Alstom, Arabian Bemco to Set Up Saudi Power-Generating Equipment Factory

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Alstom (OTC:ALSMY) (Paris, France) is in a 50:50 joint venture with Arabian Bemco Contracting Company (Jeddah, Saudi Arabia) to set up a power-generation equipment manufacturing unit in Jeddah.

The initial investment in the facility by the partners will be more than $53 million. The factory will be sited in the King Abdullah Economic City, north of Jeddah, and hundreds of Saudi nationals will be employed in the early stages. In the first phase, the factory will manufacture power-generation components, with the major share of production going to heat recovery steam generators (HRSGs). These will be used in cogeneration and combined-cycle power plants to increase thermal cycle efficiency and minimize fuel consumption. The partners envisage expanding the scope of production to other power-generation equipment in the second phase.

The joint company would be well-equipped to cater to the rising demand for gas-fired power plants, particularly in the Middle East and Saudi Arabia. Alstom has installed more than 750 HRSGs globally, supplying products and performing engineering for all gas turbine types. Arabian Bemco has broad experience as a turnkey contractor and local manufacturer in Saudi Arabia.

The two companies already have worked on projects together, including the Riyadh PP 12 steam-tail project. Arabian Bemco won the $1.3 billion contract for the 2,175-megawatt (MW) plant project in May 2012.

The manufacturing plant will give both Alstom and Bemco a strong local base across the middle Eastern region, which represents about 25% of the global market. In addition to the Saudi market, it will cover key areas such as Iraq, Bahrain , Kuwait, Qatar, Oman, the United Arab Emirates, Yemen, Jordan, Syria, Lebanon and Egypt.

Alstom has undertaken initiatives to launch a training program with Saudi Electricity Company (SEC) to create further employment and develop young talent in the country. Following the technology transfer, the joint venture will be the exclusive licensee of Alstom HRSG technology in Saudi Arabia.

Henry M. Sarkissian, Arabian Bemco's CEO, said: "Having successfully executed some of SEC's most prestigious power projects in Saudi Arabia, including the world's largest combined cycle power plant, Arabian Bemco is one of the leading engineering, procurement and construction (EPC) contractors in the region."

For related information, see April 9, 2013, article - Saudi Arabia's Saline Water Conversion Corporation Progresses Yanbu 111 Power and Desalination Project.

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