[August 31, 2007]

Exeter firm thinks global: Manufacturer signs deal that could lead to Mideast projects.

(Fresno Bee (CA) (KRT) Via Thomson Dialog NewsEdge) Aug. 31--Waterman Industries has formed a partnership that could lead to the Exeter-based water-control equipment manufacturer increasing its sales in the oil-rich Middle East.

Waterman, a 95-year-old company that has rebuilt itself after a 2004 bankruptcy reorganization, announced Thursday that it has signed a deal with Toronto-based Bisan Inc., a company that represents manufacturers of water-treatment and control equipment doing business throughout the Middle East.

That means that Waterman-built water-control gates and valves could soon be finding their way into multimillion-dollar projects throughout the rapidly expanding economies of Saudi Arabia, Kuwait, Qatar, Bahrain and other nations, said Rob Pokelwaldt, Waterman chief executive.

Rising oil prices over the past few years have sparked a wave of massive projects throughout the Persian Gulf, often symbolized by the multibillion-dollar development of extravagant resorts and commercial properties in the tiny Persian Gulf emirate of Dubai, including the Burj Dubai, a $1 billion tower that will be the world's tallest when complete.

With those developments comes the need for massive water treatment and management infrastructure to support them, Pokelwaldt said -- and that means opportunity for Waterman to re-enter a marketplace that its 2004 bankruptcy had forced it to exit.

"Waterman was extremely well-respected and had a very strong international business prior to the bankruptcy," said Pokelwaldt, who came on to rebuild the company after it was bought by Denver-based private equity group Galena National Investment in 2005.

Since then, Waterman has rebuilt its work force from a post-bankruptcy nadir of only 15 employees to about 110 employees and has worked to rebuild its international presence, he said.

"Our international business has seen a spike with projects in Belarus, Latin America, Asia and the Caribbean Basin in recent months," he said.

But the Middle East could be even more fertile ground, he said.

"I'd argue that water is more scarce than petroleum" in that part of the world, he said. "Because of our expertise and reputation for quality and service, I think we'll be well-positioned."

Bashar Sukhon, president of Bisan Inc., said his company has been involved with water treatment projects throughout the Middle East, including a roughly $50 million water treatment plant for one of the largest privately owned residential projects in the United Arab Emirates, as well as waste-water treatment projects in Saudi Arabia and Jordan.

"The surge of the economy there has led to an increase in populations and in infrastructure, which leads to an increase in water treatment plant requirements," he said.

For Waterman, that could mean a big increase in the share of its revenues -- which the privately held company does not disclose -- that come from international business, Pokelwaldt said.

International business made up less than 5% of Waterman's revenue this year, he said.

"But next year, I'm anticipating about 20% of our revenue will come from international sources," with roughly a third to a half of that potentially coming from the Middle East, he said.

That could help Waterman meet its goals to increase its overall revenues by 25% this year, which could also mean an increase in employment at its Exeter plant of about 10% to 15% over the next 12 months, he said.

The reporter can be reached at jeffstjohn@fresnobee.com or (559) 441-6637.

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