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$53m INVESTMENT

Alstom to set up Saudi power generation JV

Riyadh, December 3, 2013

Alstom, a global leader in the world of power generation, has joined hands with Saudi-based Arabian Bemco Contracting Company to set up a manufacturing unit for power generation equipment in Jeddah.

With more than 750 installed  Heat Recovery Steam Generators (HRSGs) globally, Alstom is a world leader in the engineering and supply of HRSGs for all gas turbine types, whilst Arabian Bemco is an experienced turnkey contractor and local manufacturer within Saudi Arabia.

The two companies have already successfully worked together, including on the Riyadh PP12 steam-tail project bid, which was secured last year.

Both Alstom and Arabian Bemco will take a 50 per cent stake in the new JV company, Alstom Arabia Power Factory, which will be set up at an initial investment of over SR200 million ($53.3 million).

To be located in King Abdullah Economic City, north of Jeddah, the factory will train and employ hundreds of Saudi nationals to start with.

In the first phase, the Jeddah facility will manufacture power generation components, primarily HRSGs which is used in combined cycle and cogeneration applications to increase thermal cycle efficiency and minimise fuel consumption. In the second phase, the partners envision expanding the scope of the factory to other power generation equipment.

This operation reflects Alstom's on-going commitment to localisation within the kingdom and offers strong market opportunities across the Middle East, said a senior official.

"The creation of this joint company is another step towards increasing Alstom’s localisation in Saudi Arabia. Working with reputable local partners such as Arabian Bemco is key to our growth strategy in the Middle East," remarked Philippe Cochet, the president of Alstom Thermal Power.

"This announcement follows other initiatives that Alstom has undertaken recently such as launching a services workshop and a training programme with SEC to further create employment and develop young talent in this country," he noted.

Cochet pointed out that following the technology transfer, the JV will be the exclusive licensee of Alstom HRSG technology in Saudi Arabia.

It will afford Alstom and Bemco a strong local base across the Middle Eastern region, which represents around 25 per cent of the global market. In addition to Saudi market, this facility will also cover key territories such as Iraq, Bahrain, Kuwait, Qatar, Oman, UAE, Yemen, Jordan, Syria, Lebanon and Egypt.

According to Cochet, the demand for gas-fired power plants is on the rise in the Middle East and Saudi is also moving towards gas-fired power generation.

"The joint company would be well equipped to cater to this demand by combining product expertise and technology excellence from Alstom and local presence and logistics offered by Arabian Bemco," he stated.

Henry M.Sarkissian, the CEO of Arabian Bemco, 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."

"We are rapidly expanding presence in the Middle East and the JV will equip both partners to serve an increasingly important power generation market with technologically-advanced and highly efficient equipment," he added.-TradeArabia News Service




Tags: Saudi | Alstom | Power generation |

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