Alstom and Arabian Bemco Contracting Co. Ltd have signed an agreement to create a joint venture company, Alstom Arabia Power Factory, which will establish a manufacturing facility in Saudi Arabia for power generation components, primarily heat recovery steam generators which are used in combined cycle and cogeneration applications to increase thermal cycle efficiency and minimize fuel consumption.
In the second phase, the partners envision expanding the scope of the factory to manufacture other power generation equipment.
The initial investment will be worth about $67 million. This operation reflects Alstom's ongoing commitment to its industrial presence in KSA and offers strong market opportunities across the Middle East. The factory will be located in King Abdullah Economic City, North of Jeddah, and will train and employ more than 500 Saudi nationals.
With more than 750 HRSGs installed globally Alstom is a world leader in the engineering and supply of HRSGs for all gas turbine types, while Arabian Bemco is an experienced turnkey contractor and local manufacturer within KSA. The two companies have already successfully worked together, including on the Riyadh PP12 steam-tail project bid, which was secured last year.
The joint venture will be a limited liability company incorporated under the laws of KSA with a registered office in Jeddah. Both Alstom and Arabian Bemco will take a 50 percent stake.
Following technology transfer, the JV will be the exclusive licensee of Alstom HRSG technology in KSA. It will afford Alstom and Arabian Bemco a strong local base across the Middle Eastern region, which represents around 25 percent of the global market.
In addition to the Saudi market, this facility will also cover key territories such as Iraq, Bahrain, Kuwait, Qatar, Oman, United Arab Emirates, Yemen, Jordan, Syria, Lebanon and Egypt.