No. 97: Water business in Japan and the world (16) (October 15, 2011)

Growing markets in the water business

According to the estimates by the Ministry of Economy, Trade and Industry, East Asia and Oceania are the two leading markets in the water business at present, and they are expected to maintain the current growth rate for the next 20 years. In terms of growth rate, the Middle East, North Africa, and South Asia will maintain a growth rate of more than 10%. China, India, and Saudi Arabia are noteworthy in terms of market size and growth rate.

China has a population of 1.3 billion that is about 20% of the world population, but it has only about 6% of water resources on the earth. Because of the growing population and increasing living standard, the depletion of water resources and pollution of water quality are developing rapidly China. Water shortage is rather serious in the northern part of the country, and the Chinese government is promoting a national project to draw water from the southern part to the northern part through a waterway. It is also actively addressing the water-related issues including reuse of sewage and desalination of seawater. It is making lots of efforts to foster domestic companies in the water business, while promoting collaborations between Chinese companies and foreign companies. The Chinese market is expected to grow to be the world’s largest market in water business in 2025, accounting for 15% of the world market.

The same story can be applied to India. India’s population accounts for 16% of the world population, but it has only about 4% of water resources on the earth. The water business is expected to grow with the economic growth in India. However, it still has lots of entry barriers including complicated regulations and disputes between regions over the distribution of water resources.

The Middle East and North Africa have the lowest per-capita water resources in the world because of low rainfall and scarce rivers. Actually, salination of seawater mostly satisfies water demand in these regions, and the needs for salination of seawater will grow further. In addition, large-scale desalination plants built after the 1980s will need renovation shortly, and demand for sewage treatment will grow bigger there. Companies planning to expand business in them are required to develop a packaged service that can satisfy various needs. (To be continued)