Suez eyes China waste, Asia expansion with Chonqqing deal

By Geert De Clercq PARIS (Reuters) - French environmental services company Suez said on Wednesday it aims to enlarge its Chinese water and waste business and is looking for opportunities outside China through a new partnership with the city of Chongqing. Suez and its longtime Chinese partner NWS Holdings have agreed with Chongqing Water Assets, owned by the western Chinese municipality of Chongqing, to create a new water and waste firm called Derun Environment, Suez said in a statement on Wednesday. Under the agreement, Chongqing Water Assets will bring into Derun a 36.6 percent stake in Chongqing Water Group - one of China's largest listed water groups with a market capitalization of $7.7 billion - and a 67 percent stake in Chongqing Sanfeng, which specializes in energy from waste. Suez and NWS will contribute to Derun their 13.44 percent stake in Chongqing Water Group and an unspecified amount of cash. As a result of the operation, Chongqing Water Assets will own 74.9 percent of Derun while Suez and NWS together will own 25.1 percent. "Suez and NWS now become the main private partners for Chongqing Water Assets," Suez head of international operations Marie-Ange Debon told Reuters. She added that while Suez's activities in China have been focused mainly on water, through Derun Suez will also become active in waste, which is its main activity in its French home market. "Derun will pursue its development in China, invest, make acquisitions and maybe even go outside China," Debon said. She said Derun's foreign investments could focus on South-East Asia, and possibly Australia, where Suez already has a sizeable presence. Africa could also be a possibility. "Derun will be a second pillar for us in China," she said. Debon said that its longtime partnership with NWS, with whom it has some 30 joint ventures in China going back 30 years, will continue. Hong Kong listed NWS is a diversified infrastructure company with a market value of $5.5 billion. Through its Sino French Water joint venture with NWS, Suez manages turnover of about 1 billion euros in water and provides water for about 14 million people. Suez and its larger French peer Veolia are the world's largest private international water and wastewater firms, serving populations of 118 million and 124 million respectively, of which 80-90 percent are abroad, according to Global Water Intelligence. (Reporting by Geert De Clercq, editing by William Hardy)