By Jeff St. John
Japanese corporate giants such as Mitsubishi (OTCPK:MHVYF), Mitsui (OTCPK:MITSY) and Sumitomo (OTCPK:SSUMY) are aiming to capture a growing share of the business of providing clean water in an increasingly thirsty world – a business that some estimate could reach $1 trillion by 2025.
The news comes from Reuters, which on Friday cited executives at Japan's largest trading houses staking big claims in the expanding market for drinking water filtration, wastewater treatment and other water technologies and services.
For example, Sumitomo Corp. plans a tenfold growth in its drinking water and wastewater treatment business portfolio by 2020, up to 10 million customers from today's 1.3 million, company director Takahiro Moriyama told Reuters.
Trading house Marubeni plans to expand its water business customer base fivefold to 10 million over the next few years, and it and fellow giants such as Mitsui and Mitsubishi have been taking big stakes in water projects in countries from China, the Phillipines and Australia to the Middle East and Latin America, Reuters reported.
Welcome to the water world. The push by Japanese giants follows big new water investments from such international corporate giants as IBM, General Electric (NYSE:GE) and Siemens (SI), which have been applying cash and technological expertise to the field (see Green Light posts here and here and this Bloomberg article for some examples).
Those companies, in turn, are challenging longstanding water industry leaders such as France's Suez (OTC:SZEZY) and Veolia (NYSE:VE), as the Reuters story noted. At the same time, a host of startups are bringing new filtration, purification and desalination technologies to market, along with systems to measure and manage the transport and use of water for farms, homes and industry.
Companies like Sony have their own stake in clean water, Reuters noted – Sony has had to turn to Asahi Kasei group to provide clean water for its factories making circuit boards in central China, after it found itself unable to work with impure water at the site.
Industry's need for clean water could be one of the more lucrative places to start in the water industry, as Peter Gleick, president of the Oakland, Calif.-based nonprofit Pacific Institute, pointed out in a presentation to greentech investors earlier this year.
That's because much of the world's water for homes and farms -– the latter making up the lion's share of global fresh water use – is still priced too cheaply to make large-scale high-tech investment cost effective, he said.
Projects aimed at privatizing public water supply systems also have met backlashes in some countries where they've been implemented. Only about 5 percent of the world's water market has been privatized, Reuters reported.