ABB Ltd. (ABB) has been awarded a contract worth $50 million for constructing transmission substations in Brazil. The contract was included in the first-quarter bookings of the company.
As per the deal, two new 230/69 kV (kilovolt) substations at Miramar and Tucurui and a 230/138 kV substation at Nobres for Eletrobras Eletronorte in Northern Brazil will be designed, supplied, installed and commissioned by ABB. Apart from this, a new 230/138 kV substation will also be constructed at Umuarama.
Futher, the company will extend the existing substation of Costa Oeste Transmissora De Energia S.A., a special purpose company of Copel Transmissao and Eletrobras Eletrosul serving the utilities in Sourthern Brazil.
ABB has also been awarded two other projects by Eletrobras CHESF, involving installation of a new 230/69 kV substation (Teresina III) and extending other existing 230 kV and 500 kV substations in North East Brazil. The projects are expected to be completed by 2013.
These are important development projects for Brazil, expanding and solidifying the country’s transmission and distribution infrastructure, which in turn, will meet the rising demand for electricity of residential, industrial and commercial consumers. With the rising population, which is expected to reach 220 million by 2020, the demand for electricity is expected to increase by more than 35% to about 144 gigawatts by 2020.
The power and automation technologies provided by ABB Ltd. enable utility and industry customers to improve performance, while lowering environmental impact. The company is renowned for its turnkey air-insulated, gas-insulated and hybrid substations with voltage levels up to 1,100 kV, which enables in efficient and dependable supply and distribution of energy.
Moving ahead, the emerging markets will be a significant growth driver, with a need for high efficiency power transmission technologies. Demand in mature markets is also expected to improve. Customer capital expenditures have increased with the rise in commodity prices.
Increased capacity in some later-cycle infrastructure-related businesses continues to exist. In many sectors, price stability has been attained. ABB has increased its prices to offset increasing raw material costs.
However, ABB Ltd's results are likely to be adversely impacted by macroeconomic weakness as more than 80% of the company's orders are derived from outside the US. A major competitor of ABB Ltd. is Siemens AG (SI).
ABB Ltd. is a Zurich, Switzerland-based power and automation technology company. The company operates in approximately 100 countries, structuring its global organization into five regions: Europe, Americas, Asia, the Middle East and Africa.
Currently, we maintain a Zacks #3 Rank (short-term Hold recommendation) on ABB Ltd.
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