Water promises to pour profits: multinational companies invest in technologies to slake worldwide thirst (but not apparently in Bhopal)

Claudia H. Deutsch, the New York Times, September 24, 2006
Everyone knows there is a lot of money to be made in oil. But a group of big businesses is discovering there may be even greater profit in a more prosaic liquid: water.
“You’ve got exploding urban populations, increased pollution and a need to address those things in a meaningful way,” said Ian Barbour, general manager of Dow Chemical’s Water Solutions unit. “Of course, we’re investing significantly in the water business.”
Most analysts expect the water market in the United States to be worth at least $150 billion by 2010. And it may happen even sooner than that.
Arid cities like Los Angeles and Phoenix already grapple with sporadic water shortages. New York City’s water — once lauded for its purity — is getting cloudy, and the American Society of Civil Engineers has given the pipes and other parts of the country’s creaky water system a D minus.
Globally, water problems are even more immediate. Many experts estimate that water-related equipment and services already make up a $400 billion global market.
“Water is a growth driver for as long and far as the eye can see,” said Deane Dray, who follows many water companies for Goldman Sachs. Lots of others agree.
GE Energy Financial Services recently its first investment in water: $18 million in a wastewater reclamation plant in Atlanta. Alex Urquhart, the unit’s president, said he wanted to be holding $1 billion in water assets before long.
General Electric’s industrial executives have even higher aspirations.
In the last few years, GE has bought four water companies: Betz Dearborn in 2001, then Osmonics, Ionics and, most recently, Zenon Environmental Systems, which makes ultrafiltration membranes.
“Our water portfolio now runs the gamut of technologies that industrial customers, the Chinese government or the New York municipal water authority could need,” said Jeff Garwood, president of GE Water and Process Technologies.
Siemens, the German conglomerate whose units often compete with GE, makes the same claim.
It bought U.S. Filter, once a premier stand-alone water company, for nearly $1 billion in 2004 and has acquired six smaller companies since.
“There isn’t a water-treatment platform that we don’t now have the technology to address,” said Roger Radke, president of Siemens Water Technologies, which accounted for about $2.4 billion of Siemen’s $96.4 billion in revenue last year.
Chemical companies are taking an interest, too. Dow, which has made water-softening resins and membranes for treating water for 20 years, bought Zhejiang Omex Environmental Engineering, a Chinese company that adds three more technologies to Dow’s portfolio.

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