My Old Calls on Water Business…. Proved Right ...

Friends,

I wrote about water business on 4 July 2008…. http://bsensediamonds.blogspot.com/2008/07/water-opportunities-in-india-i-will.html

It seems that more and more analysts are coming with report on water business now…. I guess they might have visited my blog… lol….

In a report released by Deutsche Bank, they called water treatment business as one of most emerging business in coming years…. In coming years they are estimating the investment in Water treatment business as 400-500 billion Euro… Can you imagine??? How much big amount is this????? Current Investment in Water treatment business is like peanut in front of this 400-500 billion euro investment…. So you can think of yourself how big market is waiting to tap this opportunity…..

I have that full report with me… If some one wants that report send me an email… I will forward that report to you…… but its not possible to paste the entire wordings here in this blog…. I am pasting only summary of that report…. Read very carefully…..

“The world’s water markets are confronted with major challenges. The growth of the global population goes hand in hand with a rise in demand for food, energy and other goods. This means the demand for water will increase accordingly – in the face of a limited supply of this vital resource. Usage conflicts are inevitable, and will become more acute on account of wasteful use and pollution. Scarcity of water is a humanitarian problem and it can curb economic growth. Climate change will amplify many water-related problems and create new ones.

We put the annual investment required in the global water sector at about EUR 400-500 bn. Measured by this yardstick the sector is a picture of underinvestment, especially because water prices in many areas are subsidised and thus too low. As a result, there is a lack of incentives for necessary investments. The prices do not reflect the scarcity of water as a resource; wastage is encouraged. Corruption and the absence of ownership rights compound the problems. To turn the tide, water prices in many countries would have to be boosted. The need to incorporate social considerations in the process greatly reduces the scope for making such increases in practice.

Governments will not be able to raise the funding needed to cope with the upcoming tasks on their own. While there is considerable disquiet about private firms investing in the water sector, the public sector is simply unable to meet all the challenges single-handedly. For this reason, we believe it makes sense for governments and the private sector to cooperate more closely.

Makers of “water technologies” stand to benefit from huge sales potential over the next few decades – despite the risks cited. There is likely to be a particularly sharp increase in the demand for efficient irrigation technologies, seawater desalination and sewage treatment facilities, technical equipment (e.g. pumps, compressors and fittings), filter systems and disinfection procedures.

We have used a scoring model to rank the attractiveness of various countries for investments in the water industry. The Top 20 include many countries from the Middle East that are rich due to their oil deposits, located in very dry regions and relatively stable politically. Two big industrial countries, Germany and the US, and the world’s two most populous nations, India and China, are also among the Top 20 in our ranking. In principle, though, all countries require a substantial amount of investment in the water sector.”

What I think is “There is ample scope for companies which are in water treatment business OR related to that i.e micro irrigation, bottling, water purification related chemical production….. ” I am again reiterating my old calls here

1. Hindustan Dorr Oliver
2. Thermax
3. Patel Engineering
4. Himalaya International
5. Ion Exchange (india)
6. Larsen and Toubro
7. Degremont
8. Aquatech
9. Fontus Water

There is one more I would like to mention “TATA chemicals” is it a great company to have in your PF for long term… great plans ahead…

Take your own call and decisions……