New Delhi: India’s dwindling water resources spell opportunity for purification companies as people living in homes seek to monitor consumption and recycle what they use.
Even as groundwater levels decline and governments implement stricter policies on the efficient use of what’s available, such businesses are looking beyond the industrial segment, which is estimated at $700 million (Rs3,234 crore).
Software company Wipro Ltd, which launched its venture in the business in 2008, completed its first residential waste water recycling project in Bangalore earlier this month. The Sushruta Vishranthi Dhama, a retirement complex, has 250 residences and is the first such undertaking by the company outside its campus.
“It’s still niche, but in less than five years, we expect water treatment facilities at townships and condominiums to grow 15% annually, on par with the market for industrial water treatment,” said Hariprasad Hegde, vice-president and business head, Wipro Water.
The company is in talks with “a dozen other residential townships” for water treatment projects, Hegde said, without giving details.
Typically, water purification companies in India have concentrated on only refining potable water, or increasing its purity levels for industrial applications. The focus now, say companies, is to get houses to reuse water in toilets, for washing and for gardening.
Photo: Ramesh Pathania/Mint
“These three activities are 85% of the water consumed by a household, and now when governments are passing new guidelines limiting the water available to SEZs (special economic zones), malls and townships aren’t far behind,” said Sudeep Nadkarnee, sales and marketing manager with Aquanomics Systems Ltd, a Pune-based water purification systems company. “That’s the next big boom.”
An industry report pegs the present residential water treatment market at $100 million.
India’s water woes are set to escalate. A 2007 report by the government, called the Trombay Symposium on Desalination and Water Reuse, which formed the basis of a Supreme Court directive to increase efficiency, said that water resource management “is going to be the most serious problem that the country will be facing in the 21st century”.
According to a Planning Commission report, India’s annual rainfall is 4,000 trillion litres, of which only 1,869 trillion litres is usable. Of this, less than 1,123 million litres is actually put to use and the rest is wasted.
Groundwater, which accounts for 433 million litres, contributes 70-80% of that used in farms, around four-fifths of the supply in rural areas and around 50% of that used in urban areas and by industry in India.
Climate change, the Trombay report says, already accounts for a 20% increase in water scarcity, with the remaining 80% being due to population increase and economic development leading to water pollution.
Demand for fresh water by the industrial sector rose from 3% of availability in 1990 to 4% in 2000 and will be up to 11.5% in 2025. Irrigation demand is projected to decline from 84% in 2000 to 73% in 2025, the report adds.
Meanwhile, contamination in rivers and lakes and inefficient treatment plants prevent surface water in rivers such as the Ganga and Yamuna from being effectively utilized.
Complementary to the water purification business are companies such as Germany-based Techem Energy Services Gmbh, one of the largest metering companies in the world.
Florian Angerer, who heads the firm’s India operations, said metering India’s booming, unchecked residential water consumption is a potential moneymaker.
Techem, which monitors water consumption using radio frequency identification technologies, currently charges €20-30 (Rs1,260-1,890) per month per house in European countries for their services, and is confident that Indian consumers will pay similar rates.
“Our experience in 20 countries has shown that metering water consumption reduces citizen’s water bills by 30%. So when water is eventually scarce, consumers will definitely pay,” Angerer said.
He added that Pune would be among the first cities to avail of their technology though he didn’t announce specific tie-ups with residential complexes, or expected annual revenues.
The market would be confined to a niche unless strong laws limit water supply to households, said S. Sudeep, who heads Norit India, a subsidiary of the Norit Group, a water purification company.
“We need much greater levels of awareness,” he said. “Currently only those complexes that have over 150 houses may consider it viable. The investments are too high.”
Hegde estimates that a complex with 100 households consumes 50,000 litres per day, requiring a Rs20 lakh investment, which when compared with tanker supply and maintenance would pay for itself in less than two years.