The Straits Times / The Business Times News on Hyflux

Hyflux makes big push into consumer business

HYFLUX, best known for treating water for industrial use, is splashing out big on its smaller consumer business with plans to market top-notch drinking water to Asian households.

Hyflux is teaming up with United States giant Marmon Water to set up a $50 million research and development (R&D) facility here, and a factory in China.

Hyflux chief executive Olivia Lum said the home consumer market is 'exciting'. The firm already has such a division - selling pitchers which filter water at home for example - which broke even last year. But there is more to come.

Speaking at a press conference unveiling the tie-up, Ms Lum said that it is a fragmented market. 'There are lots of companies for home products and...we want to be the leader in this field and Marmon is a leader in the field. We believe that this will form a very significant part of Hyflux's revenue.'

Hyflux said the two companies will invest up to $50 million in an R&D centre here over five years. It will employ up to 50 researchers. Their task is 'to develop new products to provide clean, filtered and softened water for Asian homes', added Ms Lum.

The two groups will also operate a plant in China's Jiangsu province to manufacture residential water treatment and filter products for the global market, including China.

Marmon president John Goody said it was a good fit: 'Marmon Water is very strong in residential water treatment. Hyflux's main strength is in industrial water and membranes.'

The manufacturing joint venture will be owned 49 per cent by Hyflux and 51 per cent by Marmon. They will jointly invest up to $30 million. Ms Lum said production will begin in the second half of this year and that it is likely to break even this year.

Mr Goody said: 'We have superior products but we can't sell them in China.' For example, these products may not fit in Chinese homes and the pricing is too high.

The manufacturing collaboration will use the technology to produce products tailored to the China and wider Asian markets.

A third aspect of their co-operation will be 20-year licensing agreements, which will let Marmon make and sell Hyflux's membranes in North America. Ms Lum said that will 'open up a whole new market for us'.

Mr Goody said that he chose Hyflux and Singapore because of their strong commitment to developing the water industry.

Minister of State for Trade and Industry Lee Yi Shyan, the guest of honour yesterday, spoke of the business development opportunities for Singapore companies - with the Chinese government planning to spend US$125 billion (S$192 billion) by 2010 to build waste-water treatment plants and upgrade systems.