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Desal, industrial water reuse growth drivers for IDE in India

New Delhi : Israel-based global desalination major IDE Technologies has recently signed an agreement with the Andhra Pradesh Government to set up a seawater desalination plant near Visakhapatnam with an investment of Rs 700 crore.

The proposed desalination plant would have a capacity of 100 million litre per day (MLD) and the company is looking to acquire 20-25 acres of land for it. IDE is considering making the investment for the desalination plant over the next two years through its wholly-owned Indian subsidiary IDE Technology India Pvt Ltd.

Last year, IDE had partnered with Chennai-based Indian major VA Tech Wabag Ltd to bag a Rs 594-crore contract from Chennai Metropolitan Water Supply and Sewerage Board for construction and operation & maintenance (O&M) of a 45 million litre per day (MLD) tertiary treatment plant at Koyambedue, Chennai.

The wastewater recycling project in Chennai would provide local industry with treated wastewater and create an alternate source of water.

Both the large projects mark a slight shift in strategy for the Israeli company - it is now considering pouring money in India to build desalination assets on its own rather than only provide its thermal and RO-based desalination technology to others besides getting into hitherto unexploited areas for it like wastewater treatment.

The company has identified India has a key market with huge growth potential even though it has been caught up in the slowdown in the country. In an informal interview with Girish Chadha of India Water Review, IDE’s Global Sales Director (Eastern Hemisphere) Roni Klein said the Indian market will remain a substantial factor in the company's growth heading to 2020.

The pace of growth for IDE seems to have slowed down in past couple of years in India. There don't seem to be too many large project announcements or contracts. Some of IDE's major industrial desalination customers like Reliance are slowing down. What are the reasons?

IDE's growth pace in India is in line with our plans. Reliance is and will always be IDE's strategic partner; we have installed more than 400 million litre per day (MLD) plants for Reliance in the country.

What is the company's current desalination capacity in India - both in industrial and municipal sectors? What is the planned expansion by 2020 and beyond?

IDE’s installed capacity in India is approximately 650 MLD at the moment. We intend to increase our installed capacity to 1000 MLD by 2020.

India was identified as a major growth area for IDE for expansion of the desalination portfolio. What is the company doing to remain a market leader in the country? Which area is showing more potential for IDE in India - small but multiple industrial projects or large municipal contracts like the one in Chennai?

IDE constantly shares its knowledge with the relevant Indian authorities through dedicated and focused seminars and workshops, as well as visits to our mega-plants in Israel, Tianjin and Carlsbad.

Both municipal and industrial sectors show great potential in India. In the municipal space, the state government takes it upon itself to provide the citizens with potable water (such as in Chennai) while in industrial space, there is tremendous growth under the leadership of Prime Minister Modi, with an increased focus on meeting water needs.

The demand for industrial water is increasing with the pace of industrial development. By 2050, energy generation will require a much larger proportion of water usage. This should further push India toward renewable resources, since thermal power plants are vastly water-intensive and currently account for the highest water usage among all industrial applications. Such water-intensive sectors are becoming increasingly subjected to freshwater consumption regulations, while water reuse is becoming required more often in new refineries and petrochemical plants.

In desalination, which are the major states that IDE is focusing on for both industrial and municipal contracts? Tamil Nadu has announced plans to set up several desalination plants, including at least two more in Chennai. How are things placed in terms of the tendering and the competition and how soon do you expect some projects to materialise?

We hope to see potential new projects in Gujarat, Karnataka, Andhra Pradesh and Maharashtra.

The competition in India is very fierce and IDE, with its vast experience of more than 50 years, is embracing the competition and has proven time and time again that it can beat the competitors both on technology and price.

IDE has been interested in desalination projects from industrial customers in the power sector. After couple of years of slow growth in this sector, are things looking up in terms of business? What are some recent contracts that IDE has bagged in this sector?

IDE prides itself for playing a major part in all business sectors – municipal and industrial (including power, mining, refineries, etc). Indeed the power sector in India has slowed down over the last few years. However, we can definitely see a shift in the trend and we expect it to catch up and grow significantly over the next few years.

IDE had identified wastewater treatment as a potential area of interest in India. With the Ganga rejuvenation programme and the AMRUT/Smart City Mission, there are several wastewater treatment projects that are coming up for bidding. How is IDE looking at this area?

For more than 50 years, IDE has invented and developed new technologies for all types of water treatments, including wastewater and industrial wastewater. We see great potential in these sectors for growing our business moving forward.

High discharge volumes are forcing industrial units to reuse wastewater and resort to zero liquid discharge, which is driving the need for advanced technologies such as reverse osmosis (RO).

To drive up its business in India, IDE is considering coming in as project developer and even initiating projects on its own rather than only competing in bidding process. What is the company's current thinking on this? Has it tied up with foreign financial institutions or its partners for funding projects in India? What kind of projects could these be - large municipal desalination contracts or wastewater projects, or even water treatment and supply projects?

IDE is continuing to develop large desalination projects around the world and we are open to all types of engagements with local construction companies, financial institutions and governments.

What kind of business is the company targeting from India in the current financial year and by 2019-20? Will desalination be the main growth driver for IDE? Which others areas are going to be driving growth for the company in India?

It is very hard to predict the numbers we will generate from our business in India. However, we believe that the Indian market will be a substantial factor in our growth heading to 2020. In India, sustainable options for the future are seawater desalination and industrial water reuse.

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