Serba Dinamik to set up joint-venture plant in Tanzania
Bhd will set up and operate a chlor-alkali plant in Tanzania in partnership
with Junaco (T) Ltd (JTL).
The energy engineering
solutions provider, which has also adopted an asset ownership model for further
growth, said its wholly owned subsidiary Serba Dinamik International Ltd (SDIL)
had inked a joint-venture (JV) agreement with JTL to develop the chlorine skid
mounted chlor-alkali plant, which has a capacity of 45 tonnes per day, in
Mlandizi ward, Kibaha District’s coast region.
The plant is expected to
be developed on 15,787 square metres of industrial land in the Msufini area,
Serba Dinamik said in a filing with Bursa Malaysia yesterday.
JTL is a leading supplier
of water-related solutions supplying its products and services, mainly water
meters, water pumps, water treatment chemicals, pipes and fittings to water
utilities, manufacturers, re-sellers and non profit organisations.
The company is also
involved in the importation and installation of firefighting equipment for the
SDIL and JTL will, either
directly or through affiliates, form a special-purpose vehicle in Dubai, which
will ultimately hold 100% shareholding in the project.
SDIL will hold a 25%
stake in the JV company, to be named Msufini LLC. Msufini LLC will, in turn,
hold a 100% stake in Msufini Chlor Tanzania Ltd, which will be the direct owner
of the plant.
The JV agreement that was
signed last Friday sets out the understanding with regards to the project
pending the execution of the definitive agreements, which will include the
shareholders’ agreement; the engineering, procurement, construction and commissioning
(EPCC) contract; the operation and maintenance (O&M) agreement; deed of
adherence and any other agreements as may be determined by the parties.
Serba Dinamik will
provide structure local content provision in all aspects and phases of the JV
agreement, including sub-contractors, manpower, raw materials, consumables,
housing, fabrication, and installation.
JTL will, however, have
the first right of refusal to supply or subcontract such works where possible,
excluding original equipment, propriety technology, methodology and
SDIL will be the
appointed O&M contractor for a period of 10 years plus an additional five
years. A price agreement structure will be in place throughout the tenure of
the O&M agreement.
On the rationale for the JV
agreement, Serba Dinamik said it would create an opportunity for SDIL to secure
the EPCC contract, valued at US$69.8mil (RM295.4mil).
“Apart from the EPCC
contract and as part of the JV agreement, SDIL will be appointed as the O&M
operator… which will enable SDIL to benefit from a steady income flow in the
long term,” it said.
“In addition, as a
shareholder of the JV company, SDIL may also reap benefits in the form of
dividends and track record, being its first foray into Africa.”
Serba Dinamik said the JV
agreement is expected to be completed by the first quarter of next year,
Serba Dinamik first
launched its asset-management model with a compressed natural gas plant in
Muaro Jambi, Sumatra, in Indonesia.
Source: The Star