Imtech bids in the big time

Imtech Process has achieved a lot in the past three years, and is now bidding for some prime contracts in the water industry. WET News spoke to Duncan Wildgoose, the firm's business development manager, about the secret of Imtech's success.

"We've come a long way in three years," says Duncan Wildgoose, business development manager at Imtech Process. What he is referring to is the fact that the company is now firmly on the map when it comes to tendering for large contracts in the water industry. This is borne out by two projects the company is currently bidding for.

One of these projects concerns Thames Water's Tideway Tunnel scheme, which, during heavy rainfall, will capture wastewater flows and transfer if to a wastewater treatment works (WwTW) for full treatment.

Imtech Process is one of two companies bidding for the £180M upgrade to Crossness WwTW that is included in the Tideway project.

The facility is one of two WwTWs in east London - Crossness is south of the Thames, while Beckton is to the north. The bid is in conjunction with Laing O'Rourke, as part of a joint venture.

Wildgoose says: "The chances of us doing that sort of scheme three years ago, before we were part of Imtech, would have been negligible. We just wouldn't have been big enough - and wouldn't have been considered.

"To be bidding for a £180M project, admittedly as part of a joint venture, is a massive step.

"Crossness was released at the same time as a large scheme at Mogden - we decided to just bid for Crossness. Other contractors are bidding for Mogden, or both projects."
He expects Thames to make a decision towards the end of this year. "There's a long way to go yet, but it's very exciting."

The company became part of Imtech in 2003, when the Dutch group bought the Meica Group.

Meica comprised two companies - Meica Process and M&E contractor Meica Services, which primarily operates within the M25 and the London area. Its turnover back then was about £60M, with the process side accounting for a third of total revenue. Imtech Process's turnover last year was £42M. The target for this year is £55M.

Wildgoose says: "We're easily going to hit that. That's quite a rapid growth." In May 2007, the company began rebranding Meica Process as Imtech Process. Meica Services followed in December, when it became Imtech Meica. The two companies form part of Imtech UK.

The company carried out customer research last year about the rebranding, and the main message to emerge was: "What's taken you so long?" Customers knew Meica was part of Imtech and were happy with the change, as long they could still deal with their key contacts at the company.

Wildgoose says that coming under the Imtech umbrella has meant a significant change in terms of how people perceive the business. "The fundamental issue is that we have a big parent company behind us in terms of bank balance - we were just the Meica Group with a £60M turnover, now we're talking a business of three billion euros annually.

"It has given us the opportunity to pursue much larger projects."

Key clients
Imtech Process works entirely in the water sector - 95% of its revenue is water-related.

Over the years, it has worked with United Utilities, Northumbrian Water, Yorkshire Water, Severn Trent Water, Anglian Water, Southern Water, Wessex Water and Welsh Water. The only companies that Imtech Process has not yet worked for are Scottish Water, Northern Ireland Water and South West Water. Imtech Process's key clients in the current AMP4 period include:
  • Welsh Water - the company forms part of the AMA alliance, and is responsible for wastewater across the whole of Wales, the biosolids, sludge programme and capital maintenance. This business is worth about £20M a year to the company, which hopes to continue working with the utility in AMP5
  • Anglian Water, where it has delivered three large projects in a joint venture (GTM) with
    Galliford Try, including the £25M Kings Lynn STC that is now operational. A similar £28M project is being undertaken for the utility at Great Billing STW, Northamptonshire. Both these projects are part of Anglian's biosolids programme. In addition to that, there is the £57M water treatment works at Wing, Northamptonshire, which Imtech is working on through the GTM joint venture
  • South Staffordshire Water and Three Valleys Water, where Imtech Process has cleanwater capital maintenance frameworks in a joint venture with Naston
In addition to these, Imtech Process is undertaking one-off projects in this AMP period for Wessex Water and Thames Water.

Another Thames scheme that Imtech Process is bidding for is the £40M upgrade to Riverside WwTW in Rainham. The scheme involves reinstating an anaerobic-digestion facility. This will enable the plant to treat the solid waste left behind after the sewage treatment process, and turn it into enough renewable energy to power the entire site.

Imtech Process is already undertaking similar projects for Anglian Water and Welsh Water. Bidding for these large projects costs a great deal, not just in time and energy. Wildgoose says: "You have to be selective over what you decide to go for, and be reasonably clear you have a realistic opportunity of success.

"But it's interesting, because with the AMP cycle you traditionally get this lull at the start, where expenditure is minimal for the first year in terms of new projects. Then at the back end - the fifth year - it drops away again. The beauty of these larger projects is that they are going to be spanning across the [AMP4/AMP5] divide.

"From a business perspective, they're nice if we can get on board with one or two of them. It will make a difference to level out the dip across some other areas."

Wildgoose says that, when there are these dips, a contractor gears up for the work. "If there isn't the work, you can't sustain people for a long period. The more level the workload, the better it is, because you can plan it so that the cost is spread properly across the jobs as they happen.

Massive dip
"Traditionally, it's been very difficult. And I think the water industry has lost a lot of people because of the AMP cycle, in the early years, because it was very exaggerated.

At the end of AMP2 and the start of AMP3, there was a massive dip, which meant a lot of engineers moved into other areas. Business comes back at some stage, but some people won't come back.

"It's well advertised that there is a skills shortage in engineering, particularly in the water sector. The AMP cycle as it still happens makes it difficult to recruit and maintain a workforce with a guaranteed workload year on year."

Wildgoose feels water regulator Ofwat is gradually realising this. "They tried at the beginning of AMP4, with the Early Start programme, but that didn't really work because they didn't have time to really set it up and get the water companies bought into it.

For AMP5, Ofwat has made the water companies do 25-year business plans and think about AMP5, for instance, rolling into AMP6 and 7, so that there will be a better workflow."

A lot of water assets have been installed over the past ten or 15 years, and this will generate larger volumes of capital maintenance work.

"About 40-50% of their [the water companies] spend can be identified from day one."

To alleviate the dip, in the past 12 months the company has actively been marketing in the waste sector: the residual treatment of black-bin waste; energy from waste; and anaerobic digestion of food waste for instance.

Landfill targets
He says this market is still growing and developing, as councils take different perspectives to achieve their annual landfill targets.

"We're looking at anaerobic digestion, which links into the water sector and our experiences in terms of biosolids and CHP," he says. "We've been very active in biosolids projects. Burning the waste to get an energy product is something we've also been active in. These are opportunities where we can get involved.

"With the water sector, there is this cyclical effect. And we want to have something to balance that. That's the aim over the next five years, to get a waste revenue stream into the business."

He says water will always be the dominant force as this is where its knowledge and expertise is. Within the next three years, he envisages the company's turnover to be about £80M - with water accounting for 70-80% of that and waste 20-30%.

The waste projects tend to be larger, whereas with water there can be frameworks with a lot of small capital maintenance schemes or larger standalone projects.
"Typically, an energy-from-waste plant can cost from £20M-120M. They are significant projects with often long development periods."

As Wildgoose says, the company has come a long way.

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