Metito was founded in 1958 by Lebanese entrepreneur Farouk Ghandour and became the first specialist water and wastewater treatment company in the Middle East. His brother, Mutaz Ghandour, the company’s chief executive officer, joined him later. This year, the company will celebrate 50 years in the water industry.
The outbreak of civil war forced Metito to leave Lebanon in 1976 and establish a manufacturing facility in Houston. At the same time, the centre of its operations moved to the UK. In the late 1970s, Metito entered the Saudi market and set up a manufacturing facility.
Date established: 1958
Main business sectors: Desalination and water and wastewater treatment
Main business regions: Middle East and North Africa
Managing director: Fady Juez
The company grew to become one of the leading providers of reverse osmosis desalination technology in the region, focusing on the Saudi, Iraqi, Libyan and, to a lesser degree, Egyptian markets. At the same time, it began to expand into the wastewater treatment industry.
Metito is now headquartered in Dubai, with regional offices in Cairo and Jakarta. It is also has offices in Libya, Tunisia, Algeria, Sudan, Qatar, Bahrain, Saudi Arabia, Jordan and Houston.
The original company established by Ghandour today goes by the name of Metito Overseas and focuses on engineering, procurement and construction projects and services. In 2007, a new entity – Metito Utilities – was set up to handle concession and utilities contracts. Both parts of the business are now owned by Metito Holdings.
Up until a year-and-a-half ago, Metito Holdings was a family-owned business. In November 2006, Abu Dhabi-based private equity group Gulf Capital bought a 60 per cent stake in the business. Then in September 2007, the group sold a 7.4 per cent stake to the International Finance Company (IFC), the private sector arm of the World Bank.
Metito designs and supplies water and wastewater treatment and desalination technology, and the water it produces is used for both human consumption and industry. Its clients include government departments and agencies, municipalities and companies in the oil, petrochemicals, food and beverage, and textile industries.
“We are one of a few companies in the water business that is multinational and covers the full spectrum of business from clean to dirty water,” says Fady Juez, managing director of Metito.
Although its origins lie in the desalination business, today the company says its attention is divided equally between desalination and wastewater treatment.
“It depends on the country, but I would say it is a 50:50 ratio,” says Juez. “It depends on what stage of development a country is at. If it is not very developed, the focus is on water. As industry develops, the focus on wastewater grows.”
So far, the firm has specialised in medium-sized projects, relying on partnerships with other companies when approaching larger schemes. Metito joined forces with South Korea’s Daewoo Engineering & Construction to submit a bid for the 243,000 cubic-metre-a-day (cm/d) Doha North sewage treatment plant project. It also partnered with Singapore’s Sembawang to bid for the 200,000-cm/d Jumeirah Golf Estates sewage treatment plant. In both cases, however, the contracts were awarded to other companies.
While some attempts to enter the larger project market have failed, this has not deterred Metito from planning big.
“This year, Metito is heading for a $330m turnover,” says Juez. “We are aiming for $500m in one-and-a-half to two years. And that will complete our first five-year plan. After that, if business stays as it is and the dollar value of oil remains high , it is not far-fetched to say that we will become a $1bn company.”
The firm is also aiming for an initial public offering in the next two to three years. According to Juez, it would ideally list in the UAE, but is leaving its options open.
Before this happens, the company would like to expand its operations. It is working to secure contracts valued at more than AED150m ($40m).
“Our strategy is to grow our regular business by double digits,” says Juez. “But we also anticipate huge growth from the utility business as governments start inviting more private sector involvement.”
The company also plans to improve its geographic coverage by strengthening its position in North Africa and expanding into all of the Gulf states, including Iraq.
“Metito was historically a market leader in Iraq,” says Juez. “As a brand, we are very well respected there, but because of the political situation, we will only be supplying the plants from overseas.”
Metito has a strong history and track record in the region. Nevertheless, it is still a relatively small player in the water and wastewater market. So far, it has succeeded in winning mainly small-to-medium-sized projects. Larger contracts continue to elude the firm.
Metito is confident that it has the technology and financial strength to expand and vary its portfolio, while maintaining the niche it has established for itself in the market. It is also acutely aware of that fact that strong partnerships will be key to winning larger projects.
The company has traditionally focused on engineering, procurement and construction contracting, and operation and maintenance work. To capitalise on the opportunities presented by privatisation in the region, Metito has adopted a holding company structure and set up Metito Utilities to focus solely on build-operate-transfer and concession projects. Selling off its assets will also give the company the financial base to expand its operations.
Q&A Fady Juez, managing director
How can you compete with bigger players such as Belgium’s Suez Energy International, or France’s Veolia and Sidem?
The first thing that comes to mind is, why not? We have the history, the knowledge and excellent engineers. We are one of the top companies in the world when it comes to water.
Targeting larger projects is all about putting on more financial muscle and more equity. We believe in partnerships for growth. We have partnered with Gulf Capital and International Finance Corporation of the World Bank.
Would you partner with these major international companies?
Nothing prevents Metito from partnering with anybody. We believe that 50 per cent of 100 is better than 100 per cent of 50. Partnering allows you to distribute risk, increase profit, open your horizons and train your people.
What are the main challenges you will face?
We are growing at a very fast pace. We need the right infrastructure to support that growth. People remain a big challenge. We need to work hard to find good people and retain them. If we do not grow, we die.
The trend in the region is towards private sector involvement in the water and wastewater sectors. Are you considering entering the independent water and power project (IWPP) or independent water project (IWP) markets?
We would need a partner
for the power element in an IWPP. Also, they tend to be very large. We will participate in a number of large engineering, procurement and construction desalination plants, which are as large as an IWPP.
We have better chances in focusing on standalone desalination or sewage treatment plants. If we are very busy without them [IWPPs and IWPs], then we would rather enjoy our type of work and profitable growth. But down the line, we will have to participate.
Metito specialises in reverse osmosis (RO) technology for desalination. You do not offer thermal desalination, is this a disadvantage?
RO is the new, growing technology. Apart from the Gulf and the Red Sea, all over the world, there is nothing but RO. Because the waters are aggressive, without pre-treatment, there may be difficulty with RO.
Traditionally these countries had to use desalination technology from the 1950s. The engineers and consultants got accustomed to this type of desalination. Other countries have started with new technology. We have a huge number of plants using RO in this part of the world, but they are not 50 or 100 million-gallon-a-day plants. Most of the new plants will be hybrids.
What is the future of wastewater treatment in the region, and what is Metito’s role in it?
Wastewater [treatment] is getting more and more attention. We have a strong track record of success and aim to be involved in more partnerships to achieve water quality goals.
How can the Middle East better manage its water resources?
People should start understanding the real cost of water. The population in this part of the world needs to realise the cost of getting water to their homes. There is always room for improvement.
For example, per capita water consumption can be reduced. With growing populations and increasing industrial activity, reduction in water demand will be necessary.
Does this mean water tariffs should be raised by governments?
Water conservation campaigns play a big role in educating the public about the actual cost of water and the water scarcity
we are facing in the near future. However, raising water tariffs plays an important role in recovering a significant portion of the costs of service delivery from people.
If governments do not want people to pay more, then they should at least make them aware of the actual cost of water. Governments should at least send a bill saying the actual cost is, for example, AED1,000, but your bill is AED5.