Water. desalination + reuse

water.d+r Sept 2016

Water. Desalination + reuse

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Israel's IDE Technologies has carved out a reputation as a leader in desalination globally, but the future shape of the business will depend a lot on who the new owner will be, if an agreement on price can be reached, and whether a sale of the company goes through this year. A v s h A l o m F e l b e r p r e s i d e n t A n d C e o , i d e t e C h n o l o g i e s A bove all, IDE is a solutions provider. So says chief executive Avshalom Felber, the former financial whizz turned water industry leader, as he outlines the company's unique mix of thermal and reverse osmosis (RO) technologies, operational expertise, and contractual nous. "We analyse markets by client orientation and technology. A municipal government buying potable water or an industrial client that wants to reuse water are totally different types of client. A totally different process, type of risks that they see, type of costs they want to avoid. Each one has its own set of criteria of what is best for him," says Felber. "This is how we cater to our clients. Start from their need and work backwards to the various technological solutions and contractual-based solutions, be it a water sale agreement, a plant build, or running operations for them. These are all different cocktails that each one wants to drink." Creating client-specific solutions rather than selling technologies has helped to establish IDE as a world leader in desalination, particularly for mega-size plants producing up to 650,000 m3/d of water. The company has won plaudits for its desalination plant in Carlsbad, California, and has constructed and operates some of the largest desalination plants in the world, including the largest in China, a 200,000 m3/d, multi-effect distillation plant in Tianjin. Felber believes that IDE is well placed to act on opportunities in the global mining, and oil and gas industries as they recover from a post-financial crisis slowdown, and to meet the rising demand for reuse from industrial and municipal clients; as well as continuing to improve much-needed desalination technologies for making potable water. Although so"ness in the global oil and gas and mining sectors has slowed the number of new desalination and reuse projects globally, the more significant effect of the downturn for IDE is that its joint owners, Delek Group and Israel Chemicals, are looking to focus on their core activities and to sell IDE, reportedly for between $700 million and $1 billion. Felber is taking it in his stride. "The process is ongo- ing and we are involved with some parties regarding this. Of course, eventually things will be decided by meeting the buyer's and seller's expectation on price. So it is never sure that this will actually end with the sale of IDE, but it's definitely the intention of the shareholders to sell the company because it's not core to either of them," he says. So far at least three companies have reportedly bid, including China Communications Construction Company, which offered $650 million in August. The due diligence process is ongoing, with final bids due in November and an ambition to sign a deal before the end of the year. One upside of a possible sale is that markets currently closed to IDE as an Israeli company may become accessible if it changes hands. "The countries that don't deal with Israeli companies represent 60 per cent of the global desalination market, so it's not a minor thing. If a non-Israeli entity is the new owner, it's important. Of course, this very much depends on how the technology and the activity will be digested into any international firm that might buy IDE, but if this actually goes through, it's not only an upside for the buyers, but in my opinion also a very large upside for clients that are missing out currently on the very best technology available because of political matters," Felber says. Clearly, while Felber squarely positions IDE as a solutions-based, client-focused business, the company's technology plays a huge part in its success. The business was — uniquely, he claims — able to transition during the mid-1990s from being solely a thermal desalination supplier to add reverse osmosis (RO) to its portfolio, and has gone on almost to halve energy consumption at its RO plants over the past 20 years. "Part of it is improvements in the industry, and part of it is the constant innovation that IDE brings into existing technologies, as we did in Hayman Island, Australia, where we consume 2.8 kilowatt hours per cubic metre, which was by far the lowest in the industry, by deploying very specific technologies that we developed for this purpose," Felber explains. The owners of the Mulpha Formerly Israel Ports and Railway Authority CFO, and deputy director of budgets at Israel's Ministry of Finance, Felber has steered IDE for 14 years Water. desalination + reuse September 2016 Interview 9

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