Foreign firms seek water solutions
Updated: 2012-07-09 08:08
By Xie Yu in Shanghai (China Daily)
China is undergoing the greatest urbanization the world has ever seen. The new middle classes consume more water than previous generations. The country, which has a shortage of water, will need to find ways to conserve the essential resource. Wu Huang / For China Daily
Foreign companies are buying into the Chinese water treatment market, after the country vowed to invest 430 billion yuan ($63 billion) in the sector during the 12th Five-Year Plan period (2011-15).
Dow Water & Process Solutions announced in June that it will build a new world-class reverse osmosis membrane plant at the company's site in Huzhou city, in East China's Zhejiang province.
It would be the first production base for reverse osmosis membranes outside the United States, said Ian Barbor, general manager of Dow Water. The advanced technology is widely used in water and wastewater purification and has already been adopted by several programs in China.
"China continues to be the largest growth market for reverse osmosis," said Wang Xiaolan, Asia-Pacific commercial director of Dow Water.
China is adopting a new national standard for drinking water this month and also plans to raise the standard for wastewater discharge. The nation's determination to improve its water quality will boost our business, she said. According to the five-year plan for sewage treatment, China aims to improve its rate of treating wastewater to 85 percent in urban areas, 70 percent in county-level cities and counties and 30 percent in towns by 2015.
In addition to its 430 billion yuan investment, the government is also encouraging non-public finance in the sector, a move that has attracted companies all over the world because of the promising business opportunities.
"We are very excited by the potential of the Chinese market due to several trends that put it first in the world," said Serge Ajamian, regional manager Asia-Pacific of JIE Technologies, a Canada-based water treatment company that focuses on potable water solutions.
He pointed out that China is undergoing the greatest urbanization the world has ever seen. The new middle classes consume more water than previous generations. China, which has a shortage of water, will need to find ways to conserve the essential resource. The next trend is the increasing sophistication of the Chinese consumer in wanting a cleaner environment in all aspects. This bodes well for high quality products that can safely deal with water issues commonly found in China.
"Foreign companies have at least 95 percent of the market share in the household water purifier sector. They are now entering the wastewater treatment market," said Professor Wu, a Chinese expert in water treatment, who declined to give his full name.
Wu runs a membrane technology company himself. "They (foreign companies) are much more experienced - and Chinese authorities trust them," he said, adding that Chinese companies find the going tough because the price they offer is not much lower than foreign rivals and they do not have much experience in handling large projects.
Guo Zhihong, deputy director of the safety and environmental protection department at Sinopec Shanghai Petrochemical Co, agreed with Wu.
"We use membranes provided by US and Japanese companies to achieve high-purity water," he said.
His company treats more than 100,000 tons of wastewater every day, most of it undergoing biological treatment, at a cost of about 1 to 2 yuan a ton.
A small amount of the wastewater will undergo membrane treatment for industrial consumption at a cost of 7 to 8 yuan a ton.
"The quality of products provided by Chinese companies is not as good as foreign ones," he said.
The use of membranes to treat wastewater is very limited nowadays, because it costs so much. However, the potential in the market is huge because the standard for wastewater discharge will be raised and the cost of this technology will be brought down, Wu said.
Compared with other emerging markets such as India, China is more willing to spend money in the water treatment sector, said Wu.
More than 6.4 million cubic meters of sewage are discharged in Hangzhou Bay, the East China Sea and rivers in Shanghai every day, said Tang Jianguo, a senior engineer with Shanghai Water Authority.
Although the water quality is above the national standard, the authority still wants to further improve it.
"We require both reliable technology and an affordable price for water treatment," Tang said, adding that foreign companies have obvious advantages in key technologies for water treatment.
It shocked the nation when statistics from the Ministry of Environmental Protection found underground water in 57 percent of monitored sites across Chinese cities was found to be polluted or extremely polluted. Ground water is generally lightly polluted.
More than 65 billion tons of wastewater were discharged last year, said the ministry but little is fully treated before going into the rivers and sea.
"A big problem is that although China's national standards for sewage discharge are high, some companies do not obey the rules," Tang said.
(China Daily 07/09/2012 page22)