Ecolab (ECL) is a leader in water, hygiene and energy technologies and services that protect people and vital resources. With 2012 sales of $12 billion and 44,000 associates, Ecolab delivers comprehensive solutions and on-site service to promote safe food, maintain clean environments, optimize water and energy use and improve operational efficiencies for customers in the food, healthcare, energy, hospitality and industrial markets in more than 170 countries around the world.
Vishal Sharma, Vice President and General Manager, Managing Director India, Ecolab told Sandeep Menezes that the introduction of ‘smart cities’ will need a better standard of treatment – from inlet to discharge.
Excerpts from the interview:
Larger cities across the country will lead to the demand for water growing at 18% to 20% per annum. Tell us about the cascading benefits & challenges to water treatment segment.
As water demand rises in large cities the treatment volume will increase, and with the introduction of ‘smart cities’, we will need a better standard of treatment – from inlet to discharge. So overall the treatment needs growth will be twice the water volume growth. This will also enable new technologies, ensuring that government buying moves from price-based tenders to quality – and performance -oriented ones.
According to recent reports, Indian water and wastewater treatment chemicals market revenues are expected to grow at a CAGR of over 9% during 2014-19. Tell us about the main growth drivers.
Many factors contribute to this – including what I mentioned above – as far as personal, household and commercial water consumption goes. Add to that urbanization, migration from villages to cities, industrialization (the PM’s Make in India initiative for instance), increasing standards of sanitation and the Swachh Bharat programme, the construction of tens of thousands of toilets, 1.5 per cent annual population growth, and the pressure on water availability leading to better water management and the increasing need to recycle. All this will lead to strong growth of water treatment needs. The average per capita water consumption currently in the residential segment in India is less than 20 per cent of the developed world. The planned 6 per cent -7 per cent GDP growth will drive even more consumption. However, it needs to be understood that commodities will have a tough time as technology takes over and markets move from pure price to a performance and quality mix, and the total cost of operations versus product price equation shifts.
Due to the increasingly stringent wastewater discharge requirements in India, many MSMEs are turning to specialist companies for sustainable solutions. Going forward, how do you foresee the scenario?
This trend will only increase. Solutions will be needed, not products. Technology and outcomes will be dominant. The laws on water intake and discharge will only become more stringent. Several industrial areas are already water-deficit, so the need to recycle and minimize discharge will increase.
Delhi and Mumbai, which generate around 17% of the country’s sewage, have nearly 40% of its installed capacity. This shows a huge requirement of urban wastewater treatment infrastructure. Comment.
We all can see open drains and the sewage lying around. We know where this gets discharged, and in what form, and the resultant problems that creates from a hygiene as well as cost point of view. Cities need a dramatic change in treatment capacity, and this will happen. It’s a matter of time. Wastewater treatment infrastructure will need to make up the current deficit and keep pace with the population needs and the changing standards.
In spite of the huge water scarcity across India, water desalination projects have largely not been taken up except in Tamil Nadu. Comment.
Chennai has been the most troubled with water access. But, other large coastal cities have some access to alternative resources. Hence, Chennai moved first and fast on desalination projects. Going forward, depending on the demand-supply gap, other coastal cities could follow suit.
Around $20 billion will be invested in water treatment, irrigation and recycling nationwide during the 12th Plan period. How does Nalco look at this huge growth opportunity? Is there a business strategy to tap into it?
Nalco is focused on industries and institutions. Water treatment in the municipal or residential sectors is not our core focus currently. Additionally, we are more focused on chemistry versus capital projects, though we do selectively pursue the latter. However, the trends and economic momentum will provide opportunities to every player in the water area who can create value for the customer. Our core competence is in getting the customer the results they need and creating a win-win for Nalco and our customer.