SWPF Exclusive: Samer Mazloum, WETICO
WETICO issues a project update and considers its overseas plans
Deputy general manager Samer Mazloum discusses current projects and international ambitions for the Saudi utilities giant.
Can you provide a brief explanation of WETICO’s role in the Kingdom’s water sector?
Basically, WETICO is an EPC contractor, and our role is to execute water, wastewater and desalination projects. Our focus at this point in time has been Saudi Arabia due to the economic boom that is ongoing in spite of the recession. So far, WETICO in KSA has been responsible for executing a majority of the wastewater treatment plants and recently we have expanded into the large-size desal plants.
The latest project that’s being executed by WETICO is the 240,000 cubic metre Jeddah 3 desal plant. At the same time, we are working on an MBR treatment plant - the Najran STP, which has a capacity of around 70,000 cubic metres per day. These are the two biggest projects we are working on at this point.
Of course, we also cater for the various private entities in the Kingdom such as Coca Cola, Pepsi, Nestle and these are the guys that take pride in the quality of the product they produce, so they usually look for a premium type of treatment and in the plants that they buy.
Can you provide a project update on those two major contracts you just mentioned?
The Jeddah 3 deal is a three-year project and we are still in engineering phase with our JV partner, which is Doosan. So if we start from August, the project should run to August 2012, if everything goes according to plan and all the engineering and so on is approved.
The Najran STP is either a two- or three-yearr project and is under way already. We’re probably looking at completing that in around August 2011.
What is in the pipeline for the future?
Well, WETICO has recently been expanding its operations. We cover most of the Gulf region and have a presence in Qatar, UAE and Iraq. We also have a WETICO North Africa office, which is based in Algeria. WETICO Kazakhstan handles our Caspian business, and we also have WETICO India, which is effectively our engineering back office.
On the international front, our main focus is in Kazakhstan and Algeria. But we see huge growth potential in North Africa and South Africa, as well. In particular, Kazakhstan is doing well in terms of expanding and developing the country, and our focus on the oil and gas companies in the country is turning out to be a good investment.
Why is WETICO sponsoring SWPF 2009?
WETICO is a Saudi-based firm and our origins are here in the Kingdom. It’s where the company started and also where our strongest market is. SWPF is probably the premier water event in the country, so for us it’s definitely a strategic choice for us to be at SWPF 2009, to sponsor it and to make sure that everybody knows that WETICO is one of the major water treatment companies in the Kingdom. We just want to make a mark and say that we are here.
This event draws in companies from outside of the country and the Middle East, as well as the more local companies. It’s developed well over the last few years and drawn a fair bit of attention, so it gives excellent exposure to local companies, and excellent references for those looking to expand or build in the utilities market in Saudi Arabia. These are either private entities that are developing BOT or BOOT projects or government agencies that are looking to obtain products or services that may not be available in the Kingdom. So this is why the event has caught on so quickly.
What challenges is the Saudi utilities market facing at the moment?
At the moment, the big issue is privatisation. Saudi Arabia started off by privatising the water sector. Of course, electricity was privatised but still subsidised by the government. So the Kingdom is now looking at privatising the developing BOT projects for developments for the utilities sector.
The problem that has occurred over the past year to 18 months has been the world economy, which has left some issues for those considering investing in and developing the Kingdom’s private utilities market. So the major obstacle for us right now is that we need to develop these utilities – either BOT or BOOT are not going to move as swiftly as we hoped they would because of the recession. So the Kingdom I believe will move towards financing these projects, just to keep the timelines on track.
How important would you say the government’s role in driving the sector forward has been?
We saw a lot of projects this year that we didn’t expect. Actually the Najran STP came up during a time when recession was hitting everywhere and this is a government-subsidised project. We’re looking at other projects coming up this year as well. Given the data that was shared with the public a couple of years ago, the trend was BOT or BOOT. So we, as EPC contractors, were starting with contractors and looking at companies that were going to be investing and developing these types of contracts.
All of a sudden, the market collapsed, and we started looking at the government-financed projects. This is where the government put the market back on track. If they hadn’t done that, the sector would have suffered. There’s definitely a huge amount of work still going on, not only in the water sector.
What would you say to companies considering investing in the Saudi sector?
Like I said, the government backing here is excellent, and of course we have an excellent source of income, which is oil. It may not be as strong as it was when it was selling at around US $100 a barrel, but what we’re seeing today that the government has really stepped in to help the utilities sector when it needed support for those projects that were supposed to be privatised.
So any company that invests in Saudi Arabia is definitely going to have a fair chance to develop its business, because if things don’t progress perfectly on the privatisation front, the government is always there to back up the local companies. Stability of investment is something that every company looks towards, and it’s definitely here in Saudi Arabia.