Johannesburg — AUSTRIAN plant engineering and construction firm AE&E Group will set up an office in SA and was also considering local acquisitions, it said last week.

AE&E, a subsidiary of industrial group A-TEC Industries, specialises in thermal power generation and environmental technology. The company sees opportunities in SA as the rising cost of electricity has triggered an interest in co-generation of the sort where an industrial facility uses its waste energy to produce heat.

Speaking in Sandton yesterday, Mirko Kovats, the majority shareholder in A-TEC Industries, said the company wanted to set up a local operation "with local suppliers and local engineering. It is important for job creation. We want to transfer technology and develop local skills.

"AE&E sees growing business opportunities in this region. The southern African regional economy holds great potential for economic growth, but recent energy shortages may hamper that growth," Kovats said.

He said it would not be enough for the company to just export "ready-made" technology to SA and the rest of sub-Saharan Africa, "and so we decided to launch a local presence in Johannesburg. By acting as a top-edge technology partner in the region, AE&E can optimally tailor its solutions to clients' precise requirements," Kovats said.

AE&E board member Oliver Klitzke said the company wanted Johannesburg to be a hub to serve the rest of sub-Saharan Africa.

AE&E said it was involved in paper maker Sappi Saiccor's expansion project near Durban. The project entailed the construction of the world's largest sulphite liquor and chemical recovery boiler, which uses the byproducts of pulp production. The project was completed in 2008.

Klitzke said the recent recession was not a deterrent for investment in local industry.

"This is the right time to start a limited investment," he said. SA's critical mining, steel and paper industries had energy supply problems, he said.

Companies within these industries have, on several occasions, bemoaned the effect of Eskom's excessive tariff increases. Sappi recently told the National Energy Regulator of SA that its electricity costs had gone up substantially in recent years. Last year the company paid more than R350m in electricity bills, it said.

Klitzke, however, said that the recession could affect companies' preparedness to embark on new projects. Companies were likely to carefully evaluate their capital expenditure. "But at the end of the day, they want to grow and they can do that if they have a reliable energy source," he said.