ABB South Africa, a subsidiary of the global power and automation group, has reported a 36% jump in orders to R4.3bn in the year to December. These comprise mainly "large" equipment orders in the solar, motors and generators segments over the past six months.
The group, which released its year-end results on Thursday, said revenue was up 2% to R3.5bn. South Africa represented 80% of this turnover.
Cross-border projects accounted for 20% and were mainly in Mozambique, Democratic Republic of Congo, Kenya and Botswana.
South Africa and southern Africa experienced continued demand for power infrastructure projects. These included contracts from Eskom, South African municipalities, and the oil and gas industries.
Orders for solar-related equipment were to be fulfilled this year and in early 2014. The order book backlog for the group was 18% higher than the prior year at R4.1bn, signifying momentum in long-term contracts to utilities and mines.
Then there were engineering, procurement and construction contracts for refurbished, power-efficient motors for Eskom’s older power plants.
Departing ABB CEO Carlos Pone said on Thursday that solar projects in South Africa, as part of the country’s renewable energy plan, drove the order growth. The company further supplied products worth about R40m for wind power projects.
"Eskom will have to build more power plants … and customers will need new products that are more energy efficient," Mr Pone said.
Independent power producers in the renewable energy industry were another likely source of new business for ABB.
"That area is very positive for us," Mr Pone said.
In December, ABB won orders of $225m to supply two turnkey photovoltaic power plants in Limpopo. These were at the Witkop and Soutpan solar parks, close to Polokwane.
The parks would generate 33MW and 31MW respectively and would be among the first utility scale photovoltaic power plants to be built in phase one of the government’s long-term renewable energy programme. This aimed to reduce pollution and diversify South Africa’s energy mix.
In Mozambique, coal projects involving some of the world’s biggest miners and new equipment orders for supplying electricity to South Africa from the Cahora Bassa hydroelectric scheme helped drive the results. The Congo was a customer for power infrastructure and the electronics that controlled this.
New ABB CEO Leon Viljoen, who started work at the beginning of this month, said the global group strategy was to grow further in subequatorial Africa through ABB, while the Egypt offices would look after northern Africa. "There are definitely growth opportunities in our industry."
Mr Viljoen further said the group was continuing to look for contracts in South Africa’s massive railway upgrade programme. This was despite the Passenger Rail Agency of South Africa having recently awarded a R51bn contract to Gibela Rail Transportation, a consortium comprising French multinational Alstom and domestic engineering company Actom.
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