Focused on growth
We now operate with a streamlined organization based on company-wide business units to work around geographic boundaries and stimulate greater growth. The units are Hydro/Wind, Oil & Gas, Industrial/Regional and Thermal/Nuclear/T&D. These are supported by a Project Delivery Group comprising project management, engineering and support functions to execute projects

Since joining forces with Hatch Optima this past April, our position in the oil and gas industry is stronger than ever. In 2005, we also underwent a name change to identify us more closely with our parent company Hatch and its vast global resources. Operationally, we have been heavily involved with Hatch, prospecting for new business and jointly developing projects by pooling our expert resources for more efficient and superior solutions. We also carried out many initiatives to further strengthen our safety programs by incorporating the extensive processes and resources in Hatch.

Performance in 2005
We saw significant growth in 2005, particularly in the last six months, which will continue through 2006 and produce a steady stream of work through the coming decade. Major project milestones were achieved across all business sectors.

After nine years of construction, the 2000-MW Karun III project begins generating electricity in 2006

Hatch Optima has been busy completing oil sands and enhanced oil recovery projects in Saskatchewan and Alberta. Meanwhile, the massive Karun III hydro generation facility is just a few steps away from full operation this year. In Ontario, the Shikwamkwa Replacement Dam was completed ahead of schedule, clearing the way for the original 48-year-old dam to be breached and taken out of service this year. Our longstanding involvement with the Red River Floodway continued with expansion work that will more than double the channel capacity by 2009. Facilities were completed for Phase 2 of Voisey’s Bay Nickel Company’s hydromet development and testing is well under way for the nickel processing program.

Work on the Halifax biosolids processing facility continued throughout the year, with the building enclosed and now ready for equipment installation. For Irving Oil, we reviewed more than 40 bulk marine terminals and inland bulk fuel-storage facilities, and are completing the implementation of a program to ensure segregation of ultra-low sulphur diesel oil from high-sulphur fuel.

We started work on SkyPower’s 201-MW wind farm development in Québec, the largest private energy production project of its kind in Canada. It will generate approximately 625 million kWh of electricity annually; the initial test phase involves constructing 9 MW of installed capacity by the end of this year. And we also started work on what will be the world’s largest-diameter hard-rock tunnel, diverting water under the City of Niagara Falls and into the Sir Adam Beck II generating station to create an additional 1.6 TWh of electricity per year.

Our long-term oil and gas clients continue to rely on our single-source solutions for numerous projects, and we remain focused on delivering the breadth and depth of service they expect. This year, we will upgrade project management and CADD capabilities to facilitate execution of larger oil sands projects; and will leverage Hatch's global operations to bring our wide range of services to oil and gas operations in new regions.

In the industrial sector we will expand our international collaborative efforts with the Hatch Group, focusing on our strengths in marine facilities, fuel handling and storage, industrial buildings, environmental permitting/remediation and community development planning.

We look forward to more high-profile work in the nuclear sector with the Unit 1 and 2 restarts at the Bruce A plant in Ontario, as well as a refurbishment of the 635-MW CANDU unit at Point Lepreau, New Brunswick. We are also working closely with Hatch to capitalize on more thermal opportunities in the international market, and will provide power and T&D solutions to Hatch’s mining and metals clients worldwide.

In hydro, we anticipate a continued upswing in international work due to strong economic growth in India, Pakistan and Central America. Substantial investments in these areas are from the private sector, and are reflected in much of the work that has recently been assigned to Hatch Acres.

We are also capitalizing on our strengths in the wind power sector, now involved in a number of extensive developments across North America.

New horizons
World investment in energy from 2006 to 2015 is estimated to be more than US$5 trillion. Electric generation and distribution will be $3 trillion with China, India and North America the largest markets for new investment. Renewable energy technologies, especially wind, will see significant continued growth. Oil and gas investment will increase as output strives to meet growing demand. Oil sands development in Canada will continue to accelerate with capital-project forecasts at $100 billion over the next 10 years.

The changes made and approaches taken in 2005 will continue to have a strong positive impact on our business and growth in 2006 and beyond. Our organization has showed healthy performance for many years, but this new era for Hatch Acres is one of great hope and excitement.

Along with all our clients and colleagues, I look forward to many successes in the year ahead.

Tony Hylton
President, Hatch Acres

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