Water in emerging markets

Steve Leung, Senior Vice President & President, Emerging Markets, Xylem

Q: What are some of the issues you see in emerging markets? 

SL: You can almost see the disparity of two different market segments here in Asia — emerging markets and mature ones. For example, you see Singapore in the forefront in trying out new technology and using technology as a mean of solving their water challenges. Similarly, China has pretty high-end sophisticated wastewater management systems such as the drinking water facilities in coastal cities like Shanghai, Beijing and Guangzhou. But on the other hand, you also see other less developed or much less developed Asian countries that are struggling to provide accessible drinking water to most of their population.

In order to address the issues, there’s a basic fundamental, which is to work with the local municipal government to understand what’s needed. And in some cases, we even customise solutions for them. Overall, I think the challenge is due to aging infrastructure which causes high non-revenue water on the whole distribution network and impacts treatment capability. For example, in India, there’s a lot of investments now focused on enhancing the treatment capability of the country so that they can treat more wastewater. I think it’s very promising for the market and from an opportunity perspective.

Q: Do you think the emerging markets in Asia are working fast to address these issues and how is Xylem helping?

SL: I believe that for most of the Asian countries, the government is aware. But there is always the constraint on funding which can affect projects.

In many cases, governments look for collaborations — a different funding model — like the PPP (Public private partnership). For example, the Asian Development Bank, Infrastructure Development Bank and Africa Development Bank. They have similar funding models available for infrastructure. So, this is an avenue that the government can pursue. The good news is I’ve never encountered any municipalities or government officials who are not aware of the challenges.

From Xylem’s side, we can provide a sustainable and cost-effective solution. At the end of the day, it is all about energy savings and efficiency. We are able to help in reducing non-revenue water in the network.

Q: Do you think the current technology is good enough to address a lot of these issues?

SL: There is debate whether existing technologies are adequate in addressing these issues. There are a lot of existing technologies for which I think the take up can be be faster in order to address the issues. The water industry, in general, is a pretty conservative industry. But this is partly because water can be, to some extent, a life and death situation. You really need to be sure that it is safe to drink, reasonably priced and can be deployed on a massive scale.

There are a lot of constraints and considerations so the government and the people have to be careful. Overall, I think the technology is available and if the industry can be a little more aggressive, we can move faster. If they can jointly collaborate, even better. I think that will probably accelerate the process.

Q: In terms of technology take up, do you think Asia is fast in moving forward with it?

SL: I think it’s moving quite fast. Even when the take up is very fast, it still takes time. The good news is when you have a new technology and you are in an emerging market, regulation is less of a factor in technology adoption. In a mature market, more complex regulatory conditions can make the introduction of new technologies slower. So, in the emerging markets, implementation of new technology can actually have a fast uptake if we have the right approach.

Q: What makes Xylem different from the other companies in helping its customers to resolve challenges?

SL: Our company is almost 100 per cent dedicated to the water industry. A lot of the customers’ feedback is, “You guys are different because you are passionate about water.” Many of the companies approach the customers with a focus very much on the project or the product, but we really listen and understand what the issue is. I think that makes us different in the market.