown away by your fact that you are two days on site, basically.

So you do everything in offsite fabrication, you package it in containers and you bring those containers on sites. And between the moment that you enter the site and the moment when you leave with a system, which is fully commissioned, there’s 48 hours, how’d you do

Jonathan Rhone: that? Oh, it’s variable. It depends on the application.

The goal is not, you know, 48 hours or, or a week or two weeks. The goal is to be there as long as we need to be to support the installation, commissioning, and startup and performance testing. We also have engaged local technical support in every area that we operate and we’re, we’re getting better and better at defining.

The role of operations between the customer, what the customer and the operating team on the site will do to support the system. The local service technicians, our own team at our network operating system in Vancouver, and then our field services team that looks after the sites as well. So that whole system of service operations needs to function as a well-oiled machine.

And, you know, again, this is an area. If you’re going to own the system and operate it and guarantee the performance, it has to be seamless from the customer. If the customer is our VP engineering says, if you’re thinking about the Axine system, we’re not doing our jobs. That’s a real passion for us to make that work very well.

So it might say 48 hours, but it isn’t, that’s not the goal.

Fast Commissioning and Remote Operation

Antoine Walter: Very clear. So my second question along the same line is once it’s commissioned, you have exactly what you just said. If you’re thinking about the system, then there’s a problem. So we really you’re delivering this thing. That’s you’re also operating remotely.

I was curious about first, how do you automate all of that? What’s your concept of automation? And second, how much can the system work by itself?

Jonathan Rhone: Boy, there’s a lot there. We could talk for a long time about system automation strategy, but I’ll start by saying this. Our systems are designed to operate 24 7 without operator intervention, things go wrong.

Pumps, fail joints, fail, electrodes, fail. That’s normal industrial process equals. It’s very important to us that we have a locally engaged field services team that are able to respond within hours. If required. All of our systems are wirelessly connected and stream data back to our network operating system.

And it starts with the core electric chemical system. Those reactors are monitoring. 24 7. And when we do the testing and we do the commissioning, we establish a, what we call the heartbeat of the process and said data heartbeat. And it’s algorithms that give us the operating data signature of how those electrodes and how those select a chemical system is functioning in normal operation.

And if that data heartbeat and that data signature. Goes outside of our air bars, we’re notified immediately. And usually it’s one of, two things are happening. The wastewater is out of specification. Or there’s a problem with the electrodes and electrodes are a consumable. They do need to be replaced periodical.

They don’t fail suddenly, but they will degrade over a period of time. And we always have backup electrodes on site, but we start with all of that data comes back into our network operating system. And it’s all set up to, uh, provide us with alarms. And then that goes out to our field services crew and we’ll decide whether we have to dispatch the local, locally engaged people, or one of our people have to get down to site.

Towards fully automated industrial wastewater treatment plants?

Antoine Walter: I’ve made a bet for 2022. My bet was that we would see a waste with the treatments, which would be running automatically. I do know process automation helps a lot and it’s already quite automatic, but there’s still. Uh, human, which is taken care of all the elements. If my bed comes through, I would expect it to come from a system like yours, which is in the industrial world.

Well, if you’re taking guarantees at the end of the day, you’re taking the risk. So you’re also the one which is able to say my machine is clever enough. You’re saying leveraging machine learning, leveraging process modeling. So all of that speaks in favor of a plant that would be. Somewhere down the line, really working by,

Jonathan Rhone: you have to be able to respond to mechanical failures, but the advances in automation in sensor technology.

The cost of sensor technology and a data analytics and machine learning is getting us a long way down the road. And I will say our product development and engineering team is half hardware and half software and data analytics. It is an incredibly important part of being able to deliver these complex systems and, you know, here’s something else.

We can’t as a company neatly, think about we’re going to just focus in the United States or Europe, our customers. If they have a problem with a plant in south America or in Singapore, we have to be able to deliver a solution in where they need it. So that means that we have to be able to design, build, deliver, execute, service, and monitor.

Wherever their facilities are worldwide as a small company. And one of the advantages of the, of the pandemic was that it was the great leap forward in industrial automation. And it has taught us through necessity to be able to do this faster and better and made it an urgent priority throughout the company.

So it’s a passion for us and we, um, we’re not a hundred percent there, but we are a long way. And I think that that is a source of know-how and competitive advantage that will stand us in good stead for years. Going forward,

Industrial Wastewater Treatment Company: sizing a (future) unicorn?

Antoine Walter: you mentioned you were a small company, how many people are working for Axine today?

Jonathan Rhone: We’re just over 30.

And we’re adding people every month. We’re in a pretty big growth phase.

Antoine Walter: And what’s the driver to that growth?

Jonathan Rhone: I would say it’s successful beachheads with multinationals that are. Burning confidence in the market and driving adoption. Number one, number two, we have some very exciting new applications that we’re working on in the world of PFAS that, uh, we haven’t talked a lot about, but we think that’s going to be an exciting new market for us.

Is hypergrowth a possible path in industrial wastewater management?

Antoine Walter: So if I try to recap all of that, that means that you have a diferentiated technology. You have an approach with a full system, as a service, you have a market, which is booming, which is a goods and a bad news because yeah, there’s PFAS topic is here to stay. I mean, forever chemicals are by definition here to stay.

In a nutshell, you have a business which is highly scalable. So does that mean you are on the path? Hypergrowth is it’s some things you, you were seeing for the future of vaccine, or is it like a buzzword, which I should put back where it belongs as, as a buzz word?

Jonathan Rhone: I think hyper-growth is one of those dangerous words that gets thrown around.

Depends on how you define it.

Antoine Walter: I usually throw it to once per podcast. So I’m one of these guys that’s throws the wrong quite a lot. So

Jonathan Rhone: I think the sustained momentum and growth is very exciting for scene. These are industrial processes. They, all of our unit processes are modular and scalable, but they are custom designed custom deliberate, uh, systems, depending on the water.

You know, and, and the exciting part about our revenue is that our revenue model and business model is that we’re stacking recurring revenue on top of recurring revenue. So we’ve got a pretty exciting growth path from a revenue generation stem. And a scale-up standpoint. So, well, if you think about hypergrowth and water, maybe, uh, it would be, but I think it’s going to be steady, sustained growth, and we all have experience of this in, in industrial process, uh, uh, technologies we meet to make every system work really, really well.

We need really happy customers. That’s the most important thing for us and that’s, what’s going to drive growth for us. So making sure that we. You know, and we’re not selling equipment, we’re selling services. So we have very tight relationships with our client customers and manufacturing customers.

That’s so important to us for sustained growth.

Looking ahead: what’s coming in the next 5-10 years?

Antoine Walter: If you’re looking in my crystal ball and you’re looking, I’ll let you decide in five years in 10 years, where will Axion be first and what will tell you that you’ve succeeded?

Jonathan Rhone: Just stepping back for a moment. This whole area in industrial wastewater in water in general of these persistent complex organic molecules, I think is a mega trend in industrial water is kind of below the surface.

But, you know, I think the antibiotics, the. Concerns about AMR anti-microbial resistance in the pharmaceutical industry has created kind of a tsunami of work at the manufacturing plant level to ensure that that risk is taken care of. I think P is another, another one. I think there are other areas within the chemical industry of these synthetic chemicals.

So I think from a market fundamental standpoint, I just see increasing. Pressure on manufacturers across the board to treat water, you know, and here’s a novel idea. Let’s take the clean water into our plants and let’s put it back as clean as we got it. You know? I mean, that’s really, if you think about the other trends around ESG, And how companies are thinking about do no harm and harm reduction with their, with their manufacturing process.

I see there’s just a mega trend. So within that context, our goal at Axine is to be the world leader in providing solutions for manufacturing plants around the world, starting in the pharma industry, moving into the chemical manufacturing industry. And other sectors and to continue innovating and improving the, uh, you know, our product roadmap is very, very robust from a hardware and software.

We see opportunities for dramatic improvements in cost and performance, expanding our markets based on innovation. Those two pieces are, I think what’s going to drive us to being a world leader in this.

Antoine Walter: Sounds like a path to glory and victory, but I wouldn’t have expected anything different from an industry icon.

So I think we were closing the loop somehow. I think that makes for a perfect conclusion for that deep dive, unless I’ve missed an elephant in the room. I propose it to switch to the rapid for our questions

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Rapid fire questions:

Antoine Walter: So in that last section, I’ll try to keep the question short and your duty is to try to keep the answers short as well. And don’t worry, I’m always the one which sidetracks the conversation. My first question would be what is the most exciting project you’ve been working on and why?

Jonathan Rhone: I think, um, with some of our multinational pharma companies eliminating. Antibiotics and other API APIs from getting into water is so exciting and high impact.

Antoine Walter: Can you name one thing that you’ve learned the hard way

Jonathan Rhone: I can think of about 10 different things. Wastewater requires patients.

Antoine Walter: Do you have any example of that?

Jonathan Rhone: You, it goes back to the, the market is so fragmented. Every different industry market has different problems, a different market dynamic, and it requires patience and understanding to navigate and to find where the right beachhead application isn’t. It really requires a lot of listening from customers.

So it requires a lot of patients.

Antoine Walter: Is there something that you’re doing today in your job that you will not be doing in 10 years? I

Jonathan Rhone: think I will be less involved in day-to-day sales in 10 years.

Antoine Walter: How much does that represent in your daily job today?

Jonathan Rhone: Oh, well, over 50%. Okay.

Antoine Walter: What is the trend to watch out for in the water sector?

Jonathan Rhone: I think it’s all about the data that I think that when I look at water, when we started our vaccine, you know, I would have said that innovation in water was kind of 10 or 15 years behind the energy sector, which is my reference point. And I think that that’s catching up. But I still think there is an enormous opportunity for the application data in water.

We’re just getting,

Antoine Walter: that’s very interesting because we’ve been saying a lot on that microphone, how we are usually lagging a bit behind by design for good and bad reasons in the water industry. And also that’s usually when you look at the energy sector, which is our cousin, somehow you’re looking at the future of the water sector.

So it’s interesting to see that you have. Doing that travel from the energy sector to the water sector. You experienced that, but you sing it’s catching up is maybe a good sign for the water industry, maybe a bad sign for the energy sector, because if the laggards catches on you, it’s not good for you.

Jonathan Rhone: You’re right. You’re right. I think the other thing that’s going to happen is as we see the impact of changes in the climate, we’re going to see a much more severe impact on water resources. We talked about the tubing, interrelated, climate and water. I think we’re going to see that in very tangible and difficult terms in the next, the next decade.

Antoine Walter: I do fear you’re right. I would love you to be wrong on that, but you’re absolutely right

Jonathan Rhone: on that to tell you,

Antoine Walter: well, let me see a smooth transition for my next question. If you were a word political leader, what would be your first action to influence the fate of the words? What a challenge is?

Jonathan Rhone: I think that my first action would be.

To put a price on, on water that represents the value that water has in our society. When I started in the energy industry, there was no price on carbon. A price on carbon is having a dramatic impact on the market, on the economics and the adoption of solutions. And I think that does it continues to be a gap today.

Water is too cheap!.

Antoine Walter: Yeah, I don’t want to sidetrack you here because if I do where we are at for totally new episode, but you’re fully right. I couldn’t agree more with you. It’s been an awesome discussion on my end. I hope I didn’t bother with my weird questions. Would you have someone to recommend me that would be as awesome as you to have on that same microphone as soon as possible?

Jonathan Rhone: You know, I have been privileged to work with. Some of the most incredible people who understand water. Uh, and I, I, you know, I’m, I’m, I’m in my little corner of the water market, but I would encourage you to tap into some of the people in the pharmaceutical industry. There are some real leaders in that, in that sector that are trying to address some really challenging problems and they have some really interesting perspectives and, and express.

Antoine Walter: Uh, I think that’s an interesting recommendation because that’s for sure a sector of which must have some crazy water. I mean, what you said today is reassuring to me because I’ve met some of the industrials for which water was a cost to be in business. And I do believe that is something which is rapidly changing.

Because this push towards reuse towards different value streams around the water, make it appealing even for industrials. And also because companies that cures have this approach of turning it into a service, which, which changes the, the way you look at water, it’s not longer. This troubled kids, which is somewhere in your basement.

Jonathan Rhone: There is, I think it would be interesting to talk to some of the leadership in, in that industry. Is maybe a little bit different water is becoming less of a, not just a compliance issue. It’s becoming a strategic issue from an ESG standpoint. So if you’re a big tech company and you need to hire the best and the brightest and you’re selling products in the public markets, it’s important that the supply chain.

Of making your products not be creating other problems for society. And it’s important that you have a reputation of excellence in terms of managing your impact on the environment, because that’s what young people care about today. You know, you think about attraction and retention of talent, the relationship between.

Performance and commitments and, um, ESG and water becomes a really fundamental part of all of that equation. So it elevates it from compliance to strategic,

Antoine Walter: thanks for the precision and absolutely interesting topics. So thanks for the recommendation as well, Jeanette, and it’s been a pleasure to have you on that microphone.

If people want to follow up with you, where shall I redirect them the best?

Jonathan Rhone: They can go to our websites, uh, www dot vaccine, water.com and they can get ahold of us directly through the website.

Antoine Walter: Like always all these links are in the episode description. So I’ll have a look there. It’s been a pleasure and.

I’m not saying if I’m saying when, when you’re that weird leader in the solutions in that field, I’d be happy to have you back on that microphone to check on the next step of that fascinating path. Thank you very much. Thanks.

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