Flowserve Wins Another Order - Analyst Blog

Flowserve Corp. (FLS), a leading US-based pumps maker, received an order from Hydrochem (S) Pte Ltd, a wholly-owned subsidiary of Hyflux Ltd. This is the second major order booked in the second quarter of 2010 for Flowserve’s CALDER Dual Work Exchanger Energy-Recovery (DWEER) units.

The energy recovery system will be used in the Salalah Independent Water and Power Plant (Salalah IWPP) in Oman to generate energy from the high-pressure brine stream in the seawater reverse-osmosis (SWRO) process. The Salalah plant consists of a 445-megawatt gas-fired power plant and a 17.96 million-gallons-per-day reverse osmosis seawater desalination plant. Full commercial operation at the Salalah IWPP is expected to begin in the first half of 2012.

The first major order for CALDER DWEER units was received in May 2010 for the Sorek seawater desalination plant. The CALDER units specialize in designing, engineering and supply of energy-recovery equipments and technologies to various desalination plants globally and is used for reverse-osmosis process. Flowserve’s CALDER DWEER technology provides an energy efficient means of power generation and fresh water supply and has the ability to capture and reutilize waste energy from the desalination plants.   

Currently, most of the desalination plant focuses on developing cost-effective and efficient ways of providing fresh water to human beings in regions where the availability of fresh water is limited or will become limited in the future. Flowserve’s products are especially designed for such desalination plants. With substantial experience and expertise in the desalination industry, such deals in which Flowserve acts as a benefactor to provide solutions to supply fresh, potable water to regions would help the company to expand globally.

However, the process control industry is a highly competitive and fragmented industry. Many international, national or regional fluid-handling companies serve each of Flowserve's existing and potential markets. Competitors often target market share at the expense of margins, which could negatively impact both revenues and earnings. A major competitor of the company is ITT Corporation (ITT).

Headquartered in Irving, Texas, Flowserve develops, manufactures, and sells precision-engineered flow control equipment as well as provides a range of aftermarket equipment services.

We currently maintain our Neutral recommendation on Flowserve, with a Zacks #3 Rank ('hold') over the next one-to-three months.

 
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