"The best way to predict your future is to create it" AbrahamLincoln
As often shared with you in my previous communications the fundamental objective thathas guided WABAG in all these years is helping to ensure a better future for all byenabling the availability of clean and safe water worldwide. In an age of environmentaldegradation and climate change water needs to be seen through a differentprism. We have to learn to look at water as a finite economic resource that is onlyrenewable if well managed.
Water will have the same scarcity value in this twenty-first century like oil in thetwentieth century. According to estimates 50% of the worlds population will beliving in conditions of water stress by 2030 and 40% in severe waterstress by 2050. Globally 45% of projected 2050 GDP is at risk and as many as 50countries are potential locations for conflicts over water.
Coming to India large parts of the country especially the states of MaharashtraTelengana and Karnataka are suffering from an acute water scarcity leading to distress offarmers. Many states have recognised that water management needs to top their list ofpriorities. Maharashtra and nine other states including Madhya Pradesh Karnataka andUttar Pradesh are reeling under a drought-like situation. Depleting groundwater is alsoposing a major challenge to the farmers of Punjab.
According to the Ministry of Water Resources water levels in Indias 91 majorreservoirs were at 25% of capacity. It is 30% lower than that of last year and 25% lessthan the average storage in a decade.
Many factories in India are witnessing either shutdown or interrupted operations owingto water crisis. Closure of Parli & Kordi power plants and Mangalore refinery are fewexamples. Also the recent Bombay High Court order to shift IPL cricket matches out of theState goes to show that water crisis has already started to impact the regular business.
One of the direct methods of increasing water reserves are desalination of sea water.Desalination is now resorted to in 150 countries and it is set to emerge as a US$ 41billion industry by 2025. With the commissioning of the 100 MLD Nemmeli desalination plantin 2013 by WABAG Chennai has now two desalination plants that reduce the citysdependence on rain-fed reservoirs to a large extent. Chennai has shown the way forwardwith desalination and has also proposed to set up desalination plants to produceadditional 550 MLD of potable water in the near future. Taking a cue out of Tamil Naducoastal states like Gujarat and Maharashtra can benefit by building desalination plants tohelp mitigate their water crisis considerably.
Enormous business opportunity
Water treatment is a critical necessity with growing demand from agricultureresidential and industrial sectors. Agriculture in India currently accounts for 80% ofwater use; and the demand looks set to rise due to changing food habits. With stricterenforcement of environmental norms the industrial sector is under pressure to treatwater. Moreover industries are asked to look for alternate sources of water likedesalination and water reuse. Municipal and residential water use is also growing owing torapid urbanisation.
There are significant opportunities around water treatment with less than 3% of waterglobally being recycled. This market is barely tapped with insufficient wastewatertreatment around the world. Furthermore wastewater reuse stands at only 2.4% of all waterwithdrawals globally.
In this context it is essential to understand and appreciate WABAGs contributionin the water landscape. Around the world our efforts make possible innovative andfeasible solutions in the water engineering sector. Our rich experience in deliveringoptimum water solutions across geographies over nine decades has recognised us as a globalwater technology leader. Today your Company possesses more than 100 patents a result ofconstant Research and Development activities carried out across our dedicated R&Dcentres in Vienna Winterthur and Chennai. European water treatment technologies areconsidered to be the most advanced for achieving highest purity standards. Possession ofthis technology coupled with rich engineering capabilities in emerging markets led byIndia makes your Company competitive across the world. Since 1995 we have built 1200+projects contributing to the conservation of water and improving the quality of life ofover millions of people.
Year in retrospect
I am happy to share that despite a difficult macro environment WABAG has stood itsground and has won several big-ticket orders during the year. The year 2015-16 witnessedthe highest ever order intake (over Rs. 5000 Crore) by the Group in a single financialyear. This was achieved through our diversified geographic presence with focus on emergingmarkets.
I am also glad that the year 2016 marks 20 years of our successful journey in India. Inthis journey we had our share of challenges and headwinds which we converted intoopportunities and steadily built on our strengths. Today we have a marquee of referencesin India showcasing landmark projects in all gamut of water and wastewater treatment.
In the years of its existence your Company has constituted a richly competentinformed and diverse Board. Four of my colleagues besides me on the Board are IndependentDirectors. We as Independent Directors oversee how the management serves and protectsstakeholder interests by following best practices. The Board focuses on upholding the corevalues of excellence integrity responsibility and unity to ensure that there is a stronglegacy of fair transparent and ethical governance practice in the Company.
WABAG and social responsibility
During the year WABAG partnered with M.S. Swaminathan Research Foundation to implementa project on augmentation of water resources. The Water Augmentation project aimed atimproving the lives and livelihood of marginal farmers in Mailam Block VillupuramDistrict Tamil Nadu was completed during October 2015 benefiting more than 200 acres ofrain-fed lands. The Company built and donated a Sewage Treatment Plant at CancerInstitute Adyar Chennai. As part of environmental sustainability initiative the Companypartnered with Care Earth Trust to undertake training and capacity building for variousstakeholders with special focus on Pallikaranai marshlands. The Company also implemented adrinking water filtration solution and sanitation facility for the school children ofGovt. High School Kodungaiyur which is in the outskirts of Chennai. Since suchinitiatives can be easily replicated we are also looking at extending such programme toother needy schools in our project neighbourhood.
We are working collectively and passionately. I seek the support of all WABAGites andthe larger community of stakeholders in our journey forward.
Bhagwan Dass Narang