Suez Boss Sees Water Becoming More Valuable Than Oil
By Sara Jerome,
@sarmje
Describing the rationale for diving deeper into the industrial water market, the chief executive of water giant Suez Environment is stressing water scarcity as a pressing global problem.
“Governments are saying to industries: ‘you can operate here but you can’t take water from underground,’” Jean-Louis Chaussade told The Financial Times. “Companies will have to rely on wastewater recycling or desalination plants to meet their needs.”
Chaussade predicted growth in the water sector, saying that “the €95bn market for industrial water services was set to expand at an annual rate of 5 percent over the long term — outpacing global economic growth of about 3 percent,” The Financial Times paraphrased. €95bn is equivalent to about $102 billion.
Industrial water is a more important market for Suez than its municipal water businesses, Chaussade said. Suez holds municipal contracts in cities such as Hoboken, NJ, and Bayonne, NJ.
“Industries account for a fifth of global water use compared with 5 percent for humans,” The Financial Times reported, citing Chaussade. Chaussade added that water would “probably” become a more valuable commodity than oil in the future.
Suez made a major move in the industrial water market this month when it teamed up with a Canadian pension fund to buy General Electric's water treatment technology business, known as GE Water, in a deal valued at $3.4 billion, according to The New York Times. The deal would bolster Suez’s footprint in the U.S., according to a press release from Suez.
The agreement also bolsters Suez’s industrial water treatment business, according to Reuters.
“The deal will give Suez access to most major industries globally, including food and beverage, oil and gas, power, mining, pharmaceuticals, and micro-electronics and will make it a supplier to blue-chip companies such as Exxon-Mobil, Total, Shell, BASF, Nestle, Cargill, Intel, Samsung and Pfizer,” the report said.
The agreement requires regulatory approval in the E.U. and the U.S.