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 Tanzanian market.
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 installation.
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