Press Releases

Source : The Independent

The Independent - HaloSource strikes another India deal

by : Nikhil Kumar 

Monday, 9 May 2011

A couple of weeks ago, we looked at Origo Partners, the China-focused private equity firm whose investments span everything from electric batteries to mining to clean water technologies of the kind promoted by HaloSource, the AIM-listed group which unveiled a major deal with India’s Bajaj Electricals last week. Origo owns 4.3 per cent of HaloSource, which has invested heavily in ways to purify drinking water. And although that business currently accounts for a relatively small proportion of overall revenues, the company’s finance chief James Thompson says HaloSource is focused on growing its activities in the area to capitalise on the opportunities in emerging markets such as India and China.

The rationale is straightforward. Countries like India boast an increasingly affluent urban middle class which is often wary of drinking water straight from the tap. Urban households often install water filters, and in many cases boil tap water before drinking.

HaloSource offers what it calls a breakthrough technology that doesn’t simply filter out visible impurities but also purifies the water of harmful viruses and bacteria without depending on electricity. Its gravity-driven HaloPure cartridges cleanse the water of micro-organisms such as poliovirus and rotavirus, all the while boasting low operating costs.

“Purifying drinking water at very low cost has been identified by many consumer appliance OEMS [original equipment manufacturers] around the world as a major growth market opportunity,” Liberum Capital said in a report ahead of the company’s listing on AIM in October last year.

The technology meets both the safety and disinfection guidelines laid down by the World Health Organisation, and the standards of the US Environmental Protection Agency. The latter is notable, as it leaves HaloPure well placed to meet rising regulatory standards in its target markets.

“Outside of HaloPure, the principal appliances that address waterborne diseases are categorised as ultraviolet light and reverse osmosis devices,” Liberum explained. “However, these devices commonly cost several hundred US dollars.”

HaloPure devices, in contrast, are available in the $40 (£24) to $50 range, according to Mr Thompson, with replacement cartridges costing around $7 apiece, making them far more affordable than the alternatives. The group has made significant inroads in India, forging agreements with Bajaj and Eureka Forbes, both of whom are major players and know the local market extremely well.

The Bajaj relationship began last year, and last week’s announcement marks HaloSource’s second supply agreement with the group.

HaloSource will supply Bajaj with its HaloPure Waterbird gravity water purifiers, which will be branded the Bajaj XTP 21 and XTP 21 DX. The company will also supply replacement cartridges for the devices, which are expected to be launched later this month.

Although India dominates for now, the company is also targeting Brazil and is set to sell its products in China, where it is awaiting regulatory approval. Once it has all the requisite clearances, Mr Thompson says HaloSource has a number of partners in mind to roll out the products across the country.