Two reputable and successful South African companies operating in the local industrial and commercial steam power market have joined forces to work together growing their businesses to better serve the market’s needs.
Cape Town-based Energy Partners – Steam & Combustion, a member of the listed PSG Group, has acquired 100% ownership of Alberton-based Dryden Combustion with effect from January 3, 2017.
The companies will continue to operate separately but aim to take full advantage of the close synergies that exist between them to expand and develop their respective businesses.
Together they provide the full spectrum of services and equipment to users of steam in industry in Southern Africa and beyond, making the combined group a one-stop-shop for clients.
Energy Partners is a leading supplier of steam energy, combined with boiler control & optimisation systems, while Dryden Combustion is the largest supplier in the region of refurbished coal, oil and gas-fired packaged steam boilers. Dryden also supplies new steam and hot water boilers and offers a comprehensive range of oil and gas burners, combined with service &
spares backup for all equipment supplied by them.
“We are very excited about the prospects for future growth and development that this deal brings into play,” said Jonathan Probert, newly-appointed CEO of Dryden Combustion, formerly National Sales Manager – Steam & Combustion for Energy Partners.
“It is a major step forward in terms of the opportunities it opens up to expand the scope of both companies’ operations,
including better penetration into their respective markets, improving efficiencies of both outsourced and user-owned
boilers and ancillary equipment and achieving meaningful operating cost savings to the benefit of customers,” he stated.
“It also provides a strong foundation for developing new products and services to better cater to the diverse requirements of the market.”
Outlining the principal benefits both companies stand to gain by joining forces as a result of the acquisition, Probert said that Dryden Combustion’s extensive presence on the ground and close contact with steam-users it serves throughout the region will greatly assist Energy Partners in enabling it to extend its own customer base.
“Due to Dryden’s ongoing provision of after-sales service support and spares to its numerous customers in many sectors, it keeps constantly in touch with developments as they arise, including plans by customers to expand their steam capacity, what boilers are for sale or due to be replaced, and what businesses wish to have their steam outsourced – the main focus of Energy Partners’ business – or wish to operate their own boilers in-house, which is the market Dryden itself caters to.
“The information that is brought to light through the extensive network of contacts Dryden has built up in this way over many years is an invaluable resource that Energy Partners is keen to make use of to extent its own customer base in the industry,” Probert explained.
The other major benefit now available to Energy Partners is Dryden’s existing boiler repair and refurbishment capabilities.
“Dryden has a well-equipped facility for the repair and refurbishment of the boilers it purchases and re-sells into the market.
“Until now Energy Partners has outsourced this work in respect of the boilers it owns and operates in its steam outsourcing business. By making use of Dryden’s facility for the bulk of the repair, refurbishment and maintenance work required on its boilers, the company stands to achieve substantial cost and time savings to the benefit of its customers,” he commented.
Significant benefits are also in the offing for Dryden as a result of the acquisition, the primary one being the additional financial muscle it gains through becoming part of the listed PSG Group stable.
“This means access to additional capital for expansion of its operations when required, in contrast to its previously relatively limited access to capital as a privately-owned entity.”
Another major benefit to Dryden is Energy Partners’ impressive array of high-efficiency steam controls and energy optimisation systems. “These represent a vital component in Energy Partners’ steam outsourcing business, being a major factor in its success in this highly competitive field. Now Dryden is in a position to offer the same value-added benefits to its customers,” Probert concluded.
Energy Partners, founded in 2008, is a multi-divisional energy solutions provider in South Africa that provides clients with innovative solutions to suit their needs. Energy Partners has built a high quality team of talented individuals and robust processes which offer end-to-end solutions and integrate the different components of energy optimisation to deliver optimum results – including capital solutions that put clients in a positive cash flow positions from day one. Industries in which Energy Partners specialise include: food retail, retail, healthcare, hospitality, food processing and logistics.
PSG Group is an investment holding company consisting of underlying investments that operate across industries which include financial services, banking, private equity, agriculture and education. PSG Group has a market capitalisation in excess of R40bn; group companies include Energy Partners, Impak, Curro and Capitec.
Outsourcing offers steam users optimal efficiency
Energy Partners has made good progress to date persuading industrial and other steam users to adopt an outsourced solution in place of the traditional system of in-house managed and operated steam.
“In recent years, Energy Partners has been gathering momentum in its ongoing drive towards changing the traditional pattern of steam production management. We have been helped in this through the accumulation of sites, where we can demonstrate the success of the concept to potential new customers.
“By showing our successes to would-be customers, including allowing them the opportunity to confirm directly with our existing customers that outsourcing is effective and yields significant benefits, we provide them with the motivation they need to make the switch,” he explained.
“Boiler users are understandably reluctant to hand over such a key production process to a third party. They need to be assured that the entity that takes over this responsibility knows exactly what it’s doing and will
operate it reliably,” he adds.
Currently, the local market for steam outsourcing remains largely untapped. “We estimate that less than 10% of steam users in our market, encompassing industrial, commercial and service organisations, have adopted outsourcing solutions to date,” Probert points out.
In providing outsourcing packages to clients, Energy Partners purchases, supplies and installs the boiler plant – or alternatively purchases and takes over ownership of existing plant – and manages and operates it.
“The rationale behind the concept is, firstly, to free the client company of this responsibility to enable it to focus on its core business, and secondly, to ensure that the boiler plant operates optimally in all respects – at the highest possible production efficiency and lowest cost,” explains Jean le Roux, former COO of Energy Partners – Steam & Combustion and now COO of Dryden Combustion post the acquisition deal.
“Steam users who convert to outsourcing as provided by Energy Partners stand to gain higher production efficiencies regardless of how sophisticated their existing boiler plant is as operated by them in-house,” he says.
“While cost savings from adopting outsourcing vary considerably depending on the level of efficiency of the production and control equipment already in place, all users may expect to reap cost-saving benefits by outsourcing the operation and maintenance of their boiler plant to Energy Partners.”
The company deploys a high-quality programmable logic controller (PLC) based digital system to control and monitor all the outsourced steam sites it manages and operates on behalf of its clients. The system incorporates a real time monitoring system to ensure sustained operational efficiency of the boiler plant at all times.
The monitoring system, developed by Energy Partners’ own team of specialist engineers, is one of the main tools in the company’s technologically advanced digital control armoury that gives it a competitive edge in the steam outsourcing market.
“Our monitoring system is offered as an optional add-on to our production control system, but the majority of our clients
accept it as part of their outsourcing package as they recognise the key role it plays in ensuring continuity of optimal performance and reliability of the plant over time,” Le Roux comments.
Other noteworthy benefits offered to boiler users through outsourcing as provided by Energy Partners include:
- The outsourcing contract is a comprehensive deal whereby Energy Partners takes full responsibility for all aspects of management, operation and maintenance of the boiler plant, including fuel procurement, waste removal, water treatment and all the applicable regulatory requirements.
- The client pays only for steam used on a rands-per-tonne basis, while Energy Partners carries all costs relating to the running and maintenance of the plant at optimal efficiency, including those for technological upgrades required from time to time.
- As part of each outsourcing contract, Energy Partners is committed to paying penalties in the event of interruption of steam supply (in excess of mutually agreed limits) that result in production losses to the client.