Metronic ... Feb 2009

It has clinched a RM12 million contract to build a water treatment plant and to supply water in China for 33 years.

Under the deal with China's Lai An County Water Utility Board, Metronic will design, construct, produce, operate, maintain and sell treated drinking water in Lai'An county, Anhui province. Metronic said upon the execution of the agreement, a wholly owned special purpose company called Anhui Lai'An Metronic Water Supply Co Ltd will be set up.

The rationale for the proposed investment is to enable Metronic Group to invest in the water concession business by tapping into the potential growth and lucrative recurrent revenue offered by the Chinese market.

This is in-line with China's urbanisation and awareness in environmental protection and need for safe-drinking water for rural, commercial and industrial development. The investment is expected to provide a steady stream of revenue, profit and cash flow to the group.

The company will also fund the construction of the water treatment plant with internal funds and bank borrowings.