Swiss power and automation technology giant ABB Ltd. ABB recently secured a contract worth over $160 million from the South African national electricity provider, Eskom, for developing its latest coal-fired power station Kusile. ABB will be responsible for providing control systems, software and instrumentation for the new-generation supercritical power installation. The system, with a capacity of 4,800 megawatt (MW), is capable of resisting extremities like high pressure and temperature.
Inside the Headlines
Per the contract, ABB will supply Eskom with an absolute control and instrumentation solution, which will encompass key areas like engineering, installation, commissioning, optimization and training. The Kusile power plant boilers run on wet flue gas desulphurization technology, making it one of the leading proponents of clean coal technology.
ABB’s solid reputation as a provider of energy-efficient, state-of-the-art technology solutions positions it better to extend automation technology and software services to new-age, clean coal power plants. On the other hand, Eskom’s decision to leverage ABB’s expertise and profound knowledge for developing its largest plant marks a prudent move, considering the latter’s proven ability to generate faster response, greater awareness and better value for clients.
Bottom Line
We believe the recent contract will benefit ABB’s Power Systems Division, which lately, has been delivering a weak performance due to decline in order levels. The company’s systems, installed in other African nations like Lesotho, Malawi, Botswana, Zambia, Zimbabwe and the Democratic Republic of the Congo, have been successfully delivering quality performance. Thus, we believe the latest multi-million award will help ABB reinforce its position as a leading supplier of electricity utilities in the power infrastructure market of South Africa.
Zacks Rank
ABB currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the industry include ESCO Technologies Inc. ESE, II-VI Inc. IIVI and AO Smith Corp. AOS. All three stocks carry a Zacks Rank #2 (Buy).
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