General Environmental Management Inc. made a strategic decision a few months ago to switch the focus of the company from hazardous waste field services to the more lucrative water treatment and waste-to-energy markets. The company’s management firmly believes that shareholders will benefit in the long-term from this move into faster-growing markets.

The company’s initial forays into these markets will focus on western areas of the United States. General Environmental has already made one large deal in the rapidly-growing water business. The recently-closed deal saw the company acquire California-based Santa Clara Waste Water, a profitable 50 year old wastewater treatment business.

General Environmental also recently made a move into the waste-to-energy business. The company signed a letter of intent with privately-held Cake Energy LLC, a waste-to-energy technology company, to build and operate leading-edge waste-to-energy facilities in the western United States. Cake Energy has developed proprietary technology which turns sludge into energy.

Cake Energy’s proprietary technology has other believers in it besides General Environmental such as the Heinz family, which has invested into the company. A single plant of this type is believed to be capable of processing up to 120 tons of sludge per day. The anticipated revenue model is to charge municipalities a flat price per ton of waste processed as well as sell the excess energy generated from the process. General Environmental hopes to build the first such plant within the next two years.

With the move into these faster-growing, more-profitable markets, General Environmental should be able to build upon its already enviable track record – growing their revenues at a 47% compounded annual rate since 2002. In the United States alone, the water industry is a $120 billion market and growing at a 6%-7% rate. The waste-to-energy market is growing at an even faster pace and is currently a $20 billion global market.

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