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Kemira Sees World Water Market At $800 Billion By 2035

Date: 19-Sep-11
Country: UK
Author: Nina Chestney and Henning Gloystein

Kemira Sees World Water Market At $800 Billion By 2035 Photo: Fahad Shadeed
A worker stands at a desalination plant, 35 lm south of Riyadh, May 4, 2011.
Photo: Fahad Shadeed

The global water market could be worth $800 billion by 2035, with Asia making up half that value as rapid economic growth and a rising population boosts demand, the president and chief executive of Finnish chemicals firm Kemira said on Friday.

Some experts foresee the water market hitting $1 trillion by as early as 2020.

"Water is the fastest growing market at the moment, with a size of $500 billion globally," Harri Kerminen said in an interview in London.

"Most of that growth is in South America and Asia. By 2035, we estimate 50 percent of the whole market will be in Asia, and it could be worth $600 to $800 billion," he said.

Kemira changed its strategy in 2008 to focus more on water. Now, 75 percent of its revenue comes from water treatment. It had revenues of 2.2 billion euros last year.

The firm supplies chemical products and systems for water treatment to oil and gas producers, paper and mining firms, as well as municipal water authorities and utilities.

Kemira sees huge opportunities in South America and Asia, which are experiencing rapid economic growth, climate change impacts, rising populations and stricter energy and water regulations.

"The problem is, the water is the wrong quality in the wrong place. Just 1 percent is available for industrial and society use," Kerminen said.

"If nothing is done, there will be a 40 percent gap between supply and demand by 2030."

RE-USE AND INTEGRATE WITH ENERGY

Kerminen said that he saw one of the key growth areas in his sector in the integration of water and energy sectors.

"Water and energy are the two big issues of our times, and there is a lot we can do to combine these two sectors that help us become more efficient," he said.

"In industrial applications, water and energy are always connected."

As examples, Kerminen cited the possibility of turning waste water into drinking water, as well as using the separated waste from it for biomass as an energy source.

"We could also re-use a lot more water than we do at the moment from what is separated from minerals in the mining sector," he added.

Kerminen also said that in the long-term, he saw re-treating waste water as a cheaper way to provide drinking water than desalination, which is very energy intensive.

"But new regulations need to be developed to make sure it is safe," he said.

"At the moment, there is not enough pressure cost-wise so people don't act. But within 10 to 20 years, more of these solutions are needed."

Kemira has invested in a wastewater treatment plant in St Petersburg, Russia, which removes nitrogen and phosphorous from sludge for use in plant production as artificial fertilizers.

Phosphorus is a non-renewable natural resource, which could run out in the next 20-30 years, Kerminen said.

Producing 1 kilogram of phosphorus uses 8 kilowatt hours of energy. Therefore, it is also cost-effective in terms of energy use to recycle the sludge.

SHALE GAS

The company has started to develop water treatment technologies for efficient shale gas extraction in the United States, as well.

Kemira would not disclose its revenue from U.S. shale gas projects but said the firm has "a good number of sales there already."

With 10,000 shale gas fracturing jobs done a year using around 7.5 trillion gallons of water, Kemira's polymers can reduce the amount of energy required to fracture a well by 75 percent.

However, the European shale gas market is more uncertain, and Kerminen said his company was taking a "wait-and-see" approach toward developing a European shale gas business.

Earlier this year, France's parliament approved a bill to ban shale gas drilling due to environmental concerns, while Poland -- seen as a huge prospective shale gas market -- plans stricter production regulations.

A recent study by the U.S. Energy Information Administration showed Poland's recoverable reserves of shale gas could be the biggest in Europe at 5.3 trillion cubic meters.

"We will wait and see how it develops. We will learn in the U.S. first, before moving elsewhere," he said.

(Editing by Jason Neely)

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