IVRCL Infrastructures & Projects Ltd has entered a joint venture agreement with the Finland-based water chemistry major Kemira Oyj to set up a manufacturing unit to produce chemicals required for water treatment.
The venture also aims to provide market for the chemicals manufactured by Kemira.
Kemira will have 51% stake in the JV and the rest would be shared by IVRCL and its subsidiary Hindustan Dorr Oliver.
The JV will set up a plant at Visakhapatnam, Andhra Pradesh, for manufacturing inorganic coagulants, which are essential chemicals used in industrial and municipal water treatment. The facility is expected to be operational during the second half of 2011.
IVRCL has already executed a water treatment project in Chennai for desalinating the sea water and pumping out potable water for the Chennai water supply board.
The built-operate-transfer (BOT) project has become operational recently and is expected to provide revenues of `48 lakh per day. IVRCL, using the Chennai desalination project as a proof of concept, has been working on a plan to provide similar solutions to various civic bodies, focusing on those on the coastline.
“Mumbai for instance is an immediate probability. Though there is a procedure for the civic bodies concerned to float tenders, as and when it is done IVRCL will be ready with a plan. The experience in Chennai will place the company ahead of competition,” a source said. Similarly, HDO has been eyeing opportunities in the industrial sector for water treatment projects including treatment of effluents.
The JV is expected to provide the back-end support for water treatment projects in the form of cost-effective supply chain for procuring relevant chemicals. While IVRCL has been designed to handle BOT projects till the stage of their execution, HDO has expertise in water treatment technologies and design engineering.
“Combining Kemira’s water chemistry know-how and IVRCL’s expertise in building water infrastructure we are able to meet the rapidly growing water demand, especially in the industrial customer segment,” Hannu Virolainen, senior vice-president, industrial customer segment, Kemira, said in a statement.
]The financial implications of the project are expected to be at lower levels since the scope for future expansion is linked to demand for such solutions and chemicals.
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