The Straits Times / The Business Times News on Hyflux

Hyflux partners with US water firm

WATER-TREATMENT specialist Hyflux will be teaming up with major American residential water manufacturer Marmon Water to invest up to $80 million in two ventures, including a manufacturing plant in China.

The first joint-venture company, which will be equally owned by both companies, will invest up to $50 million in Singapore over the next five years in R&D for residential and commercial water-treatment products.

The manufacturing company will also be set up in Jiangsu, China, to manufacture residential water-treatment and filter products for the global market, including China.

This venture, which will be 49 per cent owned by Hyflux and 51 per cent by Marmon, will invest up to $30 million over the next few years. Production is expected to begin in the second half of the year.

The two companies have also entered into licensing agreements for 20 years which complement each other's product offerings.

Marmon has exclusively licensed to Hyflux stainless steel membranes, used in high pressure and temperature industrial applications, which Hyflux will manufacture in Singapore and sell in Asia. Marmon has also licensed to Hyflux its media used to purify liquid streams in pharmaceutical, food and beverage applications.

In return, Hyflux has exclusively licensed its range of hollow fibre membranes to Marmon for sale and manufacture in North America.

Hyflux chief executive Olivia Lum said that 'consumer products will form a very significant part of Hyflux's revenue' in future. Ms Lum also said that the projects will be funded through equity and licence fees and that Hyflux will 'look to the government' for a grant for its R&D initiative. She expects the manufacturing joint venture to break even this year.

Marmon president John Goody said yesterday that both companies were a 'great fit' for each other as Marmon has strong technology in the residential and industrial water areas focused on ion exchange and carbon while Hyflux's expertise is focused in the membrane field.

Hyflux said the arrangements are not expected to have a significant impact on its earnings for the financial year ending Dec 31, 2007. Its shares fell six cents to close at $2.67.

Minister of State for Trade and Industry Lee Yi Shyan said last year the Research, Innovation and Enterprise Council set aside $330 million over five years to boost R&D in new water technologies.