Desalination solution provider Aqualyng’s recent sale of a 50 per cent stake in its Chinese subsidiary to state-owned Beijing Enterprises Water Group (BEWGL) will help win projects and raise financing, according to Origo Partners CEO Chris Rynning.
Origo, which has a 9.2 per cent equity interest in Aqualyng majority shareholder Staur Aqua, and Rynning said the agreement means the joint venture can compete very efficiently in the local market with world class desalination technology.
‘Being linked to a state owned company will both bring competence on how to work in China, win projects and raise finance,’ Rynning said. ‘China is building the world’s largest desalination plants and a partnership is absolutely crucial.’
BEWGL is majority owned by Beijing Enterprises Holdings, the commercial vehicle of the Municipal Government of Beijing with significant interests in gas supply, toll roads, waste water treatment, brewing and technology.
‘We believe working with the Beijing Government and BEWGL in particular will differentiate Aqualyng in the marketplace. Moreover, it provides an international expansion opportunity as China is involved in building infrastructure worldwide, from Australia to the Middle East and Africa,’ Rynning said.
Aqualyng China has begun to develop a sea water desalination plant at the Caofeidian Industrial Zone outside of Beijing in partnership with the Tangshan Infrastructure Construction and Investment Co.
‘With its rapid urbanisation, China will build the world’s largest desalination capacity over the next years and decades. As water tariffs are increasing, desalination quickly becomes an economical and in some cases, the only sustainable water source,’ Rynning said.
He said energy efficiency and scalability are among the key considerations why Aqualyng has succeeded in China and that no other Asian or global market has the same growth potential.
Rynning added that growth in China will come through jointly developed projects but because the market is still in its infancy, there are few attractive acquisition targets.
‘That said, when opportunities present themselves, we may be compelled at looking at them, but key focus will be organic growth.’