Hydrotek targets Burma
Hydrotek, an engineering firm, is taking steps to enter the waste-treatment and water-management business in Burma after the government there adopted a policy to open the country.
"We have more confidence to invest in Burma after [US] Secretary of State Hillary Clinton met Burmese leaders last month. This is a good sign," chief executive officer Slib Soongswang said yesterday.
The move is part of the company’s expansion strategy in Asean that is initially focused on Burma and Laos, after it succeeded in mobilising funds from the public and listed on Market for Alternative Investment late last year.
Burma is interesting because it is similar to Thailand 30 years ago, in that it has a lot of manufacturers but lacks a wastewater-treatment system. A country with a growing industrial sector also normally lacks tap-water supplies. The Burmese government is planning to issue a regulation on restricting wastewater from manufacturers in a few months.
During his visit to Burma last week, Slib met with the head of the Rangoon City Development Committee of the Ministry of Agriculture and Irrigation. He said after the meeting that the company would invest in water supplies for manufacturers in industrial estates besides wastewater-treatment systems. However, the policy on environmental regulation is still uncertain.
Water supply in Burma is 511,000 cubic metres a day, which reaches 60 per cent of the total population of 60 million people. Wastewater treatment runs at 12,360 cubic metres a day. About 80-90 per cent of manufacturers in Burma have not installed a wastewater-treatment system.
Hydrotek has hired a Burmese consultant to conduct market research on the water- and wastewater-treatment businesses in that country. The survey is expected to be completed in two weeks.
"The company will start entering the overseas market, focusing on Burma, then Laos and Oman," he said.
The company will initially establish a joint venture of Thai firms and local partners.
It has recently opened a representative office in Rangoon.
In Burma, the joint venture will consist of three main parties – Thai partners with more than 20 years of experience in doing business in Burma, local partners and Hydrotek.
The investments in Burma and Laos are expected to realise income within 18 months after a contract is signed.
The Thai water-management market is expected to grow 15 per cent annually. Currently, the market is worth about Bt5 billion. Hydrotek, after raising funds, can now handle projects on the scale of Bt3 billion to Bt4 billion each.
The company aims to expand its backlog this year to Bt1.4 billion from Bt1.1 billion now. About 80 per cent of its backlog is expected to be realised as revenue this year. The company also expects to win more projects worth Bt1.5 billion.
