Aguero – Regional Manager, IMPSA Malaysia
Juan Aguero, Regional Manager of IMPSA, discusses the Bakun Dam project, IMPSA-Malaysia’s role as a regional leader in the hydro power segment, and the strengths brought by its local production center in Lumut
Mr. Aguero, you arrived to head IMPSA’s regional operations over 20 years ago. Can you explain IMPSA’s historical presence and positioning in the Malaysian market?
IMPSA is a leading renewable energy company that provides comprehensive integrated hydro and wind solutions. Today, the company’s two major markets are Latin America and Southeast Asia, as IMPSA started to move beyond its home market of Argentina in the early 1980s, first targeting the Americas and then Asia. In 1983, IMPSA establishing an office in Hong Kong, as the management team believed that Hong Kong and China would be our main Asian markets. Although we did have some initial success, the Chinese industry soon began to copy our technologies for both hydro and port cranes. As such, we decided to establish our local presence in Malaysia in 1989 by maximizing the local production and after sales services of the contracts we were securing. In 1996, together with relevant local partners, we established a Bumiputra JV company, IMPSA Malaysia Sdn Bhd, and have grown the business in Malaysia ever since. After years of investment and transfer of technology, Malaysia now serves as IMPSA’s headquarters for Asia, with a strong focus on hydro projects in the region.
Of particular note, our local production center established in Lumut is the only such high technology manufacturing facility located in South East Asia. This 21,000 square meter world-class facility not only manufactures turbines, generators and hydromechanical equipment, cranes and generator components for IMPSA in Southeast Asia, but has also exporting hydro components for projects as far afield as Venezuela. Since none of our competitors have a manufacturing facility located in Southeast Asia, our outfit in Lumut ensures that IMPSA stands out on the market.
How does being headquartered in Malaysia allow IMPSA to target the wider Asia-Pacific region?
In addition to hosting great infrastructure and logistics, Malaysia’s workforce is ready to learn, reliable and English-speaking. Thanks to these and many other factors, Malaysia serves as an ideal springboard for opportunities in Indonesia, Vietnam, the Philippines, and Thailand. IMPSA targets mainly hydro projects in these countries but the potential for wind energy also exists in such markets as Vietnam.
However, project financing is a major concern for these kind of infrastructure projects in the region. Particularly for private development scheme such as Independent Power Producer (IPP), that require an adequate framework and financing. In Asia, Japanese, Chinese and Korean power companies are able to go abroad and provide turn key projects including construction, equipment and full financing of major energy projects. Malaysia could also undertake projects in the same manner if the proper financial backing is in place. The country has the industry and the technology to do it – only the financing element is lacking. IMPSA is thus working with the government to help encourage more active and aggressive participation in the financing of projects. Malaysia has the capacity and the opportunity to become a regional finance center, and IMPSA supports this ambition.
In 2013, IMPSA signed a cooperation agreement with Worldwide Holdings Bhd for the joint development of a waste-to-energy plant in Selangor and other states in Malaysia. Can you tell us more about this project and what benefits it will bring to the Malaysian energy sector?
IMPSA has now successfully undertaken the engineering work for this waste-to-energy project, although we are still collaborating with the government of Selangor State to obtain the final necessary approvals, due to the recent changes in the State authorities. The project offers several clear benefits. Firstly, it will lead to a reduction of waste. Secondly, it will also offer land savings since Selangor’s land is scarce and many landfills are currently located in residential areas. Thirdly, the project will offer a cheap source of energy for consumers, enabling a possible savings of 35 megawatts/hour of electricity for 100,000 households. Finally, this waste-to-energy plant will reduce environmental impact due to reduced dioxin emissions.
In a 2011 interview you stated that “if feasible, we intend to develop the first wind farm in Malaysia.” Has there been any progress on this front?
In collaboration with Tenaga Nasional (TNB), we completed studies at several potential sites in peninsular Malaysia and Borneo to determine the country’s wind generation potential. Unfortunately, though, it has not proven commercially viable to promote the development of large wind energy farms in Malaysia. At sites tested in Sabah, for example, the length of the transmission line was so great that reaching the main grid would not be economically feasible.
Which hydro projects in Malaysia and in the larger region are on IMPSA’s radar?
In Malaysia we are focusing in two large projects to be developed in Sarawak, Baleh and Baram, both of about 1,200MW each. In peninsular Malaysia, we target to participate in the development of projects in Pahang (Tekai), and Kelantan (Nenggiri). Some of them are very important not only for the generation of electricity; but as its dams will contribute to flood mitigation in that region.
IMPSA’s technologies are focused on renewable energy. How do you see these services as complimenting Malaysia’s strength as an oil and gas producing and exporting nation?
One of the main areas in which Malaysia can complement its potential as oil & gas producing nations with its renewable energy resources, is by replacing gas burning generating power plants by renewable sources and utilize the saved gas either to increase exports, or to produce more added value petrochemical products with it.
Additionally, by developing the great hydropower potential in Sarawak and connecting it to the peninsula’s grid; Malaysia could become an exporter of renewable electricity to other countries in South East Asia.
Downstream development is a major strategic focus in Malaysia, with the PIPC and RAPID mega-project in Johor. How is IMPSA poised to take advantage of new opportunities created in Malaysia thanks to this mega-project?
IMPSA also has a downstream offering with a variety of packages from pressure vessels and process plants to waste to energy. The RAPID project includes a waste to energy plant.
IMPSA places high stake on innovation and hosts a Technology Research Centre (CIT) in Mendoza, Argentina. How does Malaysia play into the global innovation culture of IMPSA?
IMPSA’s Technology Research Centre (CIT) in Mendoza is at the vanguard of renewable energy technology. At this facility, IMPSA’s researchers undertake basic design and R&D in the areas of hydraulics, aerodynamics, fluid dynamics, structural analysis, mechanics, electrical machines, electrical systems, insulation systems, tribology, heat transfer, mechatronics, automation, and control. IMPSA uses this research to bring integral and sustainable energy solutions, produce more reliable and efficient hydropower generating units and provide customized financial engineering and products for the entire life cycle of the projects.
For projects in Malaysia and Southeast Asia, IMPSA provides feedback on local conditions to the CIT. This feedback loop and a permanent exchange of professionals between Argentina and Malaysia enriches IMPSA’s offering in Asia, and the final result is reflected in the efficiency created in our products and machines.
What project in Malaysia would you highlight to demonstrates IMPSA’s capabilities in its fullest?
The Bakun Dam project in Sarawak, generating 2,400 megawatts of electricity clearly stands out.
The Francis turbines supplied by IMPSA are the largest in Southeast Asia and among the most efficient worldwide. The Bakun power station is the largest hydroelectric dam in Malaysia and the development represented one of the largest power projects ever undertaken in Southeast Asia. Although a controversial project at the time, Bakun represents savings of approximately $2 billion a year. Furthermore, if it would have to be built today, construction costs would be more than double.
You are the first South American Managing Director we have met here in Malaysia. What piece of advice would you give to fellow Argentinians and South Americans looking to set up shop in Malaysia?
To be successful in Malaysia, one must be committed and consistent. For IMPSA, our commitment, both in terms of local investments and efforts made to train local staff, has clearly paid off. Thanks to these efforts, the quality of our work in Malaysia is among the best around.
Following twenty years here in Malaysia, how would you like to shape IMPSA’s presence in the region over the next five years?
Thus far, IMPSA has achieved our targets of localizing the company and establishing IMPSA-Malaysia as the regional leader in the hydro power segment. In the next five years, I would like to see IMPSA continue to take on hydro projects in both peninsular Malaysia and Sarawak, and, with financial backing from Malaysia, target projects in the region. Our factory in Lumut sets up apart from the competition, as we manufacture our products locally. Thanks to our strong Malaysian base, we will continue to strengthen our position as a leader in hydro power sector in Southeast Asia in the years to come.
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