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Singapore's Hyflux wins contracts for desalination plants in Tlemcen and Oran

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  • Singapore's Hyflux wins contracts for desalination plants in Tlemcen and Oran

    SINGAPORE (Reuters) - Singapore water treatment firm Hyflux Ltd. said on Thursday that it was in a joint venture to build a desalination plant in Algeria for $238 million.

    A company statement said Hyflux and Malaysia's Malakoff Bhd entered into an agreement with Algerian Energy Company (AEC) to form a project firm to design, build, finance and run a seawater desalination plant at Tlemcen for 25 years.

    AEC will hold 49 percent of the project, which is expected to be completed within 24 months. The balance of the project will be held by Malakoff and Hyflux.

    Hyflux said its effective equity interest of 10.2 percent is estimated to be $5 million.

  • #2
    additionally to these millions they will sales the salt
    A government that robs Peter to pay Paul can always depend on the support of Paul.
    By: George Bernard Shaw


    • #3

      ALGIERS, March 31, 2008 (Thomson Financial) - Singaporean company Hyflux Ltd. will build a water desalination plant for an investment of $468 million in the Oran region, western Algeria, within the next 36 months with a capacity of 500,000 cubic metres per day, APS press agency reported.

      A joint venture company, MTM Spa, will be set up to ensure all the phases of the project are carried out. It will be 51 percent owned by Hyflux and 49 percent owned by Algerian Energy Company, which was created in 2001 by Algeria's state oil company Sonatrach and state electricity and gas company Sonelgaz.

      AEC chairman Amanallah Sari said the plant will be the biggest desalination project in the world, in terms of volume of production.

      Algeria has launched the construction of 13 desalination plants which are to be built between now and 2010 to provide drinking water for urban centres. They are to ensure supplementary production of drinking water of about 2.3 million cubic metres per day.


      • #4

        Lundi 31 Mars 2008 -- Le groupement singapourien Hyflux va réaliser en Algérie dans un délai de 36 mois une méga-station de dessalement d'eau de mer dans la région d'Oran d'une capacité de 500 000 m3 par jour pour un montant de 468 millions de dollars, a annoncé l'agence de presse APS.

        Une société mixte, MTM Spa, sera créée pour assurer le suivi de toutes les étapes de ce projet. Elle sera détenue * 51% par Hyflux et 49% par l'Algerian Energy Compagny (AEC), une entreprise créée en 2001 par le groupe pétrolier public Sonatrach et la société publique de l'électricité et du gaz Sonelgaz.

        Cette station est considéré comme le projet de dessalement "le plus important au monde" sur le plan du volume de production (500 000 m3), selon le PDG d'AEC Amanallah Sari.

        L'Algérie a lancé la construction de 13 stations de dessalement qui doivent être achevées d'ici * 2010 pour l'approvisionnement en eau potable des agglomérations urbaines. Elles doivent assurer une production supplémentaire d'eau potable de l'ordre de 2,3 millions de mètres cubes par jour.


        • #5

          SINGAPORE, April 22, 2008 (Reuters) - Singapore water treatment company Hyflux said on Tuesday it had won an order worth $468 million for a seawater desalination plant in the Oran region in western Algeria with a capacity of 500,000 cubic metres a day.

          The company said in a statement that the deal would double its order book to S$1.5 billion ($1.1 billion).


          • #6
            Grace Ng:

            April 22, 2008 -- HYFLUX has clinched a major deal to build what it says is the world's largest seawater desalination plant in Algeria with a project value of US$468 million (S$632 million).

            The deal is an important boost to the home-grown water treatment company's ambitions to become a top global player, analysts said.

            Hyflux announced on Tuesday that it had won the bid from the Algerian state-owned firm Algeria Energy Co (AEC), which handles power and water privatisation in the country.

            The plant, located in the Oran region of western Algeria, will have a capacity of 500,000 cubic metres a day. It will use Hyflux's reverse osmosis membrane technology to supply water to the state-owned national public water group and the national oil company of Algeria.

            Hyflux won the bid because it offered competitive pricing and had a 'proven track record in delivering large-scale desalination projects', said Ms Olivia Lum, Hyflux chief executive at a media and analyst briefing yesterday.

            The massive project will almost double Hyflux's total order book to about S$1.5 billion as at April this year.

            Its unit MenaSpring Utility will hold a 51 per cent stake, with the rest held by AEC. The project will be 70 per cent financed with loans from local Algerian banks, and 30 per cent equity. Hyflux will invest $80 million in the project.

            The project is not expected to have a material impact on Hyflux's financial performance this financial year. But it is a 'very profitable', partly because it enjoys 'low interest rates' of 3.75 per cent a year on the project financing offered by the Algerian banks, said Mr Sam Ong, deputy CEO. He added that the project satisfies Hyflux's target of 12 to 15 per cent returns for each project in its global portfolio.


            • #7
              May 27, 2008:

              MAY, 2005. Hyflux announces net profit for the quarter to March is up 219 per cent to $8.98 million. Revenue doubles year-on-year to $24.2 million; 72 per cent of sales come from the Middle East and the company expects hundreds of millions of dollars worth of projects from the region. Share price? Roughly $3.65.

              May, 2008. Hyflux announces net profit is up five-fold to $5.7 million. Revenue, at $89.6 million, is five times the restated $17.5 million in the year-ago quarter. North Africa and the Middle East account for 56 per cent of sales and Hyflux has just secured a $630 million desalination contract in Magtaa, Algeria. Share price after the announcement? Roughly $3.65, and going on to hit $3.71 as of yesterday.

              But investors probably still remember what happened after 2005. Within ten months, Hyflux was trading down at around $2.70 after it sold its stake in a Middle East joint venture to its Dubai partner, Istithmar, in March 2006. Hyflux said that it made a 20 per cent gain from the whole affair but investors, who had hoped for millions of dollars worth of new Middle East projects, sold the stock down viciously. One analyst said that only a quarter of the anticipated orders materialised.

              Will Algeria be Dubai redux? At the current moment, with Hyflux on the rise, once-burnt investors have yet to turn shy again. Perhaps they should. The Magtaa plant has not yet contributed revenue to Hyflux, but there are some troubling omens.

              According to Global Water Intelligence, an industry publication, Hyflux's bid for Magtaa included a remarkably low engineering, procurement and construction (EPC) cost - just US$441 million for a 28-month construction period. The closest rival bid was for US$457 million over 36 months.

              And the desalinated water price, which provides recurring revenue for the company, was just 55.77 US cents per cubic metre - possibly the lowest tariff in the world, according to GWI.

              The low EPC cost should be a worry, going by Hyflux's latest profit statement. According to its Q1 results, construction profit from an earlier 200,000 cubic metre per day desalination plant in Tlemcen, Algeria is coming below expectations.

              CIMB's Jessie Lai calculated that Tlemcen contributed $49.8 million in sales but overall, gross margins contracted 26 percentage points year-on-year on higher construction costs.

              Ms Lai noted that Hyflux's Q1 core earnings, after stripping out one-off items and a $5 million forex gain, was just $0.9 million, despite the surge in revenue.

              In May 2005, DBS Vickers made much the same point about Hyflux - core earnings, after taking out a $5.5 million fair value gain, was just $3.5 million due to lower EPC profits. Nevertheless, some analysts remain bullish on the stock. JPMorgan, for example, is retaining an 'overweight' call, saying that it expects positive news flow from project wins in China and Algeria.

              It's likely that Hyflux's pipeline of new deals isn't drying up any time soon. For the past year, it has been announcing 200 to 300 million yuan (S$39-59 million) worth of new orders every few months. That's going to add a lot to headline revenue numbers, even without considering the mammoth Magtaa contract. Hyflux says that it hopes to book EPC revenue from that deal of $600 million from 2009 to 2011.

              But high sales don't necessarily translate into good earnings if costs shoot up. The Tlemcen precedent is worrying; CIMB's Ms Lai notes too that higher construction costs were incurred at an unnamed China water project due to changes in design specifications. Higher recurring income should help earnings, but as noted, Hyflux may have had to slice its tariff rates to the bone to secure new contracts.

              And margins will also depend on cost of capital. Hyflux said that it secured 75 per cent of the funding for Magtaa at a 'very low' rate of 3.75 per cent. The remainder could be borrowed for Libor + 1.5 per cent, according to management.

              Those rates are astonishingly low. Some say that this could be due to Hyflux's good relationship with the Algerian government. An Algerian Energy Company (AEC) source told GWI that 'we had instructions from the government' to award Hyflux the smaller Tlemcen deal (Magtaa was won in an open tender put out also by AEC). And the Algerian banking sector, which is providing the 3.75 per cent loan line, is dominated by state banks.

              Investors will remember that Istithmar, Hyflux's old Dubai partner, is an investment holding company owned by the United Arab Emirates government. Algeria, embroiled just ten years ago in a bloody civil war, will hopefully prove to be different.


              • #8

                Lundi 7 juillet 2008 -- La société Algerian Energy compagny (AEC) a confié * la société Hyflux de Singapour un contrat d'un montant de 468 millions de dollars pour la réalisation d'une unité de dessalement d'eau de mer * Magtaa (Oran), d'une capacité de 500.000 m3/jour.

                Le contrat a été signé dimanche soir * Alger par le PDG d'AEC, filiale des compagnies publiques Sonatrach et Sonelgaz, M. Amanallah Sari et du PDG de Hyflux Mme Olivia Lum, en présence du ministre algérien de l'Energie et des Mines Chakib Khelil.

                L'usine de Magtaa sera financée * hauteur de 30% sur fonds propres du groupe Hyflux, les 70% restants étant assurés par des banques publiques algériennes avec pour chef de file la Banque Nationale d'Algérie (BNA).

                Selon M. Khelil, il s'agit du projet de dessalement "le plus important au monde", qui doit entrer en service en 2011 et couvrir les besoins en eau de prés de cinq millions d'habitants.

                L'Algérie a lancé un programme de dessalement comptant 13 stations, dont deux ont été livrées * Oran et * Alger. Deux autres sont en cours d'achèvement pour être réceptionnées en 2008 * Beni Saf (200.000 m3) et Skikda (100.000 m3).


                • #9

                  ALGIERS, July 8, 2008 (KUNA) -- The Algerian ministry of energy and mines announced Tuesday it had signed a contract with the Singaporan industrial group Hyflux to build one of the largest water desalination plants in the world in the province of Oran, west of here. The plant will produce up to 500,000 cubic meters of desalinated water daily and is estimated to cost when built at least USD 468 million. According to the terms of the contract, the ministry of energy will purchase desalinated water from the Singaporan company building the plant at a cost of USD 0.55 for the cubic meter. In effect the company will build the plant and sell its product to the ministry of energy. When completed and operational, the plant will meet the water needs for at leat five million people, making it one of the largest projects of its kind. The Singaporan comany will finance 30 percent of the project whereas the rest will be financed by a consortium of Algerian banks.


                  • #10

                    SAN LEANDRO, California, December 9, 2008 (BUSINESS WIRE) -- Energy Recovery, Inc. (ERI), a global leader of ultra-high-efficiency energy recovery products and technology for desalination, announces the award of another large-scale energy recovery contract for seawater reverse osmosis (SWRO) desalination in Algeria. The Souk Tleta SWRO Desalination Plant, located in Tlemcen in Northwestern Algeria, will have a total capacity of 200,000 cubic meters per day (m(3)/day) (52.8 million US gallons per day (MGD)). The plant is slated to begin operation in the first half of 2010.

                    The Souk Tleta plant is being built by the Singapore-based company Hyflux on a 25-year build, own, operate and transfer (BOOT) basis. It will provide desalinated seawater to the Algerian Energy Company (AEC), the state-owned national water entity of Algeria. Under the contract, ERI will supply the plant with 260 PX-220 energy recovery devices that will save an estimated 21 MW of energy.

                    Earlier this year, Hyflux also contracted ERI's PX technology for the 100,000 m(3)/day (26.4 MGD) Tianjin desalination project. This is the largest desalination project contracted in China to date.

                    Borja Blanco, ERI's GM and VP, Mega Projects Division, stated, "This is a significant award for us in that we are able to provide our client with maximum energy savings which results in the lowest life-cycle costs. Our technical staff works closely with all involved to ensure that the project achieves or surpasses the energy recovery expectations."

                    About ERI

                    Energy Recovery, Inc. (ERI) is a leading manufacturer of energy recovery devices which help make desalination affordable by significantly reducing energy consumption. ERI's PX Pressure Exchanger(R) (PX(R)) device is a rotary positive displacement pump that recovers energy from the high pressure reject stream of SWRO systems at up to 98% efficiency with no downtime or scheduled maintenance. The company has research, development and manufacturing facilities in the San Francisco technology corridor as well as direct sales offices and technical support centers in key desalination hubs such as Madrid, UAE, Shanghai and Florida. ERI service representatives are based in Algeria, Australia, China, India, Korea, Mexico, Taiwan and the Caribbean.