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tate-run construction firm Wijaya Karya (WIKA) is venturing into the drinking-water business as the company joins a consortium that will process water and distribute it to consumers.

Destiawan Soewardjono, an operational director with WIKA, said the company had made an entry into a drinking-water treatment system (SPAM) consortium with city-owned agencies Jasa Tirta II, Pembangunan Jaya and Tirta Gemah Ripah to process water from the Jatiluhur dam in West Java and distribute it to areas around West Java and Jakarta.

He said the company was currently undergoing a feasibility study that was expected to conclude next year. '€œWe hope to start construction next year, and the construction is expected to conclude in around three years,'€ he added.

'€œWe decided to enter the drinking-water business because we see the business has huge potential to explore and is in accordance with WIKA'€™s core business. We hope that we can also be involved in the construction.'€

According to media reports, WIKA will hold a 20-percent stake in the consortium for the project, which is projected to absorb Rp 1.6 trillion in investment.

'€œWe hope the consortium can help meet increasing demand for water in Jakarta and surrounding areas,'€ he further added.

The water-treatment facility is designed to stream 10,000 cubic meters of water per second.

Destiawan said the company was also expecting to enter similar business in East Java via a consortium.

Asjaya Indosurya analyst William Surya Wijaya applauded the construction firm'€™s decision to venture into the drinking-water business, given its huge potential.

'€œThe drinking-water business is a defensive business, which means no matter how volatile the economic situation is, the business will survive because water is a basic human need and the business opportunity will keep growing. This can be a good alternative in generating additional income,'€ he said.

He further added that SPAM business was in line with WIKA'€™s business, as the company has a pre-cast concrete subsidiary that could contribute in building the water pipe for the project.

'€œWhile construction firms are predicted to have better performance next year with increasing infrastructure budget, WIKA is facing tightening competition with a number of strong players, including with the entry of [diversified conglomerate] Astra International Indonesia into the construction business through acquisition.'€

WIKA, the country'€™s biggest state-owned builder, reported that its revenue between January and September this year hit Rp 8.61 trillion, up by only 8.81 percent compared with the Rp 7.92 trillion recorded in the same period last year.

The revenue excluded income generated from the company'€™s joint operations with other contractors.

In comparison, WIKA booked a 24.17-percent year-on-year (yoy) increase in the first nine months of last year.

With a modest growth in revenue, WIKA'€™s annual net profits remain flat, growing by only 2.66 percent to Rp 400.71 billion from Rp 390.33 billion as of the third quarter of last year. The company managed to book a 38-percent increase in its net income from the same period last year.

WIKA corporate secretary Suradi previously said that WIKA might wrap up the year meeting only 97 percent of its targeted revenue of Rp 14.09 trillion and around 80 percent to 90 percent of its targeted net profits of Rp 678.65 billion.