May 9, 2007, 2:11 GMT
Singapore - Water-treatment group Hyflux is joining forces with a Saudi Arabian firm to enter the used-oil business in the Gulf kingdom, executives said Wednesday.
Hyflux and the Saudi Economic and Development Company (Sedco) will each buy a stake in Lube Oil Re-refining Company (Lubrec), a used-oil collector and recycler that runs a plant in Jeddah.
Singapore-based Hyflux, well known for its work with water recycling, is seeking a bigger presence in the Middle East, said chief executive Olivia Lum.
Under the deal signed Tuesday, Hyflux and Sedco will each hold a 41.5 per cent stake. Lubrec will own the rest. The three will invest 45 million Singapore dollars (29.6 million US dollars) to upgrade and run the existing plant.
The first phase, to be ready in the first half of 2008, will allow the plant to process 24,000 tonnes of lube oil or lubricants. This will be doubled in the second phase.
The firms said there are ready markets given continued lube-oil shortages in the Middle East, North Africa and South Asia.
'Being in one of the largest lube-oil markets in the world will help us in all of our lube-oil businesses elsewhere,' The Straits Times quoted Hyflux chief investment officer Sam Ong as saying.
Sedco said it plans to expand the used-oil recycling business in partnership with Hyflux to selected markets in the Middle East and North Africa.
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