Abengoa Water prioritises tech investment
- From: Vol 13, Issue 5 (May 2012)
- Category: General
- Region: Europe
- Related Companies: Abengoa and Befesa Aqua
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Last year, Abengoa Water was created out of the concessions and technology interests of Befesa Water. CEO Carlos Cosín outlines the bold moves that the new company has been making to guarantee its competitive advantage.
Abengoa Water is developing proprietary reverse osmosis membranes as part of its strategy to build a lasting competitive advantage in the desalination market. It is also investing in new technologies including forward osmosis and membrane distillation, and is making a pitch for the industrial wastewater market as it gears up for expansion.
“Abengoa is going pretty well,” explains Abengoa Water CEO Carlos Cosín. “Group revenues were up by more than 40% in 2011, and we are seeing continued growth this year. What I have to do is to develop new concessions in water.”
He adds that when the group was created out of the original Befesa Agua unit, he was given a direct reporting line to the chairman of Abengoa, Felipe Benjumea Llorente. This was to enable him to accelerate the growth of the water business, which is significantly smaller than the other businesses in Abengoa’s concessions portfolio. Besides taking responsibility for owning and operating water treatment facilities, Abengoa Water also houses the group’s water research and development activities. The engineering, procurement and construction side has been moved to Abeima, which is a subsidiary of Abengoa’s engineering and construction division.
“Abengoa has invested €38 million in water R&D in the past two and a half years. I have established four programmes and 18 projects for R&D. The first programme is desalination: how are we going to reduce the cost? We are also looking for solutions for second-generation desalination, which is the only way you can break the model. We have invested in forward osmosis, membrane distillation, and in programmes to develop advanced solutions which might give us a chance to break through.
“The second project is in membranes, for which we have our own facility in Bilbao. The idea is not to produce membranes to compete with Dow and Hydranautics, but to have the knowledge within Abengoa.
“In future we will develop the membranes. We want to have the knowledge inside our company so that we can then work with membrane sellers and say: ‘please can you build these membranes?’ My idea is to ask for specific membranes for specific applications. It is a very ambitious plan.
“Thirdly, I want to investigate solutions for water and wastewater treatment. I am not going to bid a project with simple technology. In this area we have many projects. For example, we are developing a good solution for sludge, and we already have good solutions for aerobic and anaerobic treatment.
“The fourth is the sustainability programme. Here we are combining renewable energy sources: solar, wind energy and also marine energy, which is both wave power and tidal power. All of them are an option if you are out at sea.
“We have to kill the [R&D] projects that cannot give us an advantage in the market, even if they are very good projects. If I am not going to realise a profit, I will simply kill 25% of the projects and put another batch of projects in the pipeline.”
A “solutions” division will form the bridge between practical propositions for customers and the R&D department. “I am afraid that I will not succeed if I just have an R&D centre. They might come up with clever ideas, but I may not be able to convert those ideas into practical projects unless I have Abengoa Solutions,” Cosín explains.
The company is also set to diversify beyond its core municipal desalination market into water reuse, water and wastewater treatment, and the industrial water sector, with a particular focus on oil and gas, mining, power, and renewables. Cosín points out that the industrial production division of Abengoa (which specialises in solid waste handling and materials recycling, among other things) already has references in salt crystallisation, an important technology for the oil and gas and mining sectors.
As things stand, Abengoa Water has interests in five concessions originally developed by Befesa, and is expected to close the financing on a fifth, a 60,000m3/d plant at Nungua in Ghana, within the next few weeks. Beyond this, the company expects to accelerate its growth rate as a result of its investments in China and the US. “In the past, we would do one concession per year for the whole world. Now I have built up the company so we have three geographies: the US, China and the rest of the world. We will do one project per year in each geography,” Cosín predicts.