Sewage increase expected to drive water treatment contracts

The increase in the need for water treatment in cities overwhelmed with sewage is boosting the profits of one major builder of the facilities, it has been claimed.

A Tech Wabag Ltd, which is currently India's biggest builder of water treatment plants, has revealed that it expects sales to beat forecasts by rising as much as 20 per cent a year to cope with growing demand.

The company, which is based in Chennai, is a former unit of Siemens AG and has seen orders to build water-cleaning plants rise by 36 per cent this year.

This has included the construction of a solar polysilicon factory in Qatar and a petrochemical plant owned by Reliance Industries Ltd.

In an interview with Business Week, managing director Rajiv Mittal said India is leading sector growth as a result of contracts being signed with municipalities that are currently struggling with clean water shortages and an "inundation" of sewage.

He pointed out that domestic sales jumped 35 per cent in the last year, and this trend could be set to continue for the foreseeable future.

Currently, India is planning a prolonged period of investment in sewage infrastructure to combat the acute shortage of water and growing needs.

Mr Mittal said that demand for clean water is forecast to exceed supply by as much as 50 per cent by 2030, while pollution levels mean that water that was previously fit for human consumption and industrial or agricultural use is no longer so.

"In India, infrastructure always follows the demand," he explained, noting that, although Bloomberg has forecast group revenue will rise by 14 per cent this financial year, this will be closer to 15 to 20 per cent.

"We're absolutely on target for that kind of growth. The top line will always be driven by municipal demand in India, just because there's so much need," he added.