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CORRECTED-UPDATE 1-Suez mulls acquisitions in water treatment for oil and gas sector
April 10, 2014 / 4:51 PM / 4 years ago

CORRECTED-UPDATE 1-Suez mulls acquisitions in water treatment for oil and gas sector

(Corrects 8th para to say the company has about 500 mln euros this year for acquisitions, not per year)

By Geert De Clercq

PARIS, April 10 (Reuters) - French waste and water group Suez Environnement will combine self-generated growth with small- to medium-size acquisitions, notably in the treatment of waste water for the oil and gas industry, the company said on Thursday.

The company’s comments came after it said it had agreed to acquire a company called Mining and Industrial Labour Services (MAILS), which specialises in treating waste from gold mines in southwestern Australia. It gave no financial details.

Marie-Ange Debon, one of Suez’s four deputy chief executives and head of international operations, told a press briefing the group would look for acquisitions where it wanted to complete its technological expertise or geographical footprint.

Like its bigger French sector peer Veolia, Suez is trying to boost its business from industrial clients as margins shrink in its traditional municipal market.

Earlier this week Veolia said it expects revenue from treating waste water from the mining and metals industries to double to 1.5 billion euros by 2020.

Debon said the treatment of waste water in the oil and gas industry, a sector Suez has entered only recently, would be a particular area of focus.

“We have had good success in the upstream oil and gas sector and we will keep developing that business,” she said.

Suez has a budget of about 500 million euros ($694 million) this year for acquisitions, which will be focused on four areas: industrial water; material and energy recovery in waste; international development in countries like Brazil, India, Eastern Europe and the Mediterranean area; and the development of “smart water meters” for municipal and industrial clients.

The group expects the global market for industrial water to grow from about $15 billion in 2014 to $21 billion in 2018, with average growth of around 9 percent per year. It sees growth of 15 percent in the upstream oil and gas industry and 12 percent in the mining industry.

Last year Suez had sales of 570 million euros in industrial water out of a total 14.6 billion. It expects water use by industry to grow more than 80 percent by 2030.

Debon also said Suez’s waste and waste water treatment business in emerging markets is growing as regulation is not only being tightened but applied.

The company’s toxic waste incinerators in China for instance, which up to a few years ago were not fully used, are now working at capacity as authorities crack down dumping, she said. (Editing by David Holmes and Anthony Barker)

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