ANNUAL INFORMATION FORM – XEBEC ADSORPTION INC. – For ...

and there are another 510 landfills that are good candidates for projects. In addition, at the end
of 2010, it is estimated that there will be approximately 8200 dairy and swine operations that
could support biogas recovery systems. As biogas production increases globally, so will the
demand to convert it into pipeline grade methane or liquid natural gas for use as a transportation
fuel.
Pursuant to the budget of the Québec government released on March 19, 2009, the
government announced the establishment of a program to develop green energy technologies to
further stimulate innovation in this sector and develop new markets. The Québec government
will, among other things, set up financial support programs to promote investment in bio energy
production and will invite the federal government to help fund such initiatives as part of its
promise to invest approximately $1 billion in green energy infrastructure within the next five
years. To that end, the Québec government will, among other things, be introducing a program
for municipalities aimed at the installation of anaerobic digestion technologies to produce biogas
as a replacement for fossil fuels. The intended investment of $650 million will be funded by the
Québec government, the federal government and municipalities.
Natural gas vehicles
A desire for energy security, cheaper and cleaner fuels, and improved air quality, make
natural gas an interesting alternative source of energy for motor vehicle propulsion. Sales of
natural gas vehicles are presently growing at an annual rate of 18% worldwide and it is expected
that there will be approximately 65 million natural gas vehicles in circulation worldwide by
2020. In terms of regional growth in the natural gas vehicle market, since 2000, Asia leads with
a growth rate of 50.1%, South America is next at 27.9%, Africa follows with 21.3%, Europe at
12.9%, while North America is at 3.7%. When compared to the rest of the world, the natural gas
vehicle market in North America has yet to realize its full potential. The natural gas vehicle
market may represent a significant growth opportunity for Xebec’s natural gas dehydration
products.
Filtration products for natural gas
Xebec’s filtration products for compressed natural gas dryers and compressed air dryers
complement its adsorption product offering. These filtration products cover a complete range of
filter housings and filter elements for Xebec’s products as well as for some of its competitor’s
products. Each of Xebec’s adsorption products requires between 2 to 4 filters, generating
excellent aftermarket opportunities. As the installed base of adsorption units systems grows, the
aftermarket and replacement element sales will increase, generating a recurring revenue stream
for Xebec.
Sales and Marketing
Xebec sells its products and services through a number of channels including direct sales,
channel partners, and project developers. Xebec’s Blainville - based sales team is dedicated
primarily to North American sales but is also responsible for other areas including Europe and
South America.
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