Emerging Markets

SES to supply gasifiers to Brazil’s Vamtec Vitoria in deal worth more than USD 100m

Synthesis Energy Systems, Inc. (SES) is slated to supply coal gasification technology to a USD 400m Vamtec Vitoria SA biodiesel production plant, according to Vamtec Vitoria Feasibility and Project Director Jean Levitre.

The deal is likely to be valued at more than USD 100m. SES CEO DeLome Fair yesterday that the company remains in “strong consideration” for a project in South America that could net it over USD 100m in revenue, likely in reference to the Vamtec Vitoria project. Pressed by analysts for more information about the deal, she declined to provide further comment.

Vamtec Vitoria recently received a nod from the municipal legislature in Candiota, Brazil to build a local USD 400m methanol gasification-based biodiesel production plant, according to local media reports. The facility will provide 750 tonnes/day of methanol to the local market and utilize SES technology to gasify low rank coal.

Vamtec Vitoria has signed a letter of intent to purchase a 70MW turbine from Mitsubishi Groupsubsidiary Mitsubishi Heavy Industries for the facility. The company is also planning to build a 4000 t/d coal gasification train, 1300 t/d oxygen plant, 1300 t/d argon plant and 200 t/d argon plant. It is preparing an environmental impact assessment now that should be completed within two to three months. Vamtec will meet with its undisclosed investment partner in December to review the capex and opex of the project and, if green lighted,seek an EPC contractor by 2H17.

Vamtec is looking for financing to support the construction of the project, according to local media. The company is attempting to raise 70% of the value of the facility via the Banco Nacional de Desenvolvimento Economico e Social (BNDES) and the remaining 30% via equity investors. Levitre said it is in talks with various investors now and declined to provide more information.

The Vamtec Vitoria plant will help reduce Brazil’s reliance on imported methanol, a key component of biodiesel. Each liter of biodiesel contains about 12% methanol and Brazil currently imports about 1.5m tonnes of the chemical compound annually. Brazil has ramped up its biodiesel production in recent years, a development that has contributed to a 675m-tonne reaction of greenhouse gas emissions.

Based in Houston, Texas, SES sells technology that can convert low grade coal, biomass and municipal solid waste into energy products for applications in the power generation, industrial fuels, chemicals, fertilizers and transportation fuels industries. The company reported revenues of USD 500,000 for the three months ended 30 June, down from USD 4.6m on the year. As of that same day it had USD 13.8m in cash and cash equivalents and USD 2.4m in working capital.

SES has built extensive ties to industry and government in China over the last several years. It is angling to use its base of operations in the country to faciliate a global expansion in the company years. For example, the company’s Chinese joint venture with Suzhou Thvow Technology Co Ltd, known as Suzhou Tianwo SES, is likely to be involved in supplying equipment to SES’ projects in South America, CEO DeLome Fair said earlier this year. Simon India Ltd, another SES partner based in India, is also likely to be involved, Fair said at the time.

SES declined to comment on this story.

 

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Opportunity of the Week: CSSC awards machine tool contract to European companies

CSSC Marine Power Co, a subsidiary of China State Shipbuilding Corporation (CSSC), has recently purchased a variety of production equipment via international tenders, said the tender agent. CSSC chose Fives Landis Ltd’s crankshaft grinder, IMT Intermato SpA’s CNC turn-mill center, Hexagon AB’s gantry coordinate measuring machines, and horizontal machining center from Juaristi TS Comercial SL, said Huang Pianpian from Beijing Rui Chi Fei Si Tender Co, the appointed agent representing CSSC in this case.

Those orders will be delivered within an eight to 18 months period at various Chinese ports such as Nanjing and Anqing.

CSSC is strengthening its position in China’s engine market even with the current low market demand. In July, it acquired a 30% stake in two-stroke JV Winterthur Gas & Diesel (WinGD) from its partner Wartsila Corporation; following the transaction, CSSC owns 100% of WinGD. Market research shows that in China’s medium-speed diesel engine market, Weichai Heavy Machinery and CSSC Marine Power take up a 58.9% market share. In October 2015, CSSC Marine Power renewed the contract with MAN Diesel & Turbo for another 10 years of production of four-stroke medium speed engines. In May 2016, the company’s 6S60ME low-speed diesel engine started operation. The latest designed model is the largest diesel engine constructed by CSSC Marine Power, which weighs approximately 390 tons.

 

IIICorp’s deal origination tool provides early-stage, actionable intelligence on opportunities in the world’s fastest-growing markets. For more information, visit https://www.iiicorp.com/ContactUs

Opportunity of the Week: GCL-Poly Energy to build a 1200T/D waste incineration plant with USD 45m in Henan

GCL-Poly Energy Holdings Limited, the subsidiary of Golden Concord Holdings Limited (GCL Group), will build a new waste-to-energy (WTE) plant in Yongcheng city in Henan province. An estimated total project investment (TPI) of USD 45m (CNY 300m) will be required to build the 1200 tons per day (T/D) WTE plant, according to Dai, the project contact person.

Dai explained that the core employed equipment consists of three 400T/D mechanical grates, 12MW and 18MW condensing steam turbine generators as well as 12MW and 18MW electricity generators. Heat recovery steam generators (HRSG), automated control devices, and crushers will also be needed. Apart from above equipment, the WTE station will also entail environmental protection measures, including fly ash stabilization processing, flue gas treatment, and leachate treatment. He said equipment procurement will be after the environmental impact assessment (EIA), maybe later this year.

Dai said that project financing is from bank loans and company assets. Credit is being granted by five major banks in China, including Bank of China Limited, Agricultural Bank of China (ABC) (中国农业银行), China Construction Bank Corporation (中国建设银行股份有限公司), Industrial and Commercial Bank of China Limited (ICBC) (中国工商银行), and Bank of Communications Ltd (BOCOM Securities). However, he did not provide the loan amount each bank would provide.

Jiangsu Academy of Environmental Industry and Technology Corporation Ltd is undertaking the EIA. Now they are working on the first draft of the EIA report after receiving some public suggestions.

 

 

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AVR Vidyuth looking for foreign investors for developing 225MW gas-based power plant

AVR Vidyuth Private Limited is planning to start discussions with foreign investors to raise funds for developing a 225MW gas-based power plant at Adavipolam in Yanam district of Puducherry, said Vishnu Vardhan Rao, MD, AVR Vidyut. The company is also looking for a foreign EPC contractor to invest in the project, he added.

Rao said that the proposed project has been approved by the government of Puducherry. Land required for the project has also been procured. Once a foreign investor and an EPC contractor is finalized, AVR Vidyuth will approach the government of Puducherry for allocation of gas required for the project, he added.

The total cost of developing 1MW of gas-based power will be about USD 750,000 (Rs. 5 crore), said Ashok Kumar, Administrator, AVR Vidyuth. Based on this metric, the total project investment (TPI) of the 225MW power unit will be around USD 168.7m (Rs. 1125.8 crore).

Project equipment would typically include air compressors, gas turbines, steam generators, combustion chambers, condensers, fuel burners, jet pipes and propelling nozzles, fuel valves, and synchronous generators, among other equipment.

 

 

To find out more about this and other opportunities, contact us at https://www.iiicorp.com/

Exploring PE Investing in Niche Manufacturing & Industrial Services Companies with Capital Roundtable

Middle market industrial-focused private equity (PE) firms are increasingly turning to the world’s fastest growing economies to boost portfolio company returns at a time of sluggish economic growth in the US.

Growing a portfolio company’s international footprint is key to increasing returns today, according to participants in a recent Capital Roundtable conference entitled Private Equity Investing in Niche Manufacturing & Industrial Services Companies: Strategies for Enabling Profitability in a No-Growth Environment. Opportunistic international expansions into complex markets such as China, India and Brazil can distinguish a company from its competitors, in effect boosting its value to strategic buyers.

Bolt-on acquisitions of production facilities, suppliers, distributors or other assets appear to be the favored approach of PE companies keen to push portfolio firms into new markets. That’s because it’s challenging to facilitate organic growth via greenfield expansion projects in a roughly two to five year timeframe. Also, other forms of international expansion, such as joint ventures, frequently complicate both PE firms’ ability to control the day-to-day operation of portfolio company’s business and the process of exiting an investment.

Expanding via M&A does not come without challenges. Firms may find it difficult to navigate complex accounting, regulatory and compliance rules associated with new markets, according to attendees at the Capital Roundtable event. Also, they have difficulty identifying managerial talent in foreign countries, despite the emergence of new sources of talent in recent years.

Growing a portfolio company’s footprint beyond the US’ borders can be worthwhile, particularly for PE firms with the time facilitate long-term growth. But the expansion process is not without its pitfalls.

On Thursday 10 November, IIICORP and The Capital Roundtable will be hosting a conference entitled “Best Practices for PE Portfolio Companies to do Business Globally”.

 

Visit our newly-released website for more information on IIICorp’s deal origination platform. For more information on a trial, visit https://www.iiicorp.com/ContactUs

IIICorp Opportunity of the Week: Andhra Pradesh in talks with Chinese firms for partnership in its proposed USD 16bn hydrocarbon complex

The State Government of Andhra Pradesh(AP) is in talks with Chinese partners for a potential partnership to develop its proposed USD 16bn cracker complex in the port town of Machilipatnam.

“We had a Chinese delegation representing a potential consortium partner inspecting the land proposed for the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR),” said CHSS Prasad, Chief General Manager (Projects), Andhra Pradesh Industrial Infrastructure Corporation (APIIC). APIIC is the nodal agency implementing the project along with Vishakhaptnam Development Authority and the industries department of the AP state government. He however declined to share further details of the potential partner, citing confidentiality.

The plan is to put together a consortium of state-owned oil companies, exploration firm Oil and Natural Gas Corporation Limited (ONGC) along with private global players who have expertise in developing a facility of this magnitude. This news service had earlier reported that Dubai-based Al Kharash Contracting Co was one of those global players that had showed initial interest.

In a cracker complex of this scale, the refinery, or the mother cracker, creates raw material or feedstock for several chemical-making units, where the end-user industries involve polymers and pharmaceuticals, among others. Once completed, this will be India’s largest cracker unit with a capacity of 10 million metric tons per annum (MMTPA).

An industry source said a mother cracker complex of this size will open up opportunities to equipment suppliers from developed markets in the US and Europe. According to a previous working paper published by the Indian Council for Research on International Economic Relations (ICRIER), India currently has three naphtha-based, three gas-based, and one mixed-feed cracker units with a combined ethylene capacity of 3.3MMTPA.

The major feedstock used in petrochemical units is naphtha and natural gas (propane and butane), while the major intermediate products produced in the country are ethylene, propylene, butadiene, benzene, toluene and xylene, which are used in a variety of industries.

 

Each week, we share one of the thousands of opportunities, deals, and projects in our database. Our global team of journalists, engineers, analysts and researchers constantly publish new stories using innovative model of actionable intelligence, presented in a comprehensive database of past and upcoming projects, tenders, partnerships, trade finance and M&A opportunities. Subscribers gain access to a proprietary data set containing the terms, values, and contacts on deals updated in real time. 

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Upcoming ICorp Events and Conferences

The ICorp team have been on the road recently, from Singapore, to Miami, to Rome, to Philadelphia. Our founder and CEO, Charlie Welsh, had the opportunity to speak as a panelist at the Association of Trade & Forfaiting in the Americas annual gathering (pictured below). We also recently attended the Special Libraries Association Conference and TXF Conference at the Four Seasons Rome. These have provided valuable forums  for sharing insight with our peers and colleagues. We’re proud to have the opportunity to showcase our product, the world’s first foreign industrial equipment supplier funding origination platform.

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ICorp will be attending and exhibiting at several conferences, expos and events in the coming weeks, so please be sure to visit our blog, homepage and Linkedin page for regular updates.

In the next month, find us at:

June 23-26      American Library Association Conference – Orlando, Florida

July 13-15         Business Librarians Association Conference – London, UK

July 16-19        American Association of Law Libraries Annual Conference – Chicago, Illinois

Are you attending or exhibiting at any of these? Be sure to connect with us on Linkedin or send us your details via our webform.