Wisconsin Water Presentation (May 2011 Final)

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May 2011 Presentation on potable and wastewater issues and opportunities in Mexico, including detailed market size information

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Wisconsin Water Presentation (May 2011 Final)

  1. 1. Mexico Potable & Wastewater Situation and Opportunities Vincent Lencioni LGA Consulting/Wisconsin Trade Office May 2011 Milwaukee, Wisconsin
  2. 2. LGA Water Focus <ul><li>15+ Years working with Wisconsin companies with products for Mexico public and private water sector </li></ul><ul><ul><li>Market Analysis, Intermediary and Client Searches </li></ul></ul><ul><li>3 years of formal & extensive regional water focus </li></ul><ul><li>Quarterly Mexico Water Report </li></ul><ul><li>Development of Mexican Water Intermediary contacts </li></ul><ul><ul><li>Distributors, Reps, Integrators, EPCs, Consultants </li></ul></ul><ul><ul><li>Winners of Awards, Participants in Bids </li></ul></ul><ul><li>Interaction with Mexican federal and local water officials and intermediaries for early project information </li></ul><ul><li>Monthly compilation & review of water bids & awards </li></ul><ul><li>WWEMA Presentation, Global Committee, Latin America assistance </li></ul><ul><li>Development of AWWA Manufacturers Committee, Mexico City </li></ul><ul><li>Various presentations on Mexico water sector in the US & Mexico </li></ul>
  3. 3. Mexico Water Issues & Challenges <ul><li>1. Geographical Challenges : North (30/87/75) vs South (70/13/25) Altitude, precipitation, population, urban growth issues </li></ul><ul><li>2. Overexploited aquifers : 15%; 10% will be soon </li></ul><ul><li>3. Per Capita Water : 18,000 m3 (1950) to 4,400 m3 (2010) </li></ul><ul><li>BUT: 15,000 South; 1700 Central, only 500 North </li></ul><ul><li>4. Potable/Sewer Coverage : Urban (94/94) vs Rural (79/63) </li></ul><ul><li>5. Water Use : 80% Agri (US: 40%) vs 8% Industrial (US: 46%) </li></ul><ul><li>6. Delivery Systems : 50% losses: Potable (43%), Agri (55%) </li></ul><ul><li>7. Metering : Domestic (“obligatory”, < 2/3) vs Industrial (0%) </li></ul><ul><li>8. Wastewater Treatment : < 40% Municipal; < 20% Industrial </li></ul>
  4. 4. Mexico Water Goals: 2012 & 2012 <ul><li>5 Year Plan (2007-2012) </li></ul><ul><ul><li>Potable water coverage: 92% </li></ul></ul><ul><ul><ul><li>Current: 91% </li></ul></ul></ul><ul><ul><li>Sanitary/sewer coverage: 88% </li></ul></ul><ul><ul><ul><li>Current: 87% </li></ul></ul></ul><ul><ul><li>Wastewater treatment: 60% </li></ul></ul><ul><ul><ul><li>Current: 40% (may be) </li></ul></ul></ul><ul><ul><li>Rehabilitate 500 Dams </li></ul></ul><ul><ul><ul><li>Current: 420; 750 by 2030 </li></ul></ul></ul><ul><ul><li>8% increase: utility efficiency </li></ul></ul><ul><ul><li>Improve Water Productivity in the Agricultural Sector </li></ul></ul><ul><ul><li>Better flood prevention actions </li></ul></ul><ul><li>2030 Water Agenda </li></ul><ul><ul><li>By 2016: all major urban areas free from risk of flood </li></ul></ul><ul><ul><li>By 2015, All Irrigation technified, 100% water reuse </li></ul></ul><ul><ul><li>2024: Complete rural potable water and sewage access </li></ul></ul><ul><ul><li>2025: All Industrial and Municipal wastewater treated </li></ul></ul><ul><ul><li>2030: All aquifers and contamination in balance </li></ul></ul><ul><ul><li>From 64th in water infrastructure to between Panama (46) & Chile (35). </li></ul></ul>
  5. 5. Water & Wastewater Regulations <ul><li>Wastewater Regulations </li></ul><ul><ul><li>By where water goes: </li></ul></ul><ul><ul><ul><li>NOM 001: Federal bodies </li></ul></ul></ul><ul><ul><ul><ul><li>Rivers, Lakes, Coasts </li></ul></ul></ul></ul><ul><ul><ul><ul><li>All towns > 2500 inhabs (2600+) & all companies </li></ul></ul></ul></ul><ul><ul><ul><li>NOM 002: Municipal </li></ul></ul></ul><ul><ul><ul><ul><li>Sewer/Drainage System </li></ul></ul></ul></ul><ul><ul><ul><li>Translations Available </li></ul></ul></ul><ul><ul><li>Discharge “Rights” Fees </li></ul></ul><ul><ul><ul><li>If NOM 001: Federal Fees </li></ul></ul></ul><ul><ul><ul><li>If NOM 002: Local Fees </li></ul></ul></ul><ul><ul><li>By Reuse </li></ul></ul><ul><ul><ul><li>NOM 003 = Water Reuse </li></ul></ul></ul><ul><ul><ul><li>NOM 004 = Sludge/Mud </li></ul></ul></ul><ul><li>Water Regulations </li></ul><ul><ul><li>NOM 127 </li></ul></ul><ul><ul><ul><li>Water quality and disinfection rules; treatment options </li></ul></ul></ul><ul><ul><li>NOM 179 </li></ul></ul><ul><ul><ul><li>Monitoring/sampling </li></ul></ul></ul><ul><ul><li>NOM 230 </li></ul></ul><ul><ul><ul><li>Storage rules, samples, sanitary restrictions </li></ul></ul></ul><ul><li>Challenges </li></ul><ul><ul><li>Metering, Leakage, bottled water trend, enforcement issues </li></ul></ul>
  6. 6. Municipal Wastewater Plants <ul><li>2010: How Much/Where </li></ul><ul><ul><li>43.4% Waste Treated </li></ul></ul><ul><ul><ul><li>200% increase since 1992 </li></ul></ul></ul><ul><ul><ul><li>100% Increase since 2000 </li></ul></ul></ul><ul><ul><li>Treatment capacity need: 196m3 = 71m3 deficit </li></ul></ul><ul><ul><ul><li>25% capacity increase since 2006 </li></ul></ul></ul><ul><ul><ul><li>Flow Increase: 5% annual </li></ul></ul></ul><ul><ul><li>Treatment Areas </li></ul></ul><ul><ul><ul><li>North > 50% treatment </li></ul></ul></ul><ul><ul><ul><li>Center: 33% treatment </li></ul></ul></ul><ul><ul><ul><li>48% Treatment in Río Bravo/Lerma Basins </li></ul></ul></ul>
  7. 7. Municipal Treatment Opportunities <ul><li>2011 Budget and Plant Projects </li></ul><ul><ul><li>Budget: </li></ul></ul><ul><ul><li>New: 50 Plants, another 50 expected: Rehab: 43% Plants ($225 million) </li></ul></ul><ul><ul><li>2012 - Should be equal or better than 2011 – Year before Presidential Elections </li></ul></ul><ul><ul><li>2013 – New Presidential Administration: considerable slow down / adjustments </li></ul></ul><ul><li>“ In Vogue” Treatment Processes / Tendencies </li></ul><ul><ul><li>90% of Municipal Treatment in six categories: </li></ul></ul><ul><ul><ul><li>Sludge = 46% treatment (546 Plants); Stabilization Ponds = 16% treatment (707 Plants); Advanced Primary = 10% treatment (16 Plants); Aerated Ponds = 8% treatment (32 Plants); Dual Plants (10) & Biological Filters (97) = 10% treatment </li></ul></ul></ul><ul><ul><ul><li>Plants with significant numbers but low treatment: RAFA/WASB (162), Wetlands (160) </li></ul></ul></ul><ul><ul><li>New Plants and Plant Growth (2008 to 2009) </li></ul></ul><ul><ul><ul><li>1. Biological Filters (55, up 100%+); 2. Aerated Ponds (up 33%); </li></ul></ul></ul><ul><ul><ul><li>3. Sludge (92, up 20%); 4. Wetlands (26, Up 20%) </li></ul></ul></ul><ul><ul><li>Info on state preferences for treatment technology (see LGA Consulting website) </li></ul></ul><ul><ul><li>Problem – Physical/Chemical used over Biological – driven by upfront costs </li></ul></ul><ul><li>Medium Size/2nd Tier Cities: Next/Current Targets </li></ul><ul><ul><li>8 Cities: 2.5 to 1 million; 20 Cities > 750,000; 30 Cities > 500,000; 45 Cities > 250,000; Over 60 Cities > 100,000 population. </li></ul></ul><ul><li>Market Size: 5 models/scenarios : $220-546 Million; $357 Million (Median) </li></ul>
  8. 8. Industrial Wastewater Treated: Not good but better than seems Up 66% since 1999 Industrial Wastewater since 1997 : Flow up 195% (64.5 to 190m3 p/s) Treated amount up 592% (5.3 to 36.7m3 p/s) Wastewater/BOD Treatment up 137.5% compared to flow (8% to 19%)
  9. 9. Industrial Sectors – Problems * = Expected Investment 2011-2012 ( US Embassy, Mexico City ) 4. Chemicals / Pharmaceuticals / Plastics - $120 million US* 4. Food & Beverage / Dairy - $90 million US* 3. Petroleum / Petrochemical (Pemex) – Increasing investments in wastewater 3. Metalworking / Automotive – Large & Growing, Tier 1 & 2 issues, OEM compliant 2. Textile / Clothing / Leather – $70 million US*; many medium & small producers who are not compliant 2. Paper - $70 million US* - Highly regulated, improved Mfging processes, maintenance 1. Pork / Agriculture / Aquaculture – Target area for enforcement, Conagua investment increases. Problems worse than expected 1. Sugar – Requires regular, on-going investments even though meeting standards. High Frequency & Flow Priorities Top Priorities, heaviest polluters (2030)
  10. 10. Industrial Wastewater Opportunities <ul><li>Commercial & Industrial – Traditional Wastewater </li></ul><ul><ul><li>Types of Plants & Technologies </li></ul></ul><ul><ul><ul><li>Secondary Strong - Activated Sludge, Aeration Lagoons, Extended Aeration </li></ul></ul></ul><ul><ul><ul><li>Tertiary low but growing (2009: 66 Plants; 2010: 88 Plants = 25 a year?) </li></ul></ul></ul><ul><li>Industry Water Reuse & Savings </li></ul><ul><ul><ul><li>Water reclamation, water capturing systems more important with industrial water price increases </li></ul></ul></ul><ul><li>Infrastructure Projects </li></ul><ul><ul><ul><li>Resorts: Hotels and Restaurants, Residential and Golf Courses </li></ul></ul></ul><ul><ul><ul><li>100 New plants (2011-2014) </li></ul></ul></ul><ul><li>States & Cities with best enforcement reputations </li></ul><ul><ul><ul><li>D.F., Monterrey, Chihuahua, Guanajuato, AGS, Queretaro </li></ul></ul></ul><ul><ul><ul><li>173 Cities participating in PROSANEAR Program </li></ul></ul></ul><ul><li>Market Size Estimate: $110-$350 M; Median: $285 M </li></ul><ul><ul><li>Industrial & Municipal Wastewater Markets > $500 M </li></ul></ul>
  11. 11. Potable & Sewerage Coverage <ul><li>Potable: 91% </li></ul><ul><ul><li>2012 : 92%; 2030 : 100 </li></ul></ul><ul><ul><li>Urban: 95 (05), 94 (09) </li></ul></ul><ul><ul><li>Rural: 72 (05), 79 (09) </li></ul></ul><ul><ul><ul><li>90: 51%, 2000: 68% </li></ul></ul></ul><ul><ul><li>8 states (25%) < 90% </li></ul></ul><ul><ul><li>Veracruz, Guerrero < 80% </li></ul></ul><ul><li>“ Non-Drinking” Challenge </li></ul><ul><ul><li>Bottled water tendency </li></ul></ul><ul><li>Delivery System Pollution </li></ul><ul><li>Sewerage: 87% </li></ul><ul><ul><li>2012 : 88%; 2030 : 100 </li></ul></ul><ul><ul><li>Urban: 89 (05), 94 (09) </li></ul></ul><ul><ul><li>Rural: 58 (05), 63 (09) </li></ul></ul><ul><ul><ul><li>90: 18%, 2000: 37% </li></ul></ul></ul><ul><ul><li>7 states (15%) < 80% </li></ul></ul><ul><ul><li>19 states (60%) < 90% </li></ul></ul><ul><li>System Competitiveness </li></ul><ul><ul><li>20% < Latam standard </li></ul></ul><ul><ul><ul><li>Just below Peru </li></ul></ul></ul>
  12. 12. Other Clean Water Issues <ul><li>Potable Plants: 650+ </li></ul><ul><ul><li>2/3 Convention Clarification </li></ul></ul><ul><ul><li>90 m3/second treatment </li></ul></ul><ul><li>Disinfection Coverage </li></ul><ul><ul><li>1991: 84%; 2009: 97% </li></ul></ul><ul><li>Infectuous Diseases </li></ul><ul><ul><li>Increased Problems with Tyfoid, Salmonela </li></ul></ul><ul><li>Water Monitoring </li></ul><ul><ul><li>1500: Subterr/Bodies </li></ul></ul><ul><ul><li>2000:BOD, COD, TSS </li></ul></ul><ul><li>Aqueducts </li></ul><ul><ul><li>Veracruz, Cutzamala, Nuevo Leon, Jalisco </li></ul></ul><ul><li>Dams & Reservoirs </li></ul><ul><ul><li>Rehabs: 420 to 750 </li></ul></ul><ul><li>Hydroagriculture </li></ul><ul><ul><li>Inefficient / Low fees </li></ul></ul><ul><li>Altitude Challenges </li></ul><ul><ul><li>1600 to 2700 meters </li></ul></ul><ul><li>Aquifer Replacement & Water Reclamation </li></ul>
  13. 13. Clean Water Opportunities <ul><li>Municipal – Low Prices, Non-Drinkage Challenges </li></ul><ul><ul><li>Total Water Budget: $6 Billion US; Federal Budget: $3 Billion US </li></ul></ul><ul><ul><ul><li>80% for urban projects; 62% given to State and Municipal governments </li></ul></ul></ul><ul><ul><ul><li>50% for Potable (40%), Sewerage (50%), and Treatment Projects(10%); </li></ul></ul></ul><ul><ul><ul><li>20% for HydroAgriculture Projects, up 60% in recent years and should continue to increase </li></ul></ul></ul><ul><ul><ul><li>Spending Increases: Since 2002: 250%; Since 2007: 70%; Spending increases expected </li></ul></ul></ul><ul><ul><li>“ In Vogue” Technologies </li></ul></ul><ul><ul><ul><li>Convention Clarification </li></ul></ul></ul><ul><ul><ul><li>Others: Direct Filtration (15-20% treated, 10% plants); Patent Clarification (7% treated, 20% Plants); Reverse Osmosis (<5% treated, 30% Plants) </li></ul></ul></ul><ul><ul><ul><li>Minor Presence: Slow Filters, Iron & Manganese, Blandment, Absorption </li></ul></ul></ul><ul><ul><li>Needs: Monitoring, Delivery System Leakage, Water Efficiency (Agri), Metering, Aquifer restoration, Flooding, Reclamation, Testing </li></ul></ul><ul><ul><li>Northern and Central state focus – Scarcity and Aquifer Depletion and Advanced Culture </li></ul></ul><ul><li>Industrial – Higher Prices, Greater Need, easier targets </li></ul><ul><ul><li>Some but lower clean water & high purity demand: 46% vs 8% </li></ul></ul><ul><ul><li>High use: Paper, Sugar, Agriculture, F&B, Chemicals </li></ul></ul><ul><li>Total Market Size Estimate: Harder to Establish than wastewater </li></ul>
  14. 14. Tips for Mexico Opportunities <ul><li>Get in/stay in, despite insecurity concerns </li></ul><ul><ul><li>Demand Up : Economic Growth & Funding Up </li></ul></ul><ul><ul><ul><li>Water Sector: 70% Imported, 2/3 from the US </li></ul></ul></ul><ul><ul><ul><li>Municipal : 2011 and 2012 up; 2013 down </li></ul></ul></ul><ul><ul><ul><li>Industrial : Locate proactive states/cities: target companies </li></ul></ul></ul><ul><li>Find in-country sales support….. </li></ul><ul><ul><li>Ideally: Sales Staff or Rep + Integrators </li></ul></ul><ul><ul><li>Distributors – Viable in Private, not in Public </li></ul></ul><ul><li>… but don`t rely solely on intemediaries for market analysis or business development </li></ul><ul><li>Bring financing/credit plan: Private > Public </li></ul>

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