WHAUP to Dominate Utility Business by Acquiring 34% Stake in Hanoi’s Major Water Supplier

WHA Utilities and Power Public Company Limited (WHAUP) notified the Stock Exchange of Thailand on 8 August 2019 that its Board of Directors approved WHAUP (SG) 2DR PTE. LTD. (WUPSD), its wholly-owned subsidiary, to enter into the Share Purchase Agreement of Duong River Surface Water Plant Joint Stocks Company (SDWTP) to acquire 34% stake for the total value of approximately THB 2,762.96 million.

 

Duong River Surface Water Plant JSC (SDWTP) is a water supplier in Hanoi, Vietnam, with a current capacity of 54,750,000 cubic meters per year and is under construction to increase capacity to 109,500,000 cubic meters per year, planning to the commercial operation in the 2H 2019. It is anticipated that utility business in Vietnam has significant growth potential, due to the country’s good economic growth, growing urbanization, and the government’s policy to promote water accessibility.

 

Based on the General Statistics Office of Vietnam, Hanoi’s population is approximately 7.8 million in 2018 and is expected to reach 9 million by 2025. Currently, Hanoi’s clean water supply capacity is just over 401,500,000 cubic meters per year (including SDWTP) whereas the average of clean water demand in Hanoi is 547,500,000 cubic meters per year. According to VIWASE’s research, the average of clean water demand in Hanoi is expected to reach 985,500,000 cubic meters per year in 2030.

Regarding the accessibility of Hanoi’s population to the treated surface water, Ministry of Natural Resources and Environment reported that, in 2018 only 31% of Hanoi’s population had access to the treated surface water and will be increased to 100% in 2050. The authority also aims to shut down the groundwater plants, which is now accounts for 69% of total clean water supply in Hanoi over the next decade.

In 2018, WHAUP and its subsidiaries have 17 industrial water production plants and 13 wastewater treatment facilities located in 9 industrial estates. The total utilities sale and management volume reached 105,000,000 cubic meters per year.

Previously in 2019, WHAUP has invested in the utility business in WHA Industrial Zone 1 – Nghe An in Vietnam. Such projects are under construction and expect to start commercial operation by the third quarter of 2019. Early this year, WHAUP also invested in Cua Lo Water Supply Joint Stock Company, a water supplier, also in Nghe An province, with a current capacity of 4,745,000  cubic meters per year.