Consolidated Ecoprogress Technologies Inc.
350-789 W Pender St.Vancouver, BCV6C 1H2
IR contact: Tom Hands
www.flushaway.com
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expansion of sales activity, underlined by theannouncement that Ecoprogress has just madean order for 36 containers of product for salein key markets.The progress follows on the heels of a majorproduct and packaging redesign that hasearned Flushsaways praise from consumers. Asthe world’s first and only flushable, biodegrad-able fem-hy offering, the products give womena convenient and environmentally responsiblealternative. Newly revamped, Flushaways nowcompare favorably with large competitorsofferings in independent, third-party con-sumer research.Ecoprogress makes products using a substituteplastic material known as polyvinyl alcoholfilm (PVA), a material that disintegrates whenwet. Depending on how the company formu-lates PVA and how they treat it, it can be usedin many applications calling for conventionalplastic. Because PVA breaks down in water,products such as feminine hygiene napkins andliners can be made to have minimal environ-mental impact. Conventional fem-hy productswill break down only after about 300 years ina landfill. Ecoprogress’ Flushaways break downwithin minutes.While the company has been around for abouta decade, it has suffered a number of delaysand complications on the way to market. Aseries of management groups failed to converton the PVA opportunity.The company began a turn-around last year with a newpresident, John Banks, lead-ing a revamped team. Banksis a turnaround specialistwith a number of successesbehind him in Europe andNorth America. Banks’ firstturnaround role was withChase Manhattan Bank inthe 1980s where he waspart of a team that turnedaround their office in Paris,France. He subsequentlyled the turnaround of theFINANCIAL ProfileThird Quarter, 2005 Symbol: TSX-V CES... Consolidated Ecoprogress Technologies Inc.TSX-V: CESWith today’s announcement that it has order36 containers of its lauded Flushaways femi-nine hygiene products, valued at $US1.8 mil-lion, Consolidated Ecoprogress TechnologiesInc. (TSX-V: CES) has fired a warning shotacross the corporate bows of the likes ofProctor & Gamble and Johnson & Johnson.Indeed, a series of recent announcements fromthe company reflects a number of develop-ments showing the company’s acceleratingmove to market with Flushaways—the world’sfirst and only disposable, biodegradable femi-nine hygiene products.In the past 90 days, Ecoprogress has signed anagreement for distribution in South Africa,appointed key personnel, completed a 2.2 mil-lion share private placement, made early deliv-ery on a recent US Wal-Mart order, signed asecond major US distributor, raised additionalcapital through the exercise of warrants, madeits first order for a new version of theCompany’s core technology, evolved supplyand distribution deals in China, and launchedFlushaways in Canada. During this time,Ecoprogress and Flushaways received mediacoverage in The Toronto Star, Western Grocer,and Cosmopolitan Magazine in South Africa.The Company’s efforts are resulting in a rapidConsolidated EcoprogressTechnologies Inc.TSX-V: CESShares O/S approx. 37 mynSuite 350-789 W Pender St.Vancouver, BCV6C 1H2Telephone: 604.738.7015Facsimile: 604.738.7051IR contact: Tom Handswww.flushaway.comWith today’s announcementthat it has order 36 contain-ers of it’s lauded Flushawaysfeminine hygiene products,valued at $US1.8 million,Consolidated EcoprogressTechnologies Inc. (TSX-V:CES) has fired a warningshot across the corporatebows of the likes ofProctor & Gamble andJohnson & Johnson.Ecoprogress Up on Growth Curve$US1.8 million order marks beginning of rapid sales growthEVIDENCE OF EFFORTS
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FINANCIAL ProfileBank’s office in Frankfurt, Germany. Banks’largest project was managing the US$650 mil-lion post merger integration of AstraZenecawhen the two Companies merged. This inte-gration saved AstraZeneca US$1.0 billion.Other businesses that Banks has worked withinclude Marconi, National Westminster Bank,De Beers, and in British Columbia with ICBCand BC Hydro.With Banks in charge, Ecoprogress has movedforward more rapidly and more consistentlythan ever and is now arguably in the best shapethe company has ever been in.Banks inherited a company that needed majorchanges. Its product, while effective, was ageneration out of date. While the competitionoffered thin napkins and liners, Ecoprogressproducts were bulky by comparison.Moreover, they cost considerably more. Whilethey had gained some acceptance based onconvenience and ecology, Flushaways obvious-ly had considerably more potential. While so-called green products often capture around afive-point market share based solely on theirenvironmental appeal, Flushaways offered a lotmore—namely convenience.After re-organizing management, Banks andhis team reformulated the product. It cameback from the process as thin as any competi-tor’s and could be made at a lower cost, mean-ing it could be priced the same as any otherfem-hy product. Product in hand, the compa-ny went out to a branding consultant to haveFlushaways wrapped in a new, more appealinglook. The results were excellent. In third-party,consumer research, women said they loved thenew Flushaways product and packaging.The team’s overriding goal had been to build afully integrated supply, manufacturing, andsales organization. Armed with a truly compet-itive product, Ecoprogress could now becomemore aggressive in evolving sales throughexpanding distribution agreements.Since the beginning of the year, the companyhas announced a series of distribution dealsand orders indicating real growth in sales.The first key distributor to sign on, Dr. Fresh,based in California, placed Flushaways in USgiant retailer Wal-Mart. Dr. Fresh has broaddistribution reach throughout major US chainslike Walgreens, Target, Eckert, Target and oth-ers. With annual sales of about $US20 million,Third Quarter, 2005 Symbol: TSX-V CES... The team’s overriding goalhad been to build a fullyintegrated supply, manufac-turing, and sales organiza-tion. Armed with a trulycompetitive product,Ecoprogress could nowbecome more aggressive inevolving sales throughexpanding distributionagreements.Since the beginning of theyear, the company hasannounced a series of distri-bution deals and orders indi-cating real growth in sales.the company has been rated by Inc. Magazineas one of the 50 fastest growing companies inNorth America.In addition to signing a distribution agreement,Dr. Fresh has also taken an equity position inCES.In the first half of this year, the companyannounced a distribution deal for Africa. Theagreement, with Envirostar, covers SouthAfrica, Namibia, Mozambique, Zimbabwe,Lesotho Swaziland and Botswana. The three-year deal provided Ecoprogress an immediatepurchase order of one container of Flushaways,with an approximate value of $US50,000, withminimum purchasess from Ecoprogress of$275,000 in the first year. Ecoprogress expectsannual sales to Envirostar to increase each sub-sequent year.Envirostar is a South African company, basedin Johannesburg. It focuses on distributing eco-friendly products into the South African mar-ket. It has been working on building awarenessof Flushaway for the last two years through itsconnections with large chain stores such asPick’n’Pay, Hypermarket, and Clicks.Flushaways were also featured in the July issueof Cosmopolitan Magazine’s South AfricanIssue.Ecoprogress also signed another significant USdeal with SPD Inc. The agreement with SPD isfor the United States territory and focuses onnew distribution opportunities with the UnitedStates Government (worldwide), cruise lines,airlines and outlets such as Whole Foods Corp.and HEB—a chain with stores in Texas andMexico. SPD has distribution centres inOakland, Calif., and Dallas, Texas.This agreement is for three years. SPD hasagreed to purchase orders in full containerswith minimum orders being $US50,000. SPDexpects first-year purchases to reach $US1.0million and grow from there.Ecoprogress also marked the launch ofFlushaways in Canada with exposure in theMay 15 issue of Western Grocer Magazine.Western Grocer targets store managers andbuyers of retail chains in Western Canada. TheMay/June and July/August issues carry full-page advertising of Flushawasy. Ecoprogresswill also showcase Flushaways in an editorial toappear in the July/August issue, which is dedi-
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cated to personal hygiene. This is the firstmajor Flushaways advertising to retailers inCanada. Combined with other promotionalmaterials, sales activities and the new prod-uct/pricing mix, management anticipates retail-er acceptance of the new Flushaways productfollowed by Canadian sales. Placement discus-sions are under way with Canadian retailers.Before the end of the first half of 2005, itbecame clear that sales would not be an issuefor the company. Essentially, distributorsreported that they could sell as much productas Ecoprogress could deliver. The real issuewould be supply.Banks and his team had been working ondeveloping a reliable source of supply frommain land China. Negotiations moved forwardover the course of several months and now,with the announcement that it has ordered 36containers of Flushaways valued at $US1.8 mil-lion, there is clearly a stronger supply chain atwork.In conjunction with developing a base of oper-ations in China, the company has begun towork on reformulating it PVA film. Initial esti-mates suggest the new formulation will signifi-cantly reduce film costs, increase scalability,improve machine-ability and retain good func-tional performance. When used in theFlushaways feminine hygiene range it shouldreduce the cost of goods by 15 per cent to 20per cent.With deals now firm on the supply and distri-bution ends; the product, packaging, and pric-FINANCIAL ProfileSecond Quarter, 2005 Symbol: TSX-V CES... ..... ing re-formulated; and growing attention fromthe media, Ecoprogress has scored with all fiveclassic marketing Ps—product, packaging,placement, pricing, and promotion.Reflecting this fact, the company’s stock charthas a pretty nice look to it. It’s a smooth look-ing rounded bottom chart formation withgood, primary support at the $C0.20 level.Resistance comes in around just below the 30-cent mark. A five-to-ten-cent gain should beeasy. A volume breakout above $C0.30 couldhave the stock up by as much as another 20cents.Longer term, the potential looks much greater.The fem-hy market alone is worth billionsannually, and distributors feel Flushawayscould quite easily surpass a five per cent marketshare. Any way you look at it, that kind of sce-nario will reward investors.Beyond fem-hy, Ecoprogress will foreseeablyenter other markets, notably adult inconti-nence, a growing segment that lacks any realcompetition characterized by existing brandrecognition and/or customer loyalty—so it’s apretty open field. There’s also the disposablediapers market, as well as a number of productsapplications of PVA not much discussed byEcoprogress at this time.All things being equal, shareholders ought tobe pleased with the way things have beengoing at Ecoprogress this year, and if the com-pany continues to succeed, they’ll have a lotmore to be happy about this time next year.Beyond fem-hy, Ecoprogresswill foreseeably enter othermarkets, notably adultincontinence, a growing seg-ment that lacks any realcompetition characterized byexisting brand recognitionand/or customer loyalty—so it’s a pretty open field.There’s also the disposablediapers market, as well as anumber of products applica-tions of PVA not muchdiscussed by Ecoprogress atthis time.Financial Profile has received payment of $C2,600 for production and distribution of this report. We are an advertising service, not an investment advisory service. This documentshould not be considered a solicitation or recommendation to buy or sell securities. All due diligence should be conducted by the reader and/or their investment advisor. Investing inspeculative issues is inherently risky. Always seek the advice of a professional advisor before making investment decisions.Flushaway’s striking new packaging compliments a vastly improved version of the world’s firstand only flushable, biodegradable fem-hy product line.
