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VA Tech WABAG to set up subsidiary in China

CHENNAI: VA Tech WABAG Limited, a leading name in the field of water treatment, has deepened its presence in China by setting up a fully-owned subsidiary in that country.

Though the Chennai-headquartered company has been present in China for the last 20 years, its presence has been limited to a representative office. In view of China emerging as a big economic power along with India, VA Tech has decided early this year to form an independent wholly-owned company there. Rajiv Mittal, Managing Director, told The Hindu that the Chinese subsidiary would focus on EPC (engineering, procurement and construction) projects in the area of water and sewage treatment.

In the last two decades, VA Tech has completed around 70 plants in China, helping the people get a secure water supply and environmentally-compatible wastewater disposal mechanism. Xiaohomen anaerobic sludge treatment plant, one of the largest of its types in China, and the BeiXiaoHe water reclamation plant with MBR (membrane bio-reactors) technology in Beijing were among the projects done by VA Tech WABAG in China.

The importance of China in the company’s global strategy could also be gauged by its decision to participate in this year’s Aquatech China, the country’s biggest water technology event which attracted the largest number of exhibitors and visitors. Mr. Mittal said the Chinese operations were run by around 30 people now.

Though the company had four independent business units, Mr. Mittal said the international and service businesses would be growth drivers for the company in the next few years. “These (international and services businesses) offer huge potential for us.

They will anchor our growth in the coming days,” he said. The other two units of the company were municipal and industrial, he added. Mr. Mittal said two-thirds of the company’s top and bottomline came from municipal business.

“The growth in this segment will not be rapid, however,” he said. He expected the business model in the municipal segment to undergo a change in the coming years with emphasis on ownership under the public-private partnership.

A professionally managed Indian multinational company with leadership position in India and significant presence in Central and Eastern Europe, North Africa, Middle East and Asia, VA Tech WABAG ended March 2009 with a consolidated revenue of Rs. 1,130 crore. It has a staff strength of 1,100.

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