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11.27.2006

Befesa puts down its roots overseas

Befesa CTA is consolidating its position in the global desalination market, having established the biggest backlog of contracted membrane plants in the business over the past two years. It is setting up a network of offices in its four target markets: the Maghreb region, India, China, and the United States and boosting international division's engineering and back office staff.

"This is a global market and you have to be in the market with permanent vision. You cannot go to a country and come back," explains Carlos Cosin, managing director of the international division of Befesa CTA. Staying in the country means making the most of follow-on project opportunities. After winning three major projects in Algeria, Befesa is now starting to get involved in smaller projects for local clients such as a process and waste water plant for steel manufacturer. "Once you have operations in a country it is more easy to develop the area. This is what we have been doing in Algeria and we are trying to repeat the model in Morocco."

Befesa has yet to win a contract in Morocco, (OCP), although it is pursuing the desalination projects at Tan Tan and Laâyoune, and it has bid on three smaller wastewater tenders. Cosin believes that the Laâyoune project is the key to the Moroccan market: if it can be made to work successfully then other, larger projects will follow, particularly in the south of the country.

With an office in Algeria and an office in Morocco, the long term strategy is to spread across north Africa. "It is clear for us that the Maghreb is a strategic area. We believe in the Moroccan market and we will see what will happen in Tunisia and Libya." Cosin is looking to appoint a general manager for the Maghreb region.

India is Befesa CTA's second key market. "For us it is a strategic market and we have been pushing until we won a contract and since we had contracted, we have seen that financing to be very strange and different in India." Befesa has an office in Chennai (to manage its 100,000m3/d project for Chennai Metro), and has been pursuing a handful of projects in Tamilnadu, Gujarat and Rajasthan. A general manager for India will be appointed soon.

In China Befesa will focus on Qingdao in Shandong province. Cosin believes that in a market the size of China it is essential for Befesa to concentrate its energy on a single area. Qingdao is looking to build sseveral desalination plants by 2010. Befesa will be appointing a small team to pursue these projects, and others which become available.

"The other office that we have decided to open is in California," Cosin continues. "It will have a different mentality. I do no think that the American market can be open for water and wastewater. We think it can be open for the desalination market." Befesa will open an office in Los Angeles with Salvador Gonzalez, formerly of American Water, as country manager.

Outside the US, Befesa will also be developing its industrial water business. "What we are doing in industrial sector first we are working with Befesa's solid waste team because they are very well introduced in substantial industrial groups." Wastewater is industry specific, and Befesa has particular expertise in steel, pulp and paper, power and food and beverage. Once the general managers for India and China are in place, the plan is to export Befesa's domestic experience to these markets.

At the same time as building the global network of offices, the international division is also building its own engineering and back office functions. The division will have 100 staff by the end of the coming year. Besides this investment in people, Befesa is also investing in research and development, with a budgeted spend of 6 million over the next five years. (Total Abengoa expenses in RD is 40)

Summarising the development plans Cosin comments, "As you see all this will cost us a fortune, but it is clear that we can cover this cost, we have project that we are in backlog and it is the proper time to do it."

The managing director of the Befesa CTA international division sees himself as an optimist. Without that belief in the future we would never have pursued projects such as the Chennai Minjur plant so doggedly. This outlook has been more than justified by events. "When I joined Guillermo's team [Guillermo Bravo is the CEO of CTA] probably just Guillermo and myself believed that it could be a reality in three years. One and a half years later it has already happened. The market has moved faster than anyone could have believed."

To access to the original interview to Carlos Cosín please click herehere
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