European Stock Story of the Month – NX Filtration
March is a month which heralds longer days, the first signs of spring and almost everything seems a little brighter. But as we know the world is problematic and it is us humans that cause damage and harm and suffering. Climate change is now potentially too far advanced to reverse according to the IPCC’s latest report. Unprovoked conflict has been unleashed on a sovereign state, threatening the stability that Europe has known for three quarters of a century.
This month’s stock story comes from a scientific advance using nanotechnology and will have a material impact on the world around us, improving lives, not just ours, but also the flora and fauna which humankind has treated with such disdain for so long. NX Filtration is a Dutch company which provides nanofiltration technology, enabling customers to produce pure water, treat wastewater and reduce their water footprint. Its focus is to remove small particles causing contamination, such as hormone-and medicine residues in the purification of drinking water. The company was founded by 2016 and is headquartered in Enschede, the Netherlands. Here we explore why NX Filtration has captured our imagination and why have we bought a company before it has started to generate profits?
Water scarcity and water quality are major global and structural issues and key drivers of the water market. For example, it is estimated that 1.1 billion people worldwide lack access to water, and a total of 2.7 billion people find water scarce for at least one month of the year. By 2025, approximately two-thirds of the world’s population may face water shortages. The use of biologically treated wastewater is seen as an important method for producing high quality water both for industrial use and drinking water. Wastewater discharge increasingly poses challenges for the environment, due to the presence of antibiotic resistant bacteria, viruses and PFAS[1], resulting in health issues from contaminated drinking water. By removing micropollutants from wastewater streams, NX Filtration ensures that contamination does not enter ecosystems causing devastating effects. An example of this is riverine male fish turning into females due to chemical pollution, specifically estrogenic endocrine disrupting chemicals.
NX Filtration’s unique selling proposition is its patented nanofiltration membrane technology which not only removes micropollutants, colour and selective salts, but also bacteria, viruses and nanoplastics, from water in one step. NX Filtration sells its filtration membrane modules to companies and local government customers all over the world in two business areas: Clean Municipal Water and Sustainable Industrial Water. As of the end of last year, NX Filtration employed 69. A small company with a powerful impact.
In Indonesia, NX Filtration provides access to improved water sources. dNF membrane modules have turned the local Masjid river into a valuable source for the supply of drinking water to the city of Dumai, with a population of over 3 million. NX Filtration has also installed a water recycling application at a leading denim jeans company in India. dNF membranes remove colour completely and reduce large parts of COD (Chemical Oxygen Demand) and TDS (Total Dissolved Solids) partially from wastewater. From a circular economy perspective, chemical inputs and expensive commodities such as indigo and caustic soda are recaptured, recycled, and reused in the process.
Another selling point for customers is that NX Filtration’s dNF membranes require less energy achieving a significant CO2 footprint reduction compared to water treatment systems based on conventional filtration, reverse osmosis, adsorption using activated carbon and oxidation. In research coming from Dutch based EeG[2] looking at drinking water, the gross energy requirements for a system based on direct nanofiltration use approximately 70% less energy than a typical combination of ultrafiltration and reverse osmosis. NX Filtration’s dNF solution also significantly reduces the use of chemicals in operations which are needed to buffer the water after reverse osmosis treatment, leading to another significant cost saving.
This is a small company and is yet to post its first profit. That is scheduled to happen in 2025. The challenge is for CEO Michiel Staatsen and founder Erik Roesink to manage growth and reinforce systems and controls to drive their ability to roll out the product. They have raised substantial cash to bridge the gap to profitability, and the news flow in terms of recruitment at executive level is in line with the messaging we have been given. Here is a company with purpose and although the challenges of scaling up and meeting growth target should not be underestimated, NX Filtration and its technology is already helping to solve a very real and growing problem.
Written by Rory Hammerson
[1] Also known as forever chemicals, these migrate easily into air, dust, food, soil and water. PFAS is short for perfluoroakly, and polyfluoroakyl substances. PFAS exposure can cause liver damage, thyroid disease, lower fertility, hormone imbalance and cancer.
[2] Energie en Grondstoffenfabriek
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