SAN DIEGO -- Nothing would make a bigger difference in the lives of most Asians than clean water and a toilet. Less than half the population in China, India, and Cambodia have acceptable sanitation. Water shortages and steep increases in the price of water have prompted municipalities and industries in many Asian countries to institute more effective water management and better technologies, leading to reductions in consumption levels. More importantly, many in the water industry have become eager participants in the unfolding tableau of dramatic proportions to meet critical human needs in water supply and sanitation in many parts of Asia.
With rapid economic growth and industrialization, some parts of Asia, particularly Southeast Asia, are among the fastest-growing markets for water and wastewater quality equipment worldwide, with average annual growth projected at upwards of 15 percent in the years ahead. In its recent report, Environmental Business International (EBI) estimated that the water and wastewater sectors in emerging markets in the region (not including Japan and Australia/New Zealand) stood at around $9 billion in 1996. Nearly half of this comes from revenues of water utilities which are still largely public-sector owned. Actual investments in water and sanitation in China, Indonesia, South Korea, Malaysia, the Philippines, Thailand, and other countries rose from $2.7 billion in 1990 to $3.6 billion in 1992. The World Bank figures that water and sanitation investments in Asia's developing economies will reach $153 billion between 1995-2004.
Asian countries -- notably Malaysia, the Philippines, Indonesia, Thailand, and China -- are privatizing water and wastewater sectors, to varying degrees. According to Grant Ferrier, president of EBI, an independent research and consulting company which publishes the Environmental Business Journal and Asia Environmental Business Journal, the private sector is playing a bigger role today than ever in providing both discrete tasks and comprehensive turnkey services in these countries. Despite the complexity and political sensitivity of privatization agreements, the region has become a spawning ground for some of the world's largest management contracts in water and wastewater.
The global water operators from France and the United Kingdom clearly rule the roost, wisely aligning themselves with some of the region's most powerful industrial conglomerates endowed with deep pockets and impeccable connections. Suez Lyonnaise des Eaux of Paris has been the most successful developer in Asia, with at least a dozen contracts in drinking water and/or wastewater. At its heels are Compagnie Generale des Eaux (CGE) which has $239 million in estimated revenues from projects in Australia, New Zealand, China, South Korea, and Southeast Asia. British firms Thames Water, United Utilities, Anglian Water, and Biwater follow.
The water/wastewater equipment business is set for some consolidation, as public- and private-sector clients increasingly demand turnkey solutions or just more bank for their money. In the highly fragmented industry across the region, there are few large providers of process water, chemicals, and wastewater treatment systems as well as many different competitors in as many different areas. Outside Japan, Japanese companies such as Kurita Water Industries, Organo Corp., and Nomura Micro Science are dominant in the microelectronics field, mainly in Taiwan and South Korea. U.S. Filter of the United States, Switzerland's Christ, and Germany's Hager & Elsaesser are highly competitive in Southeast Asia.
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