Water. Desalination + reuse
Issue link: https://fhpublishing.uberflip.com/i/640467
BUSINESS | 16 | Desalination & Water Reuse | February-March 2016 of that downtime to the client and how is it affecting their business? Outsourcing of water operations with performance- based contracts can reduce this risk, which ultimately translates to lower total cost of operation. To sum it up, we have specialized knowledge that allows us to maintain sustainable performance of the plant." Nevertheless, the need among industrial users to know that the technology has a sound track record often overrides their recognition of the expertise of the technology supplier, says Sharma. "That's the big problem in our industry that I'm very passionate about trying to overcome. "I can say [to conservative customers] that by utilizing this technology, I can reduce your lifecycle cost of water by 25%. Don't evaluate it, let me give you 25% more water and let me worry about the result. Those conversations have to start happening." Emerging forces Sharma sees a force that may assist him in this quest to overcome conservatism towards new technology among customers in the growth of water scarcity. He sees increasing water scarcity stepping up customers' desire to find a way to reduce water-risk. "I think we're seeing this in emerging markets," says Sharma. "For example, we're seeing forward osmosis in China now. So why are we seeing that? It's cost driven. They were convinced that a lower cost was going to come from [that technology]. The real proof will be in the outcome. Did it work? Was it reliable? Did it meet the expected cost target? If yes, then we will see more of this technology; if no, then it could set back its commercialization by years." "And other technologies are coming into play. I think that end users are going to realize that there's a value proposition here and they need to become more creative in their ability to accept it." Days before we spoke, Aquatech had unveiled two major contract successes: one in the municipal market and another with an industrial client. Which sector is most attractive at the moment? And which areas of the market are hotspots? "Both are important. Industry is where we as a company are more focused. Although the projects are smaller than municipal, there are more of them. And the increasingly difficult-to-treat waters we encounter in industry lead the way to opportunities to create customized and differentiated solutions," says Sharma. Industrial scale As for the markets that are most alluring, Sharma indicates it's not always the obvious targets that offer the greatest opportunities. "The hotspots are where we can gain more differentiation through technical advancement and we can build revenue." He says the greatest opportunities for differentiation are in industrial projects. He points to the oil and gas sector as an example where the headlines are not good – the focus is on sliding oil prices – but where water supply is nevertheless growing as an issue: "Markets are down – oil and gas is down and capex is slowed. But each barrel of oil is producing three times that volume of water." The abundance of industrial opportunities, he says, is offset in part by the greater need to tailor solutions to the specific industry's needs. "The challenge is that they [industrial solutions] have to be customized and you need resources to address that." He says industrial consumers have been surprised by the rate of growth in their need for treated water and are responding in a counterproductive way: "The industrial market saved desal and it's not cooling off. But there has been a volume shock so they are now holding back which makes things worse. After all, water scarcity is water scarcity." The municipal market, he says, provides some balance: "A balance between the larger projects and the smaller projects is in my mind an essential part of our business." Are there geographical regions where Aquatech sees the appetite for risk as stronger – or the incentive to act on water costs as more powerful? "I think China is still robust," says Sharma. "We've had one of our best years in China in 2015 even though it [the economy] is slowing down. In China, water scarcity issues are still prevalent in spite of the fact that people are saying China's cooling." He says the intense economic growth in India coupled with mounting scarcity of water is creating a strong market for India dawning: Aquatech ZLD at a petrochemical plant in Tamil Nadu – "India's fundamentally going to be a very interesting market," says Sharma.