ABB South Africa hopes to ride cogeneration boom

Power and automation technology group ABB South Africa CEO Carlos Poñe said that he expected future demand to be driven by newcomers to power generation in light of the country's electricity crisis

Many large industrial consumers were considering the option of cogeneration, and he expected that there would be an increase in the number of generation plants coming out of the private sector.

A power purchase price agreement with State-owned utility Eskom was, however, still to be finalised, and this would influence companies' cogeneration investment decisions.

ABB's growth going forward was also expected to be driven by demand from the troubled utility's expansion programme, municipalities replacing aging electrical infrastructure, industry customers requiring energy-efficient technologies and expansion in the mining and industrial sector, which Poñe noted was progressing despite setbacks from power supply problems.

It was capacity investment in the mining and industrial sectors that pushed ABB's order book to R4,6-million for the year ended December, 2007. This was a record high for the company, reflecting an increase of 28% from the previous year.

Revenue also reached a new high in the company's 30 years of operation in South Africa, rising 30% to R3,4-billion.

Turning to the company's divisions, automation products business' growth was attributed to increased demand from the power generation industry for control and instrumentation products, continued growth in the construction industry, and substantial export orders for medium-voltage electric motors and power electronics equipment.

Process automation benefited from expansion in the mining sector. Poñe overviewed some of ABB's significant automation technologies projects which included a R140-million winders order for Impala Platinum mine, an upgrade of the Sappi Saiccor cellulose plant which involves complete electrification - worth R224-million - and a R102-million rectifier order for Nicanor in the Democratic Republic of Congo.

ABB Powertech Transformers divestment

The disposal of ABB's 50% stake in its joint venture with Powertech - ABB Powertech Transformers - was currently awaiting approval from the Competition Commission.

Poñe said that the company was expecting to receive a report from the authority "in the next month or so".
The disposal of ABB's shares in the JV company was announced last year. To facilitate the inclusion of an empowerment partner ABB sold its 50% stake to Powertech, which agreed to sell a 25,1% shareholding to black economic-empowerment investors.