 "PPP model for water industry is not viable: Rajesh Sharma")
Rapid urbanisation and decrease in fresh water availability are forcing companies to adopt water and wastewater treatment technologies in India. However, public-private partnership will not be successful in water industry, feels Rajesh Sharma, Chairman and Managing Director, Ion Exchange India (one of the leading providers of water and wastewater treatment solutions in India), as low water tariff do not entice consumers to invest in modern water treatment technology.
In this interview with Rakesh Rao, Sharma provides useful insight into Indian wastewater treatment market and challenges facing this industry.
Ion Exchange India Ltd is celebrating its golden jubilee this year. Over these years, how has the company transformed? Are you planning for next transition for your company?
Ion Exchange (India) Ltd started with the manufacture of ion exchange resins and water treatment equipment for production of process water for the industry. In the late 1970s, the company started offering waste water treatment solutions to the industry. Subsequently, through collaborations with international leading companies and developing products/technologies through its R&D, the company was able to build capability to offer total water management solutions to industry and has extended the same to communities and homes.
Now the company plans to enter into large municipal infrastructure and sanitation projects in India and abroad.
ALSO READ: Environmental concerns keep wastewater treatment industry's revenue streams flowing
What is your opinion about the Budget presented by the FM? Will it give impetus to water and wastewater treatment industry?
The Union Budget presented by the Finance Minister augurs well for sustainable growth of economy, in particular for water and waste water treatment industry. Substantial investment is planned to build infrastructure for providing safe drinking water and sanitation, both in rural and urban areas.
How is the demand for zero liquid discharge (ZLD) system in India?
Demand for zero discharge systems is certainly increasing in India as well as globally. We have constructed four such projects, three in India and one abroad.
Water scarcity is increasing in India with availability of water for industries being reduced. How can companies cope with such situation? Has the industry's approach towards water management changed in recent years?
You are right. Availability of fresh water for industry is going to be a challenge. Increasing population will have higher demand for food, which will necessitate higher agriculture production. Agriculture sector uses almost 70-75% of fresh water and increased agriculture production will put more stress on available fresh water resources.
The rapid urbanisation too will need more fresh water for drinking and sanitation purposes. At the same time, we expect higher industrial growth, which would also require more fresh water. Certainly, the demand for agriculture and human consumption will get preference over industrial requirement. Thus, the industry will have to look at alternate sources like sea water, wastewater recycle, etc. The industry has realised about the impending water crisis and started taking initiatives for water conservation and recycle.
What is driving the market for water and wastewater treatment in India?
Increasing population, rapid urbanisation and industrial growth, coupled with scarcity of water and stricter pollution control norms drive the market for water and wastewater treatment in India. Limited supply of fresh water and contaminated surface and ground water needs to be treated to make it safe. This has opened market for point of use purifiers and bottle water. This market is growing at the rate of 20% per annum. Higher tariffs definitely compels the industry and housing societies to consider water recycle favourably, as it works out to be more cost effective.
ALSO READ: Industry needs to find ways to reduce/reuse and recycle water: Mahesh Rao, Nalco Water
When it comes to adoption of wastewater/effluent treatment regulations play a big role. Do you think the current pollution control norms are stringent enough to compel companies to adopt eco-friendly technologies?
Current pollution control norms are stringent, but implementation varies from state to state. Besides stringent pollution control norms, realistic tariff for fresh water supply will also force the industry to seriously consider water conservation and wastewater recycle. At the same time, the industry’s obligation to the society is driving the sustainable development agenda and compelling the industry to adopt eco-friendly technology.
How much of your business comes from exports?
Currently, about 20% of business comes from exports. Our aim is to reach 50% in next 5 years.
What are the challenges faced by companies offering water and wastewater treatment solutions in India?
Entry barrier for this industry is low and, therefore, a large number of unorganised local players exist without proper after sales service set up, which adversely, affects the organised players. Public-private partnership (PPP) model for water industry is still not viable, because of subsidised tariffs, which hardly cover even the operation & maintenance cost. The water tariff needs to be raised to offer private investor suitable return on the investment made, only then the PPP model will become successful and it will open a big opportunity for water industry.
With regard to research, what your focus areas?
Our focus area is on developing products/technologies, which require less use of chemicals and minimum consumption of electricity. We continuously work towards developing innovative products/technologies to cost efficiently treat industrial process and wastewater with special focus on recycle and zero discharge. Also, we are regularly developing products for removal of harmful contaminants from ground/surface water to make it suitable for drinking purpose.
What are your future growth plans?
We hope to grow at least by 10% during 2014-15 and in the subsequent years at 15% per year.
In this interview with Rakesh Rao, Sharma provides useful insight into Indian wastewater treatment market and challenges facing this industry.
Ion Exchange India Ltd is celebrating its golden jubilee this year. Over these years, how has the company transformed? Are you planning for next transition for your company?
Ion Exchange (India) Ltd started with the manufacture of ion exchange resins and water treatment equipment for production of process water for the industry. In the late 1970s, the company started offering waste water treatment solutions to the industry. Subsequently, through collaborations with international leading companies and developing products/technologies through its R&D, the company was able to build capability to offer total water management solutions to industry and has extended the same to communities and homes.
Now the company plans to enter into large municipal infrastructure and sanitation projects in India and abroad.
ALSO READ: Environmental concerns keep wastewater treatment industry's revenue streams flowing
Also Read
What is your opinion about the Budget presented by the FM? Will it give impetus to water and wastewater treatment industry?
The Union Budget presented by the Finance Minister augurs well for sustainable growth of economy, in particular for water and waste water treatment industry. Substantial investment is planned to build infrastructure for providing safe drinking water and sanitation, both in rural and urban areas.
How is the demand for zero liquid discharge (ZLD) system in India?
Demand for zero discharge systems is certainly increasing in India as well as globally. We have constructed four such projects, three in India and one abroad.
Water scarcity is increasing in India with availability of water for industries being reduced. How can companies cope with such situation? Has the industry's approach towards water management changed in recent years?
You are right. Availability of fresh water for industry is going to be a challenge. Increasing population will have higher demand for food, which will necessitate higher agriculture production. Agriculture sector uses almost 70-75% of fresh water and increased agriculture production will put more stress on available fresh water resources.
The rapid urbanisation too will need more fresh water for drinking and sanitation purposes. At the same time, we expect higher industrial growth, which would also require more fresh water. Certainly, the demand for agriculture and human consumption will get preference over industrial requirement. Thus, the industry will have to look at alternate sources like sea water, wastewater recycle, etc. The industry has realised about the impending water crisis and started taking initiatives for water conservation and recycle.
What is driving the market for water and wastewater treatment in India?
Increasing population, rapid urbanisation and industrial growth, coupled with scarcity of water and stricter pollution control norms drive the market for water and wastewater treatment in India. Limited supply of fresh water and contaminated surface and ground water needs to be treated to make it safe. This has opened market for point of use purifiers and bottle water. This market is growing at the rate of 20% per annum. Higher tariffs definitely compels the industry and housing societies to consider water recycle favourably, as it works out to be more cost effective.
ALSO READ: Industry needs to find ways to reduce/reuse and recycle water: Mahesh Rao, Nalco Water
When it comes to adoption of wastewater/effluent treatment regulations play a big role. Do you think the current pollution control norms are stringent enough to compel companies to adopt eco-friendly technologies?
Current pollution control norms are stringent, but implementation varies from state to state. Besides stringent pollution control norms, realistic tariff for fresh water supply will also force the industry to seriously consider water conservation and wastewater recycle. At the same time, the industry’s obligation to the society is driving the sustainable development agenda and compelling the industry to adopt eco-friendly technology.
How much of your business comes from exports?
Currently, about 20% of business comes from exports. Our aim is to reach 50% in next 5 years.
What are the challenges faced by companies offering water and wastewater treatment solutions in India?
Entry barrier for this industry is low and, therefore, a large number of unorganised local players exist without proper after sales service set up, which adversely, affects the organised players. Public-private partnership (PPP) model for water industry is still not viable, because of subsidised tariffs, which hardly cover even the operation & maintenance cost. The water tariff needs to be raised to offer private investor suitable return on the investment made, only then the PPP model will become successful and it will open a big opportunity for water industry.
With regard to research, what your focus areas?
Our focus area is on developing products/technologies, which require less use of chemicals and minimum consumption of electricity. We continuously work towards developing innovative products/technologies to cost efficiently treat industrial process and wastewater with special focus on recycle and zero discharge. Also, we are regularly developing products for removal of harmful contaminants from ground/surface water to make it suitable for drinking purpose.
What are your future growth plans?
We hope to grow at least by 10% during 2014-15 and in the subsequent years at 15% per year.