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Water Co Splashes into Shanghai

Shanghai Pudong Water Supply and Drainage Construction Engineering Co Ltd, the first water supply and discharge joint venture across China, officially started its business yesterday in the nation's economic hub.

 

Mainly engaged in general engineering contracting and professional water supply and discharge and pipelines, the venture has registered capital of 52 million yuan (US$6.27 million), among which the Water Affairs Assets Management Branch of Municipal Investment Company, Sande Branch of French Veolia Water Affairs Company, and Shanghai Pudong Veolia Water Corporation Ltd hold equity of 45, 45, and 10 per cent, respectively.

 

"The establishment of the joint venture shows our commitment to building up a strong brand in China's water supply and discharge industry," Ma Lei, spokesperson at the branch, told China Daily.

 

At the end of last year, the company offered public bidding for 45 per cent of its equity with a total value of 37 million yuan (US$4.46 million) at Shanghai United Assets and Equity Exchange.

 

This offer was aimed at attracting strategic investors from home and abroad to enhance the company's competitive edge, Ma explained.

 

As China maintains its current economic growth and more and more people migrate from rural areas to cities each year over the next 10 to 15 years, some 80 per cent share of the local water affairs market is expected to be obtained by more than 10 major groups around China, according to industry insiders.

 

"In view of the fierce competition, we are in urgent need to push forward equity reforms and set up a modern corporate system in the company," Ma added.

 

In March 2005, the company reached an agreement in terms of setting up the venture with its partners.

 

The French firm, the JV's major investor and one of the world's leading water service and sewage treatment companies, is a subsidiary of French Veolia Group, a global giant in industries including water affairs, energy, and environmental protection.

 

"We could learn a lot from Sande Branch of France Veolia Water Affairs Company including its advanced technology in water supply and discharge and well-developed corporate management skills." Ma said.

 

(China Daily July 21, 2005)

 

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