05:08 Dec 21, 2014  

Va Tech Wabag Ltd

HSL Code: VATECH   |   BSE Code: 533269  |   NSE Symbol: WABAG  |   ISIN: INE956G01038
1,533.50
32.05(2.13%)
19 Dec 2014 | 15:58
Prev Close (Rs.)
1,501.45
Open (Rs.)
1,495.05
High (Rs.)
1,546.00
Low (Rs.)
1,495.00
Volume
13,761
Week Avg. Volume
13,429
52Wk High - Low Range
504
1748
 
 



CHAIRMAN





Dear Shareholders,

I am pleased to present to you the 19th Annual Report of the Company.

The year 2013-14 was a successful year for your Company. The year saw your Company report its highest ever order intake in its history. The year also witnessed your Company performing on key parameters across geographies and delivering a good set of numbers yet again in a year marred by global uncertainties. During the year, your Company expanded its footprint into two new geographies by winning funded projects in Tanzania in Africa and Nepal in the Indian subcontinent. The perseverance of the Company in the North African markets was rewarded during the year in the form of two large industrial water treatment plant orders in Libya and two more in Tunisia and Eqgypt. Your Company s performance during the year in emerging markets culminated in winning the distinctive award of "Water Company of the Year" at the Global Water Summit held in Paris.

Another success story of the year was the performance of the new Multi Domestic Units. While the Philippines subsidiary bagged the largest STP order in the country and became one of the leading players in the water and waste water market in Philippines, Turkey continued to impress with a good order intake, turning positive during the year. The Company s continued focus and efforts in decentralising operations from a high-cost economy to low-cost emerging markets resulted in cost efficiency apart from being present closer to customers. WABAG Switzerland continues to enjoy the highest market share in the high-end technology market in that country. The Company took a strategic initiative in China to focus on the upgradation of plants and the supply of high-end technology business, which will be supported by the Switzerland MDU. The projects being executed by the other MDUs in Switzerland, Austria, Romania, Czech Republic and Tunisia are all progressing well.

The Municipal Business Group continued to be the growth engine of your Company. During the year, this unit won orders from various municipalities across the country. Notable projects included orders from municipal clients like Chennai Metro Water Supply & Sewerage Board, Odisha Water Supply & Sewerage Board and Bangalore Water Supply & Sewerage Board, besides international orders. I am of the opinion that the municipal and government sectors will continue to remain a key focus area of your Company as several initiatives are being taken up by various States to ensure efficient water governance. I also take this opportunity to appreciate the new government on

Structuring an innovative solution

WABAG, Cadagua SA (Spain) and Galfar Engineering and Contracting S.A.O.G. of Oman formed a joint venture company called International Water Treatment LLC in Oman. The JV is executing the EPC contract for a sizeable 191 MLD desalination project. This project will pave the way for potent, strategic growth, showcasing WABAG s ability to work in consortia with international members and delivering challenging projects across diverse global geographies.

Ganga Rejuvenation Scheme. With the creation of a separate Ministry for Water Resources and Ganga Rejuvenation, the government has set the focus in the right direction, which augurs well for your Company.

During the year under review the Industrial Water Group business unit continued to receive repeat orders from its key clients in the Oil and Gas sector. Due to the muted growth in other key industrial sectors like power, fertilisers and steel, this business unit took the conscious decision of venturing into foreign markets. The business unit won maiden orders from key overseas clients in Nigeria. According to a research report released earlier this year by a leading research house, the industrial sector is expected to drive growth in the Indian water and wastewater treatment market over the next five years and I am confident that this business unit possesses the requisite skill set to provide solutions for the complex water treatment requirements of various industries.

Desalination continues to be a key focus area for the Company. The setting up of WABAG Spain last year was to tap the global desalination market opportunities including Latam regions and I am confident that this MDU will drive the desalination growth engine of the Company in the years to come. The Company s flagship desalination project at Nemmeli, Chennai, achieved its full capacity production of 100 million litres per day (MLD) during the year, paving way for the commencement of a seven-year O&M period. The 191 MLD desalination plant project at Al Ghubra, Oman, is progressing well and is expected to be completed during the financial year of 2014-15. I am also proud to inform you that according to Global Water Intelligence, your Company emerged as one of the top ten Companies in global desalination market during the year.

The Company s Operation and Maintenance Business unit performed creditably during the year. The Company was able to gather clients in India and abroad. Currently your Company is operating more than 60 plants in India. Apart from being a high margin business, this unit provides stability and visibility due to its annuity revenue model. Going forward, this business unit will be focusing on the lucrative refurbishment and spares business.

Our solid reference base in India proved to be a valuable business development tool in fuelling our international ambitions, as it demonstrated that we are equally at home supplying large-scale turnkey treatment plants to customers across geographies. Also our robust technical background, coupled with competitive costs, positions us as a unique player in the global market.

An Ernst & Young (E&Y) study says that the Indian water sector could require an investment of around $130 billion between 2011 and 2030. Wastewater management, in particular, is emerging as a key thrust area. Currently, only 60% of industrial and 26% of domestic wastewater is treated in India. Metros and large cities are treating only about 30% while smaller cities treat a minuscule 3.7% of their wastewater. With a pan India presence, your Company is positioned to take advantage of these growing opportunities in the country. We expect to sustain our momentum, enhancing value for all our stakeholders in the years to come.

I would like to thank all our colleagues in India and around the world for their contribution to WABAG s success. I look forward to their continued support as we strive to make WABAG even stronger. I also take this opportunity to express my gratitude to all our stakeholders who have reposed trust in WABAG.

Best wishes,

BD Narang

Chairman

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