Water solutions provider goes big

WATER solutions provider Ace Water Pte Ltd calls itself a one-stop shop for water needs because it provides the whole range of services - consulting, contracting and operating - with an emphasis on design-and-build projects. It also has plans to develop and own its proprietary water technology in the future.

The firm has completed a number of projects totalling more than S$10 million. It typically handles contracts in the S$5-10 million dollar range, and last year finished the expansion of the NEWater plant at Kranji together with an undisclosed partner.

Some of its clients include the Public Utilities Board (PUB), NParks, ST Marine, and HSL Constructor, as well as local universities Nanyang Technological University and the National University of Singapore.

Managing director Tian Xianyong said his firm differentiates itself from other engineering services providers with its deep knowledge of a vast array of water treatment technologies such as microfiltration, ultrafiltration, reverse osmosis, ultraviolet, and biological systems, as well as technologies in other areas like desalination and water reclamation.

Furthermore, instead of handling these processes as separate units, Ace Water is able to integrate the entire water treatment process as a complete system, Mr Tian said.

Ace Water is an engineering firm at its core but it is able to advise its clients on how best to manage their water needs, adding value by providing consultancy services.

When asked about the viability of his firm specialising only in water technology, Mr Tian said: "Clean drinking water is a scarce and precious commodity both in Singapore and globally. There is actually a very high demand for better quality drinking water, or high purity processed water for industries. Thus even though this is a very specialised market, our services are in high demand."

He explained that industrial firms which rely on heavy machinery and equipment, utility companies which provide water, electricity, and gas, as well as end-users like farms and residences all need water. Hence he believes that specialising does not actually mean a smaller market for the company's services.

Mr Tian said that his firm was not one that relied heavily on research and development (R&D). It became interested when funding was available for it to develop its own proprietary water technology. His primary focus for now, however, is to strengthen the firm's core competencies by becoming better at utilising existing engineering technologies.

In one Anammox facility - referring to the process of removing nitrogen from waste water - that the firm designed and built, Mr Tian said his firm designed the entire plant from scratch, and paid particular attention to the layout and arrangement of the water pipes in the facility in order to achieve maximum efficiency and cost savings.

Right from the start, Mr Tian said that he was very conscious about the firm's bottom line, emphasising profitability when planning the business strategy of the firm. One of the considerations he faced was deciding how many staff to hire. Seven years after it was founded in 2010, its staff strength has grown to 66 in order to meet the spike in demand for design-and-build projects.

Mr Tian said that only when he felt ready did he scale his firm up. Even though taking on more projects meant more revenue, he was always cautious about the firm's financial position.

While the firm handled at most one design-and-build project a year before 2016 - along with other consultancy and engineering projects - this year Ace Water handled a total of four design-and-build projects among other engineering tasks.

To cope with the spike in workload, Mr Tian said that he sometimes hired sub-contractors to assist with the construction processes instead of expanding his current pool of staff. "To me, what I think is most important is providing the value-add for our clients. If someone else can perform the construction tasks more efficiently, then we will outsource to them. Otherwise we will handle the building ourselves."

Mr Tian was optimistic about the future of the firm, as it was well positioned to take advantage of the big water market in Singapore, he said.

The opportunities in NEWater processing are expected to yield an estimated market worth S$500 million in the next 10 years. Work on water reclamation plants such as the ones in Tuas and Kranji would yield a multi-billion-dollar market in the same time period, he added.

Ace Water has also attained the L5 grade awarded by the Building and Construction Authority (BCA) under the Electrical Engineering Workhead category, giving it a tendering limit of S$13 million. Mr Tian said the firm was expected to attain an L6 grade for the Mechanical Engineering Workhead category next year, which would give it an unlimited tendering limit. This would let Ace Water expand its business and compete with even the biggest of industry players.

Mr Tian was also looking to further expand his firm overseas, focusing on five countries - Myanmar, India, Sri Lanka, Pakistan, and China - due to the relatively large populations of people with limited access to clean drinking water.

Going forward, the firm would continue with its design-and-build projects but it acknowledged that high value design-and-build projects have low margins. Mr Tian said the company would also increase the number of operation and maintenance contracts, and work on industrial water reclamation.

What would yield repeat income at a high margin, Mr Tian said, is partnering local technology companies and tertiary institutions on the development of new products and intellectual property.

When asked about the financial health of the firm, Mr Tian said that the firm had exceeded the S$10 million revenue mark, but he did not disclose further details, except to say that his firm has been profitable every year since its inception.

"In future, our focus would be on leveraging our technological expertise to develop and own new products to ensure we have a long-term and predictable source of income for the stability of the company, in addition to our core contracting and O&M (operation and maintenance) business."