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Metito aims to expand horizons

UAE-based water solutions firm looks to break into other markets

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Metito, UAE, COMMENT

Local water services provider Metito has taken the next step in its evolution by welcoming two major Japanese companies on board as investors.

Mitsubishi Heavy Industries (MHI) and Mitsubishi Corporation (MC) are expanding their footprint in the Middle East water market through a 38.4% holding in the Dubai-based company, it was revealed last month.

Metito hopes that the “significant investment” will propel the company “further on its journey of success”.
The stake is being purchased from private equity investor Gulf Capital while Japan Bank for International Cooperation (JBIC) has also agreed to invest up to $92mn in new classified shares to support Metito’s growth opportunities.

“Such a deal will undoubtedly strengthen the ties between the Middle East and Japan in the water and wastewater industry, and will further build a leading and competitive working platform in emerging markets,” Metito said in a statement.

“The partnership also generates synergy merits in a range of areas, including financial strength and capability, complementary experience and global networks, business development opportunities and operational capability.”
The investment is a smart move and one that will provide long term benefits for all parties, according to a leading analyst.

“Japanese companies are expanding their geographic portfolios by focussing on investments in emerging markets like the Middle East and the GCC in particular,” says Kshitij Nilkanth, program manager, environmental technologies practice, Middle East, North Africa and South Asia, at Frost & Sullivan. “This alliance will increase financial stability, business development opportunities and also help in leveraging global presence for each other’s benefit,” he added.

“Metito would be able to reinstate its position in the Middle East’s water industry where it has traditionally been strong, and become more competitive in other emerging markets. Metito will also be able to focus on acquiring new business with stronger financial backing provided by this alliance.

“Mitsubishi Corporation (MC) and Mitsubishi Heavy Industries Ltd. (MHI) stand to gain from Metito’s expertise in the water sector, opening new business avenues in the several water stressed regions where Metito has a local presence.

“A strategic partnership of this nature is designed to be mutually beneficial and all parties look to seize new opportunities by combining established expertise, operational capabilities, and global network.”

Metito has built more than 3,000 facilities for water desalination, water treatment, wastewater treatment and recycling and operates in Egypt and China as well as the UAE.

The company ranks in the top five worldwide in terms of number of installed desalination plants, according to the International Desalination Association (IDA).

MHI has an extensive track record in building large-size desalination plants in the Middle East and has developed advanced technologies for water treatment, the statement said.

MC has been building up management know-how in the water business through investments in Japan, Australia, the Philippines and Chile.

Gulf Capital and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, will each hold 23.8% and 3% of Metito following the deal.

Mutaz Ghandour, CEO, Metito, said: “MC and MHI are exceptional companies. We are excited to be partnering with them to implement our strategic plans for growth and to seize the opportunities that await us, as we fully utilise our varied synergies.

“Metito is already well poised to tap into projects of various scales, and this partnership, in addition to the investment by JBIC, will expedite the company’s growth through creating new opportunities and allowing us to become more competitive, globally.”

Masaji Santo, senior vice president, division COO, MC, said: “This investment is ideal for us as it creates a compelling strategic partnership capitalising on our global network and corporate capabilities and Metito’s unique value proposition.”

Karim El Solh, CEO and managing partner of private equity at Gulf Capital and serving chairman of the Board of Metito, said: “This strategic investment into Metito by MC, MHI and JBIC is a reflection of the success of the management team and the Ghandour family.

“Already established as a profitable entity, since Gulf Capital’s initial majority investment in Metito in 2006, the Company increased its net profitability by 661%. It further strengthened this position as a leading provider in the global water and wastewater industry, registering an annual compound growth rate of 17% in revenues, 32.3% in EBITDA and 33.6% in Net Profits over the last eight years.”

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