x Abu Dhabi, UAEWednesday 26 July 2017

Saudi project gives Doosan Heavy big lift

What's Up: Shares in South Korea's biggest maker of power equipment jumped the most in almost six months after winning its largest order since February.

Doosan Heavy Industries and Construction, South Korea's biggest maker of power equipment, jumped the most in almost six months after winning its largest order since February.

It rose 3.9 per cent to 43,650 won at the close of trading in Seoul, the biggest gain since May 24. The 1.1 trillion won order to build a desalination plant in Saudi Arabia is the single largest contract the company has won in nine months.

"News of the order has given a big boost to shares today," said Heu Moon Wook, an analyst at KB Investment & Securities in Seoul.

"Everyone has been waiting for Doosan Heavy to win more orders. The order outlook for desalination and power plants seem to be positive, two areas Doosan Heavy is quite good at."

Global demand to turn seawater to fresh water is expected to increase by 350 million gallons annually for the next five years, according to a presentation on the Doosan Heavy website.

That is expected to create opportunities to win more desalination plant orders, said the company.

Saline Water Conversion awarded Doosan Heavy the contract to build a desalination plant in Yanbu, 350km north of Jeddah, to produce 550,000 tonnes of fresh water a day, the company said. Construction is slated for completion by March 2016.

Doosan Heavy won 3.24tn won worth of contracts in the first nine months of this year, 50 per cent lower than a year earlier. It achieved only 30 per cent of its order target this year of 10.8tn won.

The company had an order backlog worth 19.62tn won at the end of September.

Saudi Arabia plans to spend 300 billion riyals on desalinated water projects over 20 years, Asharq Al-Awsat reported, citing Abdulrahman Al Ibrahim, the governor of Saline Water Conversion. The stock earlier surged up to 7.7 per cent.