On 19 December 2016, Hitachi Zosen Corporation (Hitz) announced the acquisition of a 70% stake in Australia- based water treatment player Osmoflo Ltd. from Marubeni Water Australia Pty Ltd, which will retain a 30% stake in the firm.
Osmoflo grew as a provider of mid to small-size reverse osmosis (RO) desalination systems for industrial firms gaining a strong position in Australia’s water-stressed industrial segments. Most recently, the slowdown of the global mining sector and a lack of more stringent wastewater regulation, severely impacted Osmoflo’s order book.
Hitachi Zosen has supplied desalination systems since the 1980s. The firm’s strong experience as a power generation EPC player enabled it to build a desalination position in Oman, Qatar, Saudi Arabia, and the UAE , but it has gained less traction with its reverse osomosis solution.
A convergence of factors slowed the desalination market in the past two years including lower energy prices, lower commodities prices, and financial restructuring in key markets such as Saudi Arabia. 2017 shows early signs of a market picking up, including renewed infrastructure commitments and public-private partnerships.
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Bluefield Takeaways
- Hitz finalizing new management plan targeting integrated, higher tech solutions in desalination.
- Osmoflo adds new look to Hitz desalination business.
- High time for RO player consolidation.
