VA Tech Wabag to Implement $64 Million Water Management Solutions for Power Plants in Andhra Pradesh

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Researched by Industrial Info Resources (Sugar Land, Texas)--VA Tech Wabag India Limited (BSE:533269) (Chennai, Tamil Nadu), a leading global water-management solutions provider, has secured a contract from the Andhra Pradesh Power Generation Corporation Limited (APGENCO) (Hyderabad, Andhra Pradesh) to construct water treatment plants and allied facilities at the Kakatiya and Rayalseema thermal power plants. The plants will have power-generating capacities of 600 MW each. The $64.34 million contract has been awarded as part of the balance of plant package.

As part of the contract, VA Tech Wabag India will install and commission units for demineralization; polishing condensates; water and effluent treatment; recycling; and cooling water circulation. According to Rajiv Mittal, the managing director of VA Tech Wabag India, work on the project will begin immediately. Detailed engineering and design reports will be presented to the client, after which construction will begin. The project will be completed in two and a half years.

VA Tech Wabag India is part of the Wabag Group, which has more than eight decades of experience in providing advanced water treatment and management services to global clients. The group employs 1,500 people and operates in 19 countries worldwide. In 1996, the group began its operations in India. In November 2007, the Wabag Group was restructured after Siemens AG (NYSE:SI) (Munich, Germany) sold its stake in VA Tech Wabag GmbH to VA Tech Wabag India Limited. Presently, there are about 157 patents registered in the name of the Wabag Group and its subsidiaries. To date, the group has executed 900 installations, which has provided clean water infrastructure to 340 industrial houses, companies and 160 million people.

VA Tech Wabag India, which has a market share of 50% in the country, is one of the leaders in water management solutions. In India, the company employs 800 people, who also service customers in Oman, Indonesia and Dubai. The company has implemented India's first wastewater recycling facility at Panipat in Haryana; Asia's biggest waste water treatment facility at Jamnagar in Gujarat; and the first wastewater treatment plant built with ultra-filtration technology. In order to strengthen its presence in India, VA Tech Wabag India has established an international engineering center to develop new and innovative technologies.

Recently, the company secured a contract to construct a seawater desalination project for Chennai Metropolitan Water Supply and Sewage Board (Chennai Metro Water). The contract, considered to be for the largest desalination facility, will be built on a design-build-operate model. The facility, which will be built on 40 acres of land at Nemmeli, will supply 100 million liters per day of treated water. VA Tech Wabag India has chosen the reverse osmosis (RO) technology for this project, which is expected to cost about $118.2 million. The contract also includes seven-year operations, maintenance and support services valued at $110.9 million. VA Tech Wabag India has formed a joint venture with IDE Technologies to build this plant. The treated water will be supplied to southern areas and suburbs of Chennai city. Currently, the company supplies 30% of Chennai Metro Water's supply of 650 million liters of water per day. VA Tech Wabag also manages about 50% of Chennai's sewage treatment and disposal.

For the year ending March 31, 2010, VA Tech Wabag India recorded an increase of 7% and 17%, respectively, from the same period in the previous year in net sales and net profit. The company, which generates 60% of its business from government agencies and the remainder from industrial customers, has an order book value of about $710 million to $732 million.

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