Marubeni to spend $297m to double water assets
TOKYO: Marubeni Corp., the Japanese owner of Chile's third-biggest water company, will spend 25 billion yen ($297 million) to double the size of its international water assets in two years.
Marubeni, based in Tokyo, plans to buy water-service companies in Southeast Asia, Australia and the Middle East as well as add to assets in Chile and China to double the number of people it supplies to 10 million by March 2013, said Yoji Ibuki, head of Marubeni's environment infrastructure unit.
The company this month completed a 40 billion yen acquisition of Aguas Nuevas SA of Chile and the proposed investments will propel the company into the top 10 global water providers, Ibuki said. Veolia Environment SA and Suez Environment Co. of France and Spain's Sociedad General de Aguas de Barcelona SA, the three largest water companies, supply services to about 300 million people, according to Marubeni.
"Water and infrastructure projects are preferred businesses for Japanese trading houses since the government traditionally helps with a large portion of the investment," said Yasuhiro Narita, a Tokyobased analyst at Nomura Securities Co. "To clinch bigger, more attractive water deals, it's good for Marubeni to chalk up a track record."
Marubeni's shares rose 1.2 percent to close at 575 yen today on the Tokyo Stock Exchange, the highest since April 21, outpacing a 0.2 percent gain in the benchmark Nikkei 225 Stock Average. The stock has gained 13 percent this year in contrast to a 2.2 percent decline in Nikkei 225.
Marubeni and its Beijing unit hold a 30 percent stake in a sewage treatment company in Anhui province, eastern China, which also operates units in Guangdong, Jiangsu and Hunan provinces. Marubeni plans to expand its business in Southeast Asia through the Chinese venture, Ibuki said.
Asian countries the company wants to invest in include China, Thailand, the Philippines and Indonesia, Ibuki said in an interview on Dec. 10 in Tokyo.
French companies are also expanding in China. Suez Chief Executive Officer JeanLouis Chaussade said in June his company, which earns 80 percent of its revenue from Europe, would pursue joint ventures in China.
In Marubeni's latest deal in Chile, the trading house and Innovation Network Corporation of Japan, a government-backed investment fund, bought Aguas Nuevas from a unit of Banco Santander SA. Acquired assets include 33 water purification facilities such as desalination plants and 39 sewage farms, Marubeni said. -Bloomberg