2010 in Review

2010 turned out to be a busy year for Befesa. The aluminum recycling business recovered over the year, with year-on-year growth exceeding 40 % on the back of the rallying automotive industry.

Although it has yet to replicate the volume of business reported prior to the onset of the economic crisis, the steel dust recycling business experienced sharp year-on-year growth over 2010 by making use of more installed production capacity at its plants due to the greater abundance and availability of raw materials. This in turn can be put down to the rallying European steel production industry. Moreover, the high prices that zinc fetched on international markets over 2010 (the listed price on the London Metal Exchange, or LME, averaged in the region of $2,100 per t of Zn-SHG - high grade zinc with minimum zinc content of 99.995 %) have had a positive economic impact on profits, despite being largely offset by the previously signed metal price hedge agreements.

  Control center at the SAIH (Automatic Hydrologic Information System) on the Guadalquivir River, Spain 

Last but not least, Befesa is a worldwide benchmark company in the field of water desalination, thanks to its chosen strategy over the last few years based on international expansion and consolidation. This has enabled the company to cement its position in the territories that offer the greatest growth potential in the water market, such as the United States, Latin America, North Africa, India and China, while affording it an unrivalled position from which to expand and improve upon its water treatment, irrigation, hydraulic construction and water management lines of business. Befesa currently has eight concessions for large-scale desalination plants. These concessions are located in Algeria (Honaine and Tenes, 200,000 m3/day, and Skikda, 100,000 m³/day), India (Chennai, 100,000 m^3/day), China (Qingdao, 100,000 m³/day), Tunisia (Djerba, 50,000 m³/day), and three more in Spain (Cartagena, 65,000 m³/day, Almeria,50,000 m³/day, and Bajo Almanzora, 60,000 m³/day).
Control center at the SAIH (Automatic Hydrologic Information System) on the Guadalquivir River, Spain

Befesa secured its presence in the Turkish steel dust recycling market at the end of September 2010 by signing a joint venture agreement with the Canadian company Silvermet Inc. to acquire a 51 % stake in the Waelz plant owned by the latter in Iskenderun (Turkey). The investment was channeled through the company Befesa Silvermet Turkey SL and required a total outlay of $10 M, most of which will be used to develop new technologies to treat electric arc furnace steel dust, the ultimate aim being to drive forward the company’s steel dust recycling business in the country. This venture has allowed Befesa to gain rapid entry into Turkey, a strategic market and one of the world’s main producers of electric arc furnace steel. It is also one of the emerging markets promising the greatest potential in terms of future growth within the sector.

Befesa continued work over 2010 to fully integrate its German salt slag treatment plants, which were acquired mid-2009, into the organizational structure and to implement Befesa’s joint management systems. This has enabled the company to treat an additional 240,000 t of waste, thereby returning to the industry a similar volume of secondary raw materials. Furthermore, Befesa’s plant in the United Kingdom is now a fully operating waste treatment plant for the waste generated from used primary aluminum electrolytic cells (otherwise known as spent potlining, or SPL).

The prestigious international publication Global Water Intelligence (GWI) staged its annual Global Water Awards ceremony at the start of 2010 to recognize and reward excellence within the international water industry. Befesa was awarded the “Best Project of 2009” distinction for its Qingdao desalination plant, which is currently under construction in northern China. In addition to being the first desalination facility constructed through project finance and fully financed by local Chinese banks, the plant is set to become a groundbreaking project for the supply of desalinated water in the country. Investment in the plant amounts to €135 M, and encompasses the design, construction and 25-year operation of the plant. The facility will be capable of desalinating 100,000 m3/day of water, enough to supply drinking water to a population of 500,000 people. The plant will employ cutting-edge reverse osmosis technology, both for the pretreatment stage (ultrafiltration membranes) and also the centralized pumping system, all of which will result in enhanced energy efficiency.

The year 2010 also saw Befesa consolidate its international standing within the desalination sector. On the one hand, the company secured several important contracts in a number of different territories, such as the Djerba desalination plant (Tunisia) and work to expand the Brasov and Videle treatment plants (Romania), while on the other it started up commercial operations at the Skikda (Algeria) and Chennai (India) desalination plants and completed construction on the Honaine desalination plant (Algeria).

Towards the close of 2010, the company reached an agreement to sell its water engineering, procurement and construction (EPC) business line to Abeinsa.Following completion of the deal, which tookplace on January 1, 2011, Befesa is now responsible for promoting, developing and operating water generation plants and for handling the associated technology and R&D+i, while Abeinsa is now charged with full EPC performance of such projects. The arrangement has enabled Befesa to focus its attention on promoting, developing and operating water generation assets, a field in which technology plays a pivotal role. The water market offers enormous growth potential, particularly in North Africa, Southeast Asia and the United States. Befesa intend to channel this line of business through the company Befesa Water, a truly international company employing close to 400 workers boasting operations on four different continents.