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SINGAPORE: The Singapore water treatment firm Hyflux is looking to become a bigger player in the global water industry.
It has signed a memorandum of understanding (MOU) with the Japan Bank for International Cooperation (JBIC), paving the way for partnerships with Japanese firms in water projects in Asia, the Middle East and North Africa.
The fast-growing global water industry is estimated to be worth some US$500 billion annually, according to Singapore trade agency IE Singapore. And this is expected to increase over the next few years, on the back of demand from developing nations.
Executive director, JBIC, Fumio Hoshi, said: "We can do loans, loan guarantees, equity participation, mezzanine financing, and we have many tools to support joint ventures between Hyflux and Japanese corporations, especially in this difficult financial situation, I think we can do quite a lot."
Group deputy CEO, Hyflux, Sam Ong, said: "JBIC and Hyflux have common goals to develop water products at a global scale, worldwide. So what we have is a situation whereby Japanese companies will provide the funding, equipment and components, and Hyflux will provide process technology to operate the plants and the build the plants."
Hyflux already purchases equipment from Japanese firms, such as reverse osmosis membranes and pumps.
The latest deal will allow Japanese water firms to tap into Hyflux's industry know-how. The two partners are eyeing potential joint projects in the Middle East, India and China.
However, JBIC said it is unlikely to refinance loans from Hyflux's earlier projects. Rather, it is more interested in new projects where Japanese companies are involved.
Earlier this month, Hyflux reported strong profits, mainly due to strong performance from its projects in the Middle East and North Africa region. Hyflux has stepped in to fill the rapidly growing demand for water in that region, with more potential projects on the way.
Mr Ong said: "The North African countries and China are countries that we believe are adopting membrane-based technology and Hyflux is going to be well-positioned. In Algeria, we have 30 per cent of the desalinisation market share."
Hyflux also recently signed an MOU with Libya to develop desalinisation in the North African economy, which could give it up to 50 per cent of the market share there.
Hyflux said its 20-year track record in the water business has allowed it to quickly access fast-growing markets and cut itself a big slice of the pie.
But the water technology firm said that it owes much of its progress not to just its partners but its staff as well. Hyflux credited most of its growth in the Middle East and North Africa to the willingness of its staff to head out into the middle of nowhere.
Mr Ong said: "We are quite successful in getting these people to join us not just in Singapore, but also in Algeria and in China, to have the passion and the tenacity to make good their delivery for Hyflux."
For the half year ended in June 2009, Hyflux booked a 10 per cent increase in net profit to S$31 million, on the back of a 13 per cent rise in revenue.
- CNA/yt
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