Water treatment industry in India

There is endless demand of water: A country like india with a huge population and undergoing rapid urbanization has the task of making safe water and sanitation facilities available to growing cities. This opens up opportunities for more treatment plants, private sector participation in public utilities and industrial water recycling, desalination of sea water.

Even globally demand of water is expected to overshoot supply by 40% in next 20 years with half of world population living under water stress conditions by 2030. According to government reports, by 2020, global water industry could be worth US$1 trillion (marked by water treatment, water management, water infrastructure and supply segments).

India itself has many growth drivers, as per government data, industrial water requirement will quadruple from 30 billion cubic meters to 120 billion cubic meters by 2025.

Rapid urbanisation, dwindling fresh water reserves, a widening demand-supply gap and a depleting groundwater table will keep the water treatment business thriving for a long time.

An Ernst & Young (E&Y) study says the Indian water sector could require investment of around $130 billion between 2011 and 2030. Wastewater management, in particular, is emerging as a key thrust area. Currently, only 60 per cent of industrial and 26 per cent of domestic wastewater is treated in India. Metros and large cities are treating only about 30 per cent while smaller cities treat a minuscule 3.7 per cent of their wastewater.

The biggest consumer of water, however, is neither the domestic nor the industrial sector, but agriculture, taking up about eight times as much water as the other two put together (see Watershed). But domestic and industrial water requirements are increasing at a much more rapid pace than that of agriculture and are expected to double by 2030, while agriculture’s will rise only 11 per cent. Overall, demand is expected to soon outstrip supply.

Wastewater treatment has been a largely neglected area because municipal bodies cannot charge water users for the service. They can, however, do so for potable water projects. So, while municipal bodies often do get funding for wastewater treatment projects, operating and maintaining treatment plants is still a challenge. If a municipality has to manage a sewage plant which cleans 60 million litres of water daily, the annual cost is around Rs 3.3 crore. Power is the single biggest cost.

To streamline costs, companies like VA Tech Wabag have built captive power plants which utilise the sewage. Consider the recently inaugurated 45 million gallons per day Kondli Sewage Treatment Plant it built for the Delhi Jal Board.  “Our plant can generate 2 MW of power from sewage and will not need a single unit from the grid. The only cost that remains is manpower, chemicals, etc,” says Mittal. The green energy generated from such projects is also eligible for carbon credits. Business models like these can make projects viable.

My personal top pick in this sector: ION Exchange and VA Tech Wabag.

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