Growing the infrastructure businessAt the press & analyst briefing on the Growth Strategies of Keppel Integrated Engineering (KIE) & Integrated Solid Waste Management Project in Qatar on 19 October 2006, Group Finance Director Mr Teo Soon Hoe and CEO of KIE Mr Chua Chee Wui, outlined the growth platforms of Keppel’s infrastructure division and the growth strategies of Keppel’s environmental engineering business respectively.
Keppelite re-produces Mr Teo’s speech.
At the turn of the century, Keppel Group had identified the Infrastructure business to have growth prospects. We then set out to acquire the appropriate technologies and to invest in R&D to apply the acquired thermal and water technologies in differing markets.
On the demand side, we see increased opportunities for infrastructure solutions and services globally.
Rapidly growing economies have fueled the need for more efficient waste and water management systems. More and more countries are also capitalising on carbon credits achieved from adhering to the Kyoto Protocol’s emissions reduction standards.
Worldwide demand for power generation is also strong.
Global energy demands are poised to increase significantly, and issues of energy security are pushing more and more countries to look seriously at using diversified fuel sources to meet their needs.
The growing trend of privatisation of national power assets also opens up investment opportunities.
In the last few years, we have made significant inroads in power generation and environmental engineering, particularly in waste-to-energy and water treatment.
By the end of this year, our cogeneration power plant and NEWater projects in Singapore would be completed. Our incinerator project would be generating income from 2009. Also, by this year-end, our power barges would be operating out of Ecuador.
We are currently in a good position to secure more projects in our areas of operation.
This landmark project in Qatar will boost KIE’s earnings for the next three years and provide a steady baseload from operations & maintenance for another 20 years. This is achieved without the need for capital investment.
Following from this solid waste management project in Qatar, we shall pursue more such infrastructure projects in the Middle East.
This Qatar project is an important tipping point in our attempt to build another growth platform for the Group.
The several projects we have embarked upon both in Singapore and elsewhere, will add to the Infrastructure base of earnings.
Part of the increasing income would be ploughed back to enhance our technologies so that we can continue to sustain Infrastructure’s significant contribution to the Group’s bottomline in the years to come.
Keppelite re-produces Mr Chua’s speech.
KIE owns two categories of in-house technologies and processes:
The first category is thermal technologies. These are mainly for treatment of solid waste. Thermal technologies used to treat Municipal and Industrial waste streams are usually coupled with energy recovery systems to capture useful heat energy which can then be used for heating or cooling purposes, and for steam and power generation.
The second category is water treatment technologies which harness biological and membrane processes. This combination of technologies is particularly well suited for treatment of wastewater for re-use.
These two categories share a common trait of recovering useful resources from waste.
We have the patented Dano Drum which is our recycling technology that pre-treats and sorts out the waste leaving a more homogeneous, volume-reduced mixture for combustion.
The core of the WTE technology lies in the Multi-Stage Grate furnace, where the calorific value of the waste is extracted. The flue gas processes ensure the optimal removal of toxic substances from the waste gases before they are released into the environment.
All the thermal technologies reduce wastes, whether municipal, industrial, hazardous, to fully inert solids which can be safely released into the environment, and at a fraction of the original waste volume.
Our various water treatment solutions are scalable and modular, and together enable the treatment of wastewater for responsible disposal or reuse and consumption.
KIE’s environmental business model combines its two core competencies, Technology with Project Management
Historically, the bulk of the revenue came from selling technology and equipment packages and EPC contracts. Such a business model is subject to very lumpy revenue streams.
To have a more sustainable earnings model, the way forward is to operate such facilities that we design and build, as it would offer recurring earnings, and because we are the inventor, creator designer and builder of such plants, nobody else is better placed to operate a plant because we know the full characteristics of such plants. While Keppel Seghers has built and operated various plants in Europe and Asia, the Qatar project is by far the most significant of such projects that KIE has undertaken. The returns from the Qatar project will enable KIE to build up its resources for future growth.
Taking the design, build, operate model one step further, Keppel is selectively pursuing infrastructure development and investment opportunities as well. We have already invested in a 800 ton per day WTE plant (Singapore’s first incineration plant to be built under the Public-Private Partnership (PPP) initiative) and a 148,000m3 per day NEWater plant in Ulu Pandan, which will be the largest water recycling plant in Asia. These are flagship investments made by Keppel in environmental infrastructure. Having these home-ground assets are essential when marketing to overseas clients.
|
