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Working around the world to close the loop in the water cycle and enable the efficient use of precious water resources

October 2013

Growing demand and tightening supply of water

In Japan, water has long been taken for granted: as the saying goes, "Water and safety are virtually free." Considering the widespread consumption of bottled water in the country today, it is difficult to continue to think of water as being free. Still, people in Japan have an unquestioning faith that if you turn on the tap, water will flow out of it. If we look at water usage around the world, however, it becomes readily apparent that the situation in Japan is far from the norm.

The majority of the Earth's water resources consist of seawater, with fresh water representing only 3 percent. When it comes to water that is usable by humans, the figure plummets to 0.01 percent. What's more, there are no alternatives to existing water resources. These resources are unevenly distributed around the world and appropriate infrastructure is required in order to access them. Such background factors are the reason for water shortages in some regions of the world, particularly the Middle East, North Africa, and Asia.
As a result of increasing populations and accelerating urbanization and industrialization, water demands have been growing continuously while the capacity of the environment to supply safe and sanitary water has been deteriorating. Given this, water security is expected to become an even more serious issue in the coming years. Reflecting this recognition, the water sector's attempts to find solutions to water shortages have been drawing global attention since the early 2000s. This heightened attention is of course reflecting growing awareness among industrialized nations that it is their responsibility to help developing countries achieve a safe and hygienic living environment.

Sumitomo Corporation intends to foster the water service business and develop it into one of the profitable businesses of the Environment & Infrastructure business unit in the future. We have already achieved successful results in the BOOT/BOO-based water business, which includes water supply, wastewater treatment and seawater desalination projects, in regions in which demand for water is soaring and in other promising water utilities markets around the world. In 2013, we further expanded our scope of business by participating in the water concession business. Through this global and multifaceted approach to the water service business, we are endeavoring to solve water-related issues, which are becoming serious around the world.

Sewage treatment facilities in Mexico

Water treatment facilities in Izmit, Turkey

Aspiring to become an integrated water/environment business company

Sumitomo Corporation is currently providing water supply and sewage services to more than 3 million people in the UK, the Middle East, Mexico, Asian countries including China, among others.

In order to contribute to solving water-related issues, the water sector, ourselves included, needs to focus its efforts not only on developing the water supply systems indispensable to our daily lives, but also on sewer systems, an area which generally lags behind relatively well-developed water supply systems. Sumitomo Corporation entered the wastewater treatment market in 2004, when we launched a joint project in Mexico with Degrémont S.A., a major France-based water service company. Leveraging the combination of Degrémont's extensive experience and expertise in water facilities operations and Sumitomo's strengths in coordinating finance and other overall project elements along with its international network, the project to recycle wastewater for agricultural and industrial use has been helping improve the local living environment and develop local communities.

In February 2013, we acquired all shares of Sutton & East Surrey Water plc (hereafter, SESW), a water only supply and distribution company in the UK, with the aim of fully participating in a concession business for public water and sewerage services, a business expected to grow significantly in the years to come. In October of the same year, we began to operate SESW jointly with Osaka Gas Co., Ltd. We will endeavor to build SESW into a better company by combining our experience in the water service business with Osaka Gas' expertise developed in the city gas sector in Japan, particularly in the area of customer service improvement as well as management and maintenance of gas pipes. Utilizing the know-how gained through this experience, we will not only engage in other concession business activities but also provide a variety of services that help to improve the water environment.

Water treatment facilities of SESW in England

Toward a better water environment in the world's two most populous nations

Sumitomo Corporation has started or is planning to launch water infrastructure projects in countries where rapid economic growth has spurred demand for more water utilities such as China, India, and Southeast Asian countries, and in regions facing dire water shortages such as the Middle East and North Africa.

In China, we entered into a business alliance with the country's largest water company, Beijing Capital Co., Ltd. As the initial project under the partnership, we are conducting a joint wastewater treatment business in China. In contrast with the rapid pace of the country's economic growth, China has a limited availability of sanitary sewer systems. In another rapidly growing country, India, we have also formed an alliance, this time with VA TECH WABAG, Ltd, an India-based water service giant, to operate joint projects in India and even the Middle East. By leveraging WABAG's technological strength and competitive edge, we have successfully participated in an independent water project (IWP) undertaken in Oman in which reverse osmosis is used to desalinate seawater (desalination amount per day: approx. 190,000 tons).
In China and India, the world's first and second most populous nations, the water utilities sector not only has huge business potential but also has an important role to play in improving quality of life.

Conceptual drawing of a desalination plant to be constructed in Oman

Developing water recycling systems by way of public and private partnerships

In Japan, water supply and sewerage is usually undertaken by local governments, which boast world-class skills and technologies for operating, managing, and maintaining water and wastewater treatment plants and water and sewer pipes, achieving low water leakage rates, and reusing treated wastewater, among others. Sumitomo Corporation is seeking to help provide greater access to safe and sanitary water in countries facing water shortages by offering an integrated solution that combines the know-how of Japanese local government outfits with the technologies of the private sector and our own integrated capabilities as a Sogo Shosha (trading company) together into a single package. To this end, we have already taken the first step by launching a project in Malaysia in cooperation with the Tokyo Metropolitan Government (TMG).

Establishing water recycling systems, as well as sewerage systems for maintaining a hygienic water environment, is the key to achieving the effective use of water resources. However, many developing countries, which are focused on rapid economic development, do not have such recycling systems in place due to the lack of a sufficient number of sewage treatment facilities. Mobilizing the know-how and capabilities of TMG and Sumitomo, we have been working to provide an integrated solution to this issue, envisioning cities in Southeast Asia having tap water that is just as clean and safe as Japan's in the next 10 years.
This joint initiative in Malaysia has been attracting a lot of attention from a wide spectrum of communities and is being hailed as a highly meaningful project toward creating a safe and hygienic living environment for the country's residents.

Sewage treatment facilities in San Luis Potosi, in central Mexico

Enhancing business functions and contributing to society through the development and operation of optimal water infrastructure

The global water utilities market should expect to see the increasingly greater participation of the private sector. In other words, an increasing number of projects and services that were traditionally run by government organizations are likely to be entrusted to the private sector. In this context, we believe that an integrated approach—combining the experience and expertise in infrastructure construction and operation of Japanese local governments and public utility enterprises with the technological excellence and capital of private enterprises--that supports individual countries' plans for developing water supply and sewerage systems will serve to improve their water infrastructure. Sumitomo Corporation aims to play a vital role in leading such initiatives by fully drawing upon the global network and business expertise and capabilities it has developed over the years as well as business functions it acquired through M&As and business alliances. As we move forward, the joint initiative with TMG and collaboration with Osaka Gas will be followed by many other projects in other countries and regions under which we will offer integrated solutions based on public and private collaboration to develop and operate water supply and sewerage systems. We are committed to creating optimal water recycling systems, providing stable services, and creating a safe and sanitary water environment.

Related Tag

  • Environment & Infrastructure Business Unit
  • Oman / Malaysia / Mexico / U.K.
  • Environment

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