Water and Wastewater Export Market Plan—–

U.S. DEPARTMENT OF COMMERCE

International Trade Administration

Washington, D.C.

August 2002

Water and

Wastewater

Technologies

Export Market Plan
–—U.S. Department of Commerce, International Trade Administration

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Water and wastewater technologies export market plan.

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 2002073561
 Water and Wastewater Export Market Plan—–

Executive Summary v

1. Overview of the Global Market for Water and Wastewater Technologies 1

Market Size and Characteristics 3

Trends Affecting the Water and Wastewater Industry 6

2. U.S. Competitive Position in the Market 10

Major Foreign Competitors . 10

 Competitiveness by Market Segment 13

3. Increasing Competitiveness of the U.S. Water Industry 17

Understanding Local Markets 17

Positioning to Enter the Market 19

Funding and Financing Options 22

4. Best Prospects in Water and Wastewater Treatment .—.—.—.—.—.—.—.—.—.—.—.—.—.—. 28

 Australia .—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—. 30

Brazil .—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—. 32

People’s Republic of China .—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—. 34

Egypt .—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—.—. 40

India —.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—.—. 43

Japan .—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—.—. 47

Mexico .—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—.—. 49

Republic of Korea (South Korea) .—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—. 54

Saudi Arabia .—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—.—. 56

Spain—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—.—. . 59

Taiwan —.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—.—. 60

United Kingdom —.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.— .—.—.—.—.—.—. 62

Appendices

Appendix A: Major International Water and Wastewater Projects .—.—.—.—.—.—.—.—.—.—. . 65

Appendix B: Government and Industry Contact List.—.—.—.—.—.—.—.—.—.—.— .—.—.—. . 74

Appendix C: Water and Wastewater Industry Trade Associations .—.—.—.—.—.—.—.—.—.—. . 78

Appendix D: International Programs Affecting the Water and Wastewater Industry .—.—.—.—.—.—. 80

Appendix E: U.S. Environmental Trade Working Group Contacts .—.—.—.—.—.—.—.—.—.—. . 86

Appendix F: Helpful Documents .—.—.—.—.—.—.—.—.—.— .—.—.—.—. . .—.—.—.—. 88

Appendix G: Water Equipment HTS Numbers .—.—.—.—.—.—.—.—.—.— .—.—.—.—.—. . 89

Appendix H: U.S. Exports of Water Equipment by Country, 1996–2000 .—.—.—.—.—.—.—.—.—. 90

Appendix I: Water Equipment Exports by HS Number, 1996–2000 .—.—.—.—.—.—.—.—.—.—. 95

Appendix J: U.S. Imports of Water Equipment by Country, 1996–2000 .—.—.—.—.—.—.—.—.—. 96

Appendix K: U.S. Imports of Water Equipment by HS Number, 1996–2000 .—.—.—.—.—.—.—.—. 100

Contents

iii

.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—

.—.—.—.—.—.—.—.—.—.—

.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.

—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.

.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.

.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.

.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.

.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.

—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.

.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—. .

.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.—.
iv–—U.S. Department of Commerce, International Trade Administration

Abbreviations and Acronyms

ADB Asian Development Bank

AfDB African Development Bank

APAZU National Program for Potable Water and

Sewerage in Urban Zones

ASEAN Association of Southeast Asian Nations

BECC Border Environment Cooperation

Commission

BOT Build-operate-transfer

BOO Build-own-operate

B2B business-to-business

B2C business-to-consumer

CNA National Water Commission

DACON Data on Consulting Firms

DCA Development Credit Authority

EBI Environmental Business International

EBRD European Bank for Reconstruction and

Development

EEAA Egyptian Environmental Affairs Agency

EPA Environmental Protection Agency

EU European Union

Ex-Im Bank Export-Import Bank of the United States

GEF Global Environment Facility

GEEMF I and II Global Environment Emerging Markets

Funds

HS Harmonized Commodity Description and

Coding System

HTS Harmonized Tariff Schedule

IBRD International Bank for Reconstruction and

Development

IDA International Development Agency

IDB Inter-American Development Bank

IDBI Industrial Development Bank of India

IFC International Finance Corporation

IFCI Industrial Finance Corporation of India

IMF International Monetary Fund

IRBI Industrial Reconstruction Bank of India

JETRO Japan External Trade Organization

KOWACO Korea Water Resources Corporation

LIFE Lemna Infrastructure Financing Enterprise

MHUNC Ministry of Housing Utilities and New

Communities (Egypt)

MIGA Multilateral Investment Guarantee Agency

MPWWR Ministry of Public Works and Water

Resources (Egypt)

m3 cubic meters

n.a. not available

NGO non-governmental organization

NADBank North American Development Bank

NAFTA North American Free Trade Agreement

OECD Organization for Economic Cooperation and

Development

OPIC Overseas Private Investment Corporation

PEFCO Private Export Funding Corporation

PVC polyvinyl chloride

RMB yuan renminbi (Chinese currency)

SBA U.S. Small Business Administration

SWCC Saline Water Conversion Corporation

TDA U.S. Trade and Development Agency

TIFA Trade and Investment Framework Agreement

UNDP United Nations Development Program

US-AEP U.S.-Asia Environmental Partnership

USAID U.S. Agency for International Development

UV ultraviolet

WB World Bank

WTO World Trade Organization

Note: Unless otherwise noted, dollar figures given are U.S. dollars.
 Water and Wastewater Export Market Plan—– v

Executive Summary

This report is designed to serve as a guide for U.S. exporters of water and wastewater technologies and services and focuses on two segments of the water market:

1. Water equipment and chemicals: equipment,

supplies, and maintenance for the delivery and

treatment of water and wastewater.

2. Engineering and construction services: engineering, construction, design, management, operation

and maintenance, etc.

Over 300 private U.S. companies export filters, pumps,

valves, pipes, instruments, and other equipment, as well

as chemical and biological products for water and wastewater treatment. There are several hundred water engineering and consulting firms in the United States, many

of which offer their services internationally. By concentrating on the market segments where U.S. industry is

most competitive, this report aims to engage more water

and wastewater technology firms in exporting their products overseas.

The Market

The global water market has been growing rapidly over

the last decade and constitutes well over a third of the

global environmental market. Market pricing, combined

with the growing privatization of water and wastewater

utilities, generates private capital to create and maintain

rational water markets. The market is enhanced by more

consistent enforcement of environmental regulations,

worldwide consolidation of the water industry, and the

proliferation of e-business. The global market for water

and wastewater equipment and chemicals was about $42

billion in 1998. The market is expected to grow at a 4

percent rate over the next two years and reach almost

$47.3 billion by 2002.

The United States, Western Europe, and Japan represent over 80 percent of the total market size, but those

are mature markets with an average growth of 3-4 percent. The economic recovery of emerging markets in

Southeast Asia and Latin America from the 1997 crisis,

rapid expansion of the Chinese economy, and increasing

demand in the Middle East promise a return to the 10 to

20 percent pre-1997 market growth in the developing

world.

The major players in the global water and wastewater

industry come from the United States, France, Britain,

Japan, and Germany. Integrated, global companies based

in France (Vivendi, Lyonnaise des Eaux) generally have

a competitive edge over U.S. firms, which are mostly

smaller and more specialized. European water companies that have more experience in operating and serving

privatized or partially privatized facilities have a competitive edge in emerging markets where water and wastewater sectors are undergoing privatization.

U.S. companies are major exporters of water and

wastewater equipment and chemicals. Many U.S. firms

produce specialty equipment that is not available from

other suppliers, which gives them a competitive edge in

certain niche markets. U.S. companies frequently find

industrial wastewater projects and projects funded by U.S.

development agencies.

In the area of water and wastewater treatment works,

the market is dominated by French and British companies. In particular, companies from France and the United

Kingdom are by far the most competitive in providing

integrated packages of designing, building, managing,

and even owning water infrastructures around the world.

Strategies to Improve U.S. Industry

Competitiveness

In order to succeed in the international market for water

and wastewater technologies and services, U.S. firms

should be aware of the realities of doing business overseas, know and be able to take advantage of particular

market characteristics, and use available information

support services.

According to environmental exporters, key success

factors in overseas markets include:
vi –—U.S. Department of Commerce, International Trade Administration

 Understanding local markets. The first step in a

successful export market strategy is knowing where

the markets are and how to access them. Knowing the

stage and pace of market development, host government regulations, and the local business culture is

critical in prioritizing business development efforts.

 Building alliances and working effectively with

partners in export countries. Local partnerships and

representation are desirable for U.S. companies so that

they can learn about attractive market opportunities

before the competitors. Methods for developing a local

presence range from hiring a local consultant or agent

to represent the firm, to establishing a local office or

a joint venture. Engaging in joint exporting activities

(through joint ventures and consortia) with other U.S.

firms is another way to enter a new market.

 Finding financing for export activities. Development

assistance is a primary driver in the water and

wastewater sectors of emerging market countries.

Multilateral development agencies strongly support,

through technical and financial assistance, water

supply infrastructure, wastewater treatment systems,

and watershed clean-up projects, representing

significant market opportunities. U.S. technology and

services companies also can take advantage of

many U.S. investment and export credit programs.

Commercial financing sources include private

investment funds, U.S. and local commercial banks,

and vendor financing.

Table 1. Water and Wastewater Markets of 12 “Best Prospect” Countries

Total Market Size Annual Growth Share of Imports U.S. Import Market Share

Country (millions of dollars) (percent) (percent) (percent)

Australia 603 (1999) 7 70 55

Brazil 1,700 (1998) 10 20 35

China (including Hong Kong) 5,336 (1999) 25–35 35 12

Egypt 856 (1998) 10 90 35

India 1,180 (2000) 15 40 25

Japan 6,000 (1996) 5–8 n.a. n.a.

South Korea 3,400 (2000) 13 40 20

Mexico 2,390 (2000) 10 80 70

Saudi Arabia* 357 (1998) 5 85 16

Spain 4,000 (1998) n.a. n.a. n.a.

Taiwan 1,900 (1999) 9 75 28

United Kingdom 4,000 (2000) 4 55 25

* The data for Saudi Arabia only address the desalination market.

n.a. = not available

See Chapter 4, “Best Prospects in Water and Wastewater Treatment,” for additional information on these countries and data sources.

Best Prospect Countries

The countries that represent best prospects for U.S.

exporters of water and wastewater equipment and services are determined by a number of factors, including:

 The overall size of the water and wastewater market

in the country;

 The openness of that market to imports (partly reflected

in the share of imports in the total market);

 The market’s growth rate; and

 The historic U.S. position in the market and the U.S.

import market share.

This report contains market profiles of 12 countries

that fit several of these criteria: Australia, Brazil, China,

Egypt, India, Japan, South Korea, Mexico, Saudi Arabia,

Spain, Taiwan, and the United Kingdom, representing a

mix of developed and developing countries. Table 1 presents a summary of the estimates of the principal market

indicators for the profiled countries.

Brazil, China, India, Japan, South Korea, Mexico,

Spain, Taiwan, and the United Kingdom all have water

and wastewater markets that exceed $1 billion in size.

Such emerging markets as China, India, South Korea,

Taiwan, Mexico, and Brazil have enormous potential due

to the extent of unmet water supply and sewerage needs.

Their growth rate usually exceeds 10 percent per year.

Japan, the United Kingdom, Spain, and Australia are
 Water and Wastewater Export Market Plan—–

mature markets with slower growth, but their sheer size

and favorable business climate make them worth exporters’ consideration. The two Middle Eastern countries described in this report (Egypt and Saudi Arabia) are niche

markets for U.S. exporters. Egypt is a large, exclusively

aid-driven market, where massive U.S. foreign aid gives

a significant advantage to American companies. Saudi

Arabia is a highly specialized market with a focus on

desalination technology, where the United States also has

a good strategic position.

vii
–—U.S. Department of Commerce, International Trade Administration
Water and Wastewater Export Market Plan 1

Chapter 1

Overview of the Global Market for Water and

Wastewater Technologies

Access to safe drinking water and contamination of surface water bodies is a major problem in many areas of

the globe. In the year 2000, approximately 1.1 billion

people (18 percent of the world’s population) lacked access to safe drinking water, and 2.4 billion (40 percent of

the total population) lacked adequate sanitation.1 Most

of these people live in developing countries, predominantly in rural areas. Over one-third of the urban water

supplies in developing countries operate only intermittently, while roughly 40 percent of the drinking water

supply is lost due to leakage in the distribution systems.

At the same time, countries have come to recognize

that an adequate supply of clean water and effective

wastewater treatment is essential for sustainable development. Governments and organizations around the

world are investing substantial sums in water and wastewater improvements. These expenditures create real opportunities for U.S. companies to export water and

wastewater equipment technology.

In many parts of the world, wastewater receives no

treatment before being discharged into water bodies. The

resulting pollution of the receiving waters threatens the

human and animal populations that rely on these streams,

lakes, and rivers as a source of drinking water or

habitat.

Today, it is estimated that only 66 percent of wastewater is treated in Europe, 35 percent in Asia, 14 percent

in Latin America, and almost none in Africa.2 Many important water bodies throughout the world are in violation of local water quality standards. More than 35

percent of drinking water supplies in Africa are contaminated in violation of national health standards, 21 percent in Asia, and 18 percent in Latin America and the

Caribbean.

The principal constraints to the development of the

water supply and sanitation sector are funding limitations,

inadequate cost recovery, and inadequate operation and

maintenance. As water sources become contaminated,

1. Global Water Supply and Sanitation Assessment: 2000 Report,

World Health Organization, 2000.

2. Ibid.

Figure 1.1. Global Facts about Water Supply and Wastewater Treatment, 2000

Source: World Health Organization, Global Water Supply and Sanitation Assessment: 2000 Report (Geneva: World Health Organization,

2000).

Worldwide:

• 18% of the world’s population

 lacks access to safe drinking

 water.

• 40% of the world’s

 population lacks

 adequate sanitation.

In Latin America:

• 14% of wastewater is treated.

• 18% of drinking water supplies

 in Latin America and the

 Caribbean violate national health

 standards.

In Asia:

• Only 35% of wastewater is treated.

• 21% of drinking supplies are in

 violation of national health

 standards.

In Africa:

• Almost no wastewater is treated.

• Over 35% of drinking supplies

 violate health standards.
2 U.S. Department of Commerce, International Trade Administration

increasingly effective and costly treatment methods are

required. The lack of access to water for drinking and

industrial uses, as well as to wastewater treatment, is

thus a major limitation to sustainable development.

The incentives for improving water and wastewater

infrastructure in developed countries are primarily regulatory, particularly in Western Europe, where countries

are struggling to comply with the European Union’s increasingly stringent regulations for drinking water quality and wastewater treatment standards. In developing

countries, the driver is public health: 2.2 million people,

most of them children, die there every year from diseases associated with the lack of safe drinking water,

inadequate sanitation, or poor hygiene.3

As a result, the global water market has been growing rapidly over the last decade and constitutes well over

a third of the global environmental market. This report

is designed to serve as a guide for U.S. exporters of water and wastewater technologies and services and focuses

on two segments of the water market:

1. Water Equipment and Chemicals: Equipment,

supplies, and maintenance for the delivery and

treatment of water and wastewater. About 2,800

private U.S. companies supply filters, pumps,

valves, pipes, instruments, and other equipment, as

well as chemical and biological products. However,

only 800 of them can be regarded as potential

exporters, while almost 300 are actually exporting

their products.4

2. Consulting and Engineering Services: Engineering, consulting, design, management, operation,

and maintenance, etc. There are several hundred

water engineering and consulting firms in the

United States, many of which offer their services

internationally.

This report does not address two other segments of

the water market—water utilities and wastewater treatment works—for two reasons. First, municipal water and

wastewater utilities account for 81 percent and 95 percent of their respective market segments in the United

States and are not involved in any exporting activities.

The remaining newly privatized utilities are mostly

owned by large French and British water companies.5

Second, U.S. private utility companies cannot compete

for water utility markets overseas. The poor performance

3. Ibid. 4. “The U.S. Water Industry,” Environmental Business Journal, Vol.

XII, No. 7/8, 1999.

5.Ibid.

Figure 1.2. Global Market Size: Water and Wastewater Equipment and Chemicals, 1996–2002 (billions of dollars)

Source: “Global Environmental Markets 2000,” Environmental Business Journal, Vol. 12, No. 9/10 (Sept./Oct. 2000).

0

10

20

30

40

$50

$38.4

$40.1

$42.0

$47.3

1996 1997 1998 2002

(estimate)
Water and Wastewater Export Market Plan 3

of Azurix in a water and wastewater concession in Buenos

Aires, Argentina is a recent example of this phenomenon.

By concentrating on the market segments where U.S.

industry is most competitive, this report aims to engage

more water and wastewater technology firms in exporting their products overseas.

Market Size and Characteristics

According to Environmental Business International,6

the global market for water and wastewater equipment

and chemicals was about $42 billion in 1998, which represents a 5 percent growth over the 1996 figure. The

market is expected to grow at a 4 percent rate over the

next two years and reach almost $47.3 billion by 2002.

Water-related services also represent a significant share

of the $27.2 billion (1998) consulting and engineering

market.

The United States, Western Europe, and Japan represent over 80 percent of the total market size, but those

are mature markets with an average growth of 3 to 4 percent. At the same time, the economic recovery of emerging markets in Southeast Asia and Latin America from

the 1997 crisis, rapid expansion of the Chinese economy,

and broadening demand in the Middle East promise a

return to the 10 to 20 percent pre-1997 market growth in

the developing world.

With assistance from international donors, public sector agencies in developing countries, particularly in Asia,

have launched multi-million-dollar spending programs

in water supply and sanitation, and are encouraging private sector investments. The proportion of industrialized

countries’ development assistance devoted to water supply and sanitation increased steadily from 1986 to 1996,

rising from 3.4 percent to 6.6 percent of total assistance.

In terms of cash, bilateral commitments from industrialized countries for assistance to developing countries in

this sector rose from $1 billion in 1986 to $2.9 billion in

1996 (these numbers do not include France). In absolute

terms, Germany’s and Japan’s donor funding was particularly large: Germany spent nearly $3.4 billion, while

Japan invested $9.5 billion.7

The Market in Industrialized Countries

The water and wastewater equipment markets in industrialized countries, including the United States, comprise roughly 80 percent of the global market, or

approximately $34 billion a year. The U.S. market for

water and wastewater equipment accounts for about half

of this amount ($16.6 billion in 1999).8 However, these

markets are growing slowly, and the demand is mostly

satisfied by existing suppliers. (See Chapter 4 for detailed

country profiles.)

In Japan, opportunities exist mainly in wastewater

treatment (this market segment exceeds $6 billion annually9 ), due to water pollution control regulations, which

were tightened in 1996–1997. This regulatory pressure

has raised demand for both upgrading municipal sewage

treatment facilities and industrial effluent treatment

equipment (particularly for toxic chemicals). A need also

exists for “closed” systems for recycling industrial

wastewater.

Canada’s market is well penetrated by U.S. water and

wastewater equipment suppliers. Despite very slow market growth, some opportunities still exist in municipal

wastewater treatment. Many Canadian municipalities

have aging sewerage infrastructure and even discharge

untreated sewage into the waterways.

The EU market for water and wastewater treatment

equipment is driven primarily by the need to comply with

the EU Urban Wastewater Treatment Directive. In addition, large multinational food and beverage, and chemical companies are installing effluent treatment works at

6. “Global Environmental Markets 2000,” Environmental Business

Journal, Vol. XII, No. 9/10, 2000.

7. Global Water Supply and Sanitation Assessment: 2000 Report, World Health Organization, 2000.

8. “The U.S. Water Industry,” Environmental Business Journal,

Vol. XII, No. 7/8, 1999.

9. Environmental Market in Japan, U.S. Department of Commerce, International Trade Administration, 1998.

Figure 1.3. Share of the Global Market for Water and

Wastewater Equipment, 1998

Source: World Health Organization, Global Water Supply and

Sanitation Assessment: 2000 Report (Geneva: World Health

Organization, 2000).

Other

Industrialized

Countries

41%

United States

39%

Developing

Countries

20%
4 U.S. Department of Commerce, International Trade Administration

many of their European sites in response to local environmental regulations and the desire to enhance their

public image.

The biggest market opportunities in the European

Union are for biological treatment equipment for both

aerobic and anaerobic treatment systems. There is also

significant demand for separation equipment for new

municipal wastewater treatment plants. The market for

high purification (filtration, membrane) systems for industrial and other commercial applications is also expected to grow quickly in Western Europe: from about

$300 million in 1999 to over $400 million in 2006.10

Overall, the market for newer, advanced technologies is

expanding at the expense of traditional equipment.

In France, where 9 percent of the population (mostly

in rural areas) still does not have access to centralized

wastewater treatment systems, wastewater treatment technologies represent the largest segment of the water market. In order to comply with EU regulations, all French

towns must install secondary treatment by 2006. In environmentally sensitive areas, tertiary treatment is required in all communities with at least 10,000 residents.

However, opportunities for U.S. firms are very limited

in France: Vivendi (formerly Compagnie Générale des

Eaux) and ONDEO (formerly Suez Lyonnaise des Eaux)

dominate the French market, while their closest competitors hardly reach a 1 percent market share.

The British market for water and wastewater equipment is among the largest and fastest growing in Europe,

and is relatively open to foreign players. Recently privatized water utilities and major industrial users (for example, power and chemical companies) account for more

than 60 percent of the market.

A major market opportunity in Germany is the rehabilitation and upgrading of the water and wastewater infrastructure. The cost of constructing new sewerage

systems in the New Lands (formerly East Germany) is

about $50 billion, plus another $15 billion for water and

wastewater system modernization projects in the New

Lands and $13 billion in the Old Lands.11

Countries in southern Europe (Italy, Spain, Portugal,

and Greece) represent even greater opportunities, although mostly for EU companies. In Italy, over 60 percent of the population does not have access to adequate

sewage treatment, and 30 percent of the wastewater is

discharged untreated. An overall investment of about $62

billion over the next ten years will be needed to bring

Italy’s water and wastewater infrastructure up to EU standards.12 Spain has a similar situation, with 78 percent of

the major cities not meeting the European Union’s water

pollution control directives, and just over 40 percent of

the population having access to adequate drinking water

treatment systems. Over the next five years, Spanish public and private companies will invest about $30 billion

in water purification equipment and sewage treatment

systems.13

The Organization for Economic Cooperation and Development (OECD) countries of Central Europe (Poland,

Hungary, and the Czech Republic) and other Central and

East European nations are also making efforts to improve

their environmental performance in view of their planned

accession to the European Union. The market is stimulated by the implementation of the European Union’s

drinking water quality and wastewater management standards but is also restricted by limited availability of funds

and administrative failings. As the Central European

markets are being restructured to involve more private

participation, the main opportunities are in industrial

wastewater treatment, as well as rehabilitation of the antiquated water supply and municipal wastewater treatment systems. Optimistic assessments valued this market

at as high as $4 billion in 1999, with substantial shortterm growth prospects, particularly due to the large lending program of the European Investment Bank.14 For

example, Hungary’s water and wastewater market is currently estimated at $200–250 million a year and is growing by 5 to 8 percent annually.15 However, Central and

East European water markets are likely to be dominated

by EU firms.

The Market in Developing Countries

Many developing countries are unable to meet their

population’s need for safe drinking water and adequate

sanitation. As the populations and economies of these

countries grow, so does the demand for water. The development of environmental regulations also contributes

to the need for water and wastewater technology and

monitoring. This section discusses the current conditions

in developing regions of the world.

Table 1.1 shows average annual investments in water

supply and municipal wastewater treatment in Africa,

Asia, and Latin America and the Caribbean from 1990

to 2000. The table demonstrates that investments in water supply are significantly higher than those in sanitation, which contributes to the large deficit of adequate

10. European Commercial Scale Water Treatment Equipment Markets, Frost and Sullivan, no. 3822-15, 2000.

11. Ibid.

12.Ibid.

13.Ibid.

14. Central and Eastern European Water and Wastewater Treatment

Equipment Markets, issued by Frost and Sullivan, no. 3792-15, 2000.

15. Hungary: Water Treatment Equipment and Services, Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of State, 2001.
Water and Wastewater Export Market Plan 5

sanitation access in the developing world. It also shows

that most of the investments come from domestic sources

rather than international donors.

Asia. Despite the financial crisis in 1997 and 1998, the

Asian water market is stronger than ever. In fact, the economic turmoil made some Asian governments seek to

increase the efficiency of the water and sewage infrastructure by attracting private capital. The potential demand

is enormous: 80 percent of the global population without

access to improved sanitation and almost two-thirds without access to improved water supply live in Asia. However, most of this demand is concentrated in the markets

that are in the early stages of development: Southeast Asia,

China, and India. Many of these countries have recently

promulgated new environmental regulations that are likely

to give a boost to the industrial wastewater treatment

market as well. Particularly large investments are made

in water supply, a significant share of which comes from

bilateral and multilateral lending sources. The market in

China alone exceeds $1 billion per year, with annual

growth approaching 15 percent.

In more developed Asian economies, the market is either saturated (as in Japan) or growing very slowly (for

example, in South Korea, Taiwan, and Singapore). At the

same time, these more mature markets offer opportunities for sophisticated water and wastewater treatment

technologies produced in the United States.

Middle East/North Africa. Water is not only an environmental issue, it’s also a critical economic and political issue in the Middle East. Middle Eastern countries

struggle to alleviate water shortages for drinking and irrigation through desalination and wastewater reuse. Water supply and wastewater treatment systems, especially

in rural areas, require upgrading and expansion. The desalination technologies market is projected to grow particularly fast, from about $1 billion in 1999 to $2.5 billion in 2006.16

While oil-rich countries of the region (Saudi Arabia

and the small states of the Persian Gulf) are able to fund

these projects themselves, others (Egypt, Jordan) rely

heavily on foreign donor assistance. Opportunities for

U.S. firms exist mainly in countries that have good political relations with the United States: Saudi Arabia,

Egypt, and Jordan. Egypt is the largest recipient of U.S.

bilateral assistance in the world, with the U.S. Agency

for International Development (USAID) having spent

billions of dollars on this country’s water and wastewater infrastructure. (See Chapter 4 for more country-specific details.)

Latin America. Latin America presents abundant market opportunities in water and wastewater treatment—

both in contract operations of utilities (most of which are

being privatized), as well as subsequent technology investments. Although drinking water coverage is relatively

high in Latin America (85 percent), growing urban populations and obsolete, inefficient infrastructure create a

demand for investments in water supply. Most drinking

water projects are publicly financed, with additional

monies coming from the World Bank, the Inter-American Development Bank (IDB), and, increasingly, Japanese bilateral funding. At the same time, water utility

privatization has been a major market driver in Chile,

Argentina, Mexico, Colombia, and, most recently, Brazil. In municipal wastewater treatment, private sector

participation has not yet materialized in most Latin American countries (except Argentina and Chile), with most

funds coming from multilateral and bilateral lenders.

According to Environmental Business International,

opportunities focus on about 550 municipal projects

across the continent, amounting to over $40 billion of

investment.17 Opportunities in industrial wastewater treatment are much fewer, since governments in Latin

America are unwilling or unable to enforce environmental

regulations on industrial producers.

Africa. Africa has the lowest water supply coverage of

any region, with only 62 percent of the population having access to improved water supply (the situation is much

worse in rural areas). Sanitation coverage in Africa is also

poor (60 percent), with only Asia having lower coverage

levels. Almost all African countries depend entirely on

donor assistance to help them solve these problems. Most

of this aid comes from multilateral lenders and donors

16. Middle Eastern, North African, and European Desalination Plant

Markets, Frost and Sullivan, no. 3857-15, 2000.

17. ”Global Environmental Markets 2000,” Environmental Business

Journal, vol. XII, no. 9/10, 2000

Table 1.1. Average Annual Investments in Water Supply

and Sanitation in Developing Countries, 1990–2000

(billions of U.S. dollars)

Latin

 Africa Asia America Total

Water Supply 4.09 6.06 2.41 12.56

National Investment 1.21 3.82 1.86 6.89

External Support 2.88 2.24 0.55 5.67

Sanitation 0.54 1.10 1.50 3.14

National Investment 0.26 0.95 1.11 2.32

External Support 0.28 0.15 0.39 0.82

Total 4.63 7.16 3.91 15.70

Source: World Health Organization, 2000.
6 U.S. Department of Commerce, International Trade Administration

(the World Bank, the African Development Bank, and

the United Nations Development Program), as well as

French and British bilateral development agencies (for

their former colonies). The traditional domination of

French and British companies, in addition to the generally unfavorable business climate, have deterred U.S.

companies from exploring water-related opportunities in

Sub-Saharan Africa.

The Republic of South Africa is the biggest water

market in Sub-Saharan Africa. The greatest market potential lies in the efforts to provide potable water and sanitation in rural and poorer urban areas that still have no

access to these services. The annual market for water and

wastewater equipment was about $100 million in 1996,

and has been growing at 12 to 15 percent per year.18

Newly Independent States. The states of the former

Soviet Union offer potentially enormous opportunities in

the water sector, particularly in municipal and industrial

wastewater treatment. However, local funding resources

are extremely limited, and the uncertainties of the

business climate hamper market expansion beyond

donor-funded projects. Large water and wastewater infrastructure projects funded by multilateral development

banks in Russia, Ukraine, the Caucasus states, and Central Asia are essentially the only source of water and

wastewater equipment supply opportunities in this region.

Trends Affecting the Water and Wastewater

Industry

The global water industry has entered a period of revolutionary changes. Water prices are being adjusted to reflect quality, quantity, and specific end-use values. Market

pricing, combined with the growing privatization of water and wastewater utilities, generates private capital to

create and maintain rational water markets. The market

is further enhanced by the more consistent enforcement

of environmental regulations, worldwide consolidation

of the water industry, and proliferation of e-business.

Privatization

An important trend in recent years has been the move

toward privatization of water and wastewater infrastructure throughout the world. Governments, even in developed countries, are faced with the stark reality of aging

and inadequate infrastructure, unable to effectively deliver services to their rapidly growing populations. The

economic reality associated with these problems is overwhelming and leads governments to turn to the private

sector for assistance.

Among OECD countries, the United Kingdom represents the most vivid example, with completely privatized

water and wastewater operations in England and Wales.

In developing countries, Latin America and East Asia

have been on the forefront of the water utility privatization trend. The increased role of the private sector

leads to greater levels of investment in infrastructure and

service improvements, thereby offering enhanced opportunities for water and wastewater equipment suppliers.

Compared to other infrastructure sectors such as telecommunications, power, and transportation, the water

sector is viewed as more difficult to privatize because

water supply and sanitation are considered by many to

be social services. Additionally, because regulatory and

pricing mechanisms for water and wastewater are less

well-established than for other infrastructure industries,

many investors view the water sector as having relatively

higher risks and lower profit margins than other infrastructure sectors.

Perhaps because consumers willingly pay for water,

but are more reluctant to pay for the indirect benefits of

sewage treatment, private participation in developing

countries has been far more common in water than in

wastewater. In Latin America, however, increasing wealth

has led to an extension of concessions to the sewerage

subsector.

Several public-private mechanisms have evolved to

provide water and wastewater services. These are: (1)

management contract, (2) lease, (3) concession, (4) buildoperate-transfer (BOT) and build-own-operate (BOO)

schemes, and (5) asset sale. Under contract operations, a

company is hired to operate and maintain the entire utility or a portion of the utility functions for a specified term;

the company does not finance or develop new facilities.

Under a lease arrangement, the private contractor typically finances working capital for smaller equipment and

infrastructure, along with operating, maintaining, and

managing the utility facilities. A concession typically

includes the financing of most infrastructure and the

concessionaire receives the system revenues as compensation. BOT and BOO schemes are typically concessions

that include the private development of new water or

wastewater facilities. Asset sales, or sale of shares,

formally transfer the utility into the private sector. Table

1.2 illustrates the different privatization scenarios and

the roles of the public and private sectors under each

arrangement.

About 50 percent of the contracts awarded in the last

decade have been concession contracts. Countries seem

18. South Africa: Water Treatment Services, Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of

State, 2000.
Water and Wastewater Export Market Plan 7

to favor concessions over other forms of private involvement because such arrangements allow them to take advantage of the efficiencies offered by private operators

while maintaining control over the assets. Outright divestiture of water and wastewater assets is relatively

rare.19

Although the numbers of international companies investing in water and wastewater projects in developing

countries is growing, to date only a handful of companies have sponsored most of the projects. French water

companies ONDEO, Vivendi, and SAUR International,

along with Spain’s Aguas de Barcelona and the British

firm Thames Water, accounted for 58 of the 79 projects

tracked by the PPI Database from 1990 to 1997.20 Only

Vivendi and ONDEO operate in every region of the

world. These international companies often team up with

local companies, many of which were never involved in

the water and wastewater business before, to form consortia for bidding on concessions.

Consolidation and Globalization

The shape of the global water and wastewater industry has changed considerably in the last decade. Widespread consolidation among manufacturing and service

companies, as well as utilities, has led to the emergence

of giants in the industry. Consolidation in the name of

efficiency and globalization has brought together utilities and manufacturers across the globe. These newly

consolidated companies have the ability to provide fullpackage solutions to their customers.

The globalization and consolidation trends dominating water markets around the world have had a major

impact on the U.S. water industry in recent years. French

firm Vivendi’s purchase of U.S. Filter for $6.2 billion in

1998 has created a company (whose $3.1 billion U.S. arm

is now called Vivendi Water) with global revenues of

about $20 billion in equipment and chemicals, utilities,

concessions, and services. Vivendi Water now incorporates over 100 companies previously acquired by U.S.

Filter. In 1999, the French firm ONDEO acquired Nalco

Chemical and United Water Resources to increase its

worldwide water and wastewater revenues to $6.3

billion. These acquisitions have further shrunk the

U.S. industry’s global market share, but also opened

more markets for companies with a large base of U.S.

employment, if not ownership.

In another key development, Azurix Corporation, after becoming a publicly traded company in 1999, acquired

Britain’s Wessex Water (water technology, engineering,

and services) and Germany’s Lurgi Bamag GmbH (water process engineering), making it the largest American

firm in the international water market. However, Azurix

has recently failed financially in its large water concession in Argentina, and has not been performing well in

its other engagements in developing countries. As a result, Azurix was re-acquired by its former parent company, Enron Corporation, in March 2001.

U.S. water treatment equipment manufacturing companies are also consolidating. With Vivendi Water almost

beyond reach of its U.S. competitors, Ionics ($351 million) is firmly in second place, followed by Osmonics

($177 million), which doubled in size between 1993 and

1998, and Waterlink ($135 million), which grew 440 percent between 1995 and 1998. Consolidation is also evident in the water chemicals market, with Hercules, Inc.,

becoming the world’s largest supplier of specialty chemicals for water treatment programs through a number of

acquisitions. At the same time, there is practically no

short-term growth envisioned in the U.S. water equipment and chemicals manufacturing markets outside Vivendi Water. This demonstrates that equipment-only

suppliers are bound to lose market share to integrated

equipment and services providers.

With the growing privatization of utilities, the line

separating water and wastewater utilities from companies selling products and services is increasingly blurred.

Large companies such as Vivendi that own and run utility operations are also producing the equipment used as

19. Silva, et al., “Private Participation in the Water and Sewerage

Sector—Recent Trends,” Public Policy for the Private Sector, The

World Bank Group, 1998.

20. “Private Sector Note No. 196,” PPI Project Database, The World

Bank Group, 1999.

Table 1.2. Types of Privatization Arrangements in the Water Industry

Management Contracts Lease Contracts BOT or BOO Full Concession Asset Sale

Ownership public public public public private

Investment public public private private private

Operation private private private private private

Tariff Collection public/private public/private public private private

Source: Silva et al., “Private Participation in the Water and Sewerage Sector—Recent Trends,” Public Policy for the Private Sector, The World

Bank Group, 1998.
8 U.S. Department of Commerce, International Trade Administration

part of the investment, thus putting the end-user and the

supplier under the same roof. A former U.S. Filter executive noted: “Virtually none of Vivendi’s business was

equipment sales and virtually all of ours was, now we

have their operations and services to offer and they have

our equipment and technology.”21 Large companies also

have the added benefit of increased financial resources

and stability to enable them to provide financing assistance to their customers. As a result of economies of

scale and a market that is difficult to break into, smaller

water and wastewater companies are left at a disadvantage in the global market when competing against these

large corporations.

The globalization in the water and wastewater industry has progressed to such an extent that it is now difficult to define what constitutes an American company. For

example, successful water and wastewater delivery companies, i.e., those producing pipes, pumps, and filters,

build manufacturing plants abroad. Identifying whether

a pipe made abroad for an American-owned company

should be considered an American export is not a simple

matter. As a result, it is particularly difficult to identify

the competitive advantage of American water and wastewater companies. In many ways, geographic ties are no

longer relevant in a world of multinational partnerships.

Market Pricing

Global population growth and urbanization, along with

regional water shortages, are increasing the demand for

clean water at an unprecedented rate. These factors, along

with accelerating privatization of water and wastewater

utilities, has led to the growing recognition that water is

an economic good, and that in order to deliver reliable,

adequate services to a wide range and growing number

of customers, full-cost pricing mechanisms need to be

implemented.

For years, public utilities have relied on subsidies in

addition to user fees to cover the costs of water supply,

particularly in rural, agricultural, and low-income areas.

Governments are starting to realize that the use of subsidies results in overall inefficiencies and lack of resources

for improvements. This realization has started the trend

toward the use of full-cost pricing, where the total cost

of service delivery is passed on to the consumer, thereby

promoting water conservation and increasing the financial and physical health of the utility.

With growing privatization of utilities, market pricing models that capture the cost of service delivery will

continue to expand. Privatized utilities must be able to

provide a service and remain financially sound. Some

critics contend that full-cost pricing of water will put basic water services beyond the reach of many poorer users, and that providers of basic services should not profit

from user fees. This has made privatization of water services and full-cost pricing controversial. In the long run,

utilities that are able to fully capture the costs associated

with the provision of their services are better able to maintain their facilities, invest in and maintain equipment, and

service their customers.

Financing Sources

Financing is critical to the success of water and wastewater projects in emerging markets. Governments faced

with the challenge of meeting the demand for water and

sewerage infrastructure growth and improvement are increasingly turning to private sources to finance these capital-intensive projects. New players include commercial

banks and funds, as well as large water and wastewater

firms themselves. One new trend in water and wastewater financing is the stock market. More and more companies have gone public, relinquishing private ownership

to investors in exchange for needed capital for project

financing.

Many utilities also are requesting extended payment

terms as a precondition to placing an order for new technology and equipment. At present, few companies can

afford to take on their customer’s credit risk by providing sufficient funding for extended payment plans, but

leading industry experts contend that exporting companies must be able to provide extended payment terms to

initially win orders and build long-term relationships with

the clients.

Finding a financing source is no less important than

ensuring project financeability. Project financeability

means the lender gets its money back—with a profit and

within a reasonable timeframe—and requires the existence of a cost-recovery mechanism. If a country does not

have the political will to impose and collect reasonable

user fees, the project is unlikely to attract private capital

sources.

Regulatory Development

National governments worldwide are increasing the

stringency of both ambient and drinking water quality

standards to combat the deterioration of their water resources and halt the spread of pollution. Among developed countries, this trend is particularly visible in the

European Union, where EU directives compel member

countries (and stimulate accession candidates) to com21. “Vivendi Acquisition of U.S. Filter Fuels Global Growth to $13

Billion in Water,” Environmental Business Journal, vol. XII, no. 7/8,

1999.
Water and Wastewater Export Market Plan 9

ply with new, tougher regulations. With increasing pressure from international donors and neighboring countries,

these trends are spreading to the developing world.

In the developing world, while environmental regulations have been established, little has been done until recently to ensure enforcement. The recent trend in many

developing countries, particularly in Southeast Asia, is

toward increased monitoring of regulatory compliance

and tougher sanctions for violations. With increased enforcement, monetary penalties, and corrective action requirements, industries are starting to internalize the costs

of environmental compliance by investing in cleaner process technology and end-of-pipe treatment equipment.

The impact on the market is a greater level of demand

for industrial wastewater treatment equipment.

Another trend in regulatory development is the integration of economic incentives into traditional commandand-control regulations. The command-and-control

system is often seen as too confrontational in many developing countries. It also tends to emphasize endof-pipe pollution control technologies. Economic instruments (such as effluent charges and user fees) give

industry the flexibility to comply with environmental requirements. The system encourages polluters to invest

in the most efficient pollution abatement measures, including pollution prevention. In fact, some countries have

adopted import duty waivers for environmentally cleaner

industrial process technologies. The increasing use of

pollution prevention has the potential in the future to alter the technological needs of industrial wastewater

treatment.

E-Business

In many industries, the Internet has already made many

changes in the way business is conducted. However, ecommerce has not had the same dramatic impact on the

water industry, either in business-to-consumer (B2C) or

in business-to-business (B2B) applications. In 1999, only

18 percent of water treatment equipment manufacturing

companies had Web pages and only 0.2 percent had online ordering capability.22 A survey of 100 of the largest

water utilities in the United States determined that less

than 5 percent had the capability for customers to access

and pay their bills over the Internet.23

Nevertheless, the water industry has made advances

in e-commerce, beginning with basic on-line catalogues

where utilities and other businesses can review equipment specifications and make purchases directly from

manufacturers. Auction sites have also been developed

to facilitate used equipment sales. However, to date much

of the business transacted on the Internet has been for

commodities, typically equipment for maintenance, repair, and operations.

Recently, several companies have attempted to take

the next step in B2B transactions by establishing digital

marketplaces or e-hubs, which are designed to allow for

more complex transactions such as requesting qualifications and proposals for engineered products, along with

on-line tracking of procurements. At least one e-hub has

already expanded its services to include trading of water

rights between parties. Two e-hubs now operating in the

water industry are VerticalNet’s Water Online, and

Azurix’s WaterDesk.

Employing e-commerce in lieu of traditional procurement vehicles can save both time and money for water

utilities, as well as for the manufacturers of equipment.

Estimates of savings for the procurer in other industries

range from 2 to 39 percent.24 Fulfillment cycles can be

reduced by two-thirds, as can administrative costs; and

inventory costs of manufacturers can be reduced by 25

to 50 percent.25

22. “The U.S. Water Industry,” Environmental Business Journal, vol.

XII, no. 7/8, 1999.

23. Survey by PA Consulting Group, July 2000.

24. “B2B: 2B or Not 2B?” version 1.1, part 1 of 5, Goldman Sachs,

November 12, 1999.

25. Aberdeen Group, June 1999.
10 U.S. Department of Commerce, International Trade Administration

The annual growth of the U.S. water and wastewater

equipment and services industry between 1999 and 2003

is estimated at about 8 percent. While the domestic market for water equipment is growing very slowly (by

1 percent in 1999), the industry’s expansion in this market segment translates directly into the fast growth in exports, which went up from 26 percent of the total

production volume in 1998 to 29 percent in 1999 (or about

$5.9 billion).26

Despite this promising growth in exports, the vast

majority of U.S. water companies are still focused on the

North American marketplace and lack the capacity to

compete for large global projects with European and Japanese firms. This chapter looks at the competitiveness of

U.S. firms vis-à-vis their main business rivals from other

countries in different water and wastewater industry segments and in different regions of the world.

Major Foreign Competitors

The major players in the global water and wastewater

industry come from the United States, France, the United

Kingdom, Japan, and Germany. Integrated, global companies generally have a competitive edge over U.S. firms

that are smaller, more specialized, and operate in an environment in which information is often protected rather

than shared. European water companies that have more

experience in operating and serving privatized or partially

privatized facilities will have a competitive edge in

emerging markets where water and wastewater sectors

are undergoing privatization.

U.S. companies are generally competitive in the water equipment and chemicals market segment but face

very tough competition from French, British, and Japanese firms. In the area of water and wastewater treatment

works, the market is dominated by French and British

companies. In particular, companies from France and the

United Kingdom are by far the most competitive in providing integrated packages that include designing, building, managing, and even owning water infrastructure.

Table 2.1 contains the list of the top ten water companies in the world. Two French companies, Vivendi and

ONDEO, are by far the largest, while other competitors

to U.S. firms occupy almost all the other positions on

the list.

France

In France, municipalities are responsible for water and

sewerage services, either by providing those services

themselves or, more commonly, contracting them out. The

private sector’s share in drinking water supply has increased from about 30 percent in the mid-1950s to 77

percent in the late 1990s, and about 60 percent of the

wastewater market is operated by private companies.

This move to private management in France has led

to the emergence of the two largest full-service water

companies in the world: Vivendi with over $20 billion

in revenues in 2000 and ONDEO with $6.3 billion in revenues in 2000. These firms represent the result of significant horizontal integration in the French water

business. In the late 1980s, there were five private water

Chapter 2

U.S. Competitive Position in the Market

26. “The U.S. Water Industry,” Environmental Business Journal, vol.

XII, no. 7/8, 1999.

27.Thames Water became part of Germany’s RWE Group in September 2000.

Table 2.1. Top 10 Water Firms in the World, 2000

Rank Company Country Water-Related

Revenues,

$ billion

1 Vivendi

2 ONDEO

3 Ebara Corporation

4 Hercules, Inc.

5 Severn Trent

6 Thames Water27

7 Aguas de Barcelona

8 AWG (Anglian Water)

9 United Utilities

10 American Water

Works Co.

Source: Hoover’s Online (www.hoovers.com).

France

France

Japan

United States

United Kingdom

United Kingdom

Spain

United Kingdom

United Kingdom

United States

20.5

6.3

4.3

3.1

2.5

2.2

1.7

1.4

1.4

1.3
Water and Wastewater Export Market Plan 11

companies; today, there are three. Vivendi, SAUR, and

ONDEO contract with the local municipalities to operate water services and build new facilities. Both Vivendi

and ONDEO have grown into global conglomerates, having leveraged their capital to expand from infrastructure

management services to water equipment manufacturing

and even such sectors as hazardous and solid waste management, and telecommunications.

Vivendi is the world leader in revenues received from

drinking water distribution. With the acquisition of U.S.

Filter in 1999, Vivendi became the world’s largest water

company with 1999 net sales of 10.7 billion euros in the

water and wastewater sector. In addition, the firm controls approximately 40 percent of the water and 30 percent of the wastewater markets in France. Vivendi

currently operates in 100 countries and employs 275,000

people.

ONDEO has a long history of involvement overseas.

In 1914, the company was active in North Africa, Central Africa, and the Pacific. From 1980 to 1990, it expanded internationally in the water and wastewater sector,

mainly in the United Kingdom, Spain, and the United

States. In 1993, the company won contracts in Argentina

and Australia, and intensified international development

in 1997 with water contracts in the Philippines, Hungary, Morocco, and Indonesia. In 1997, Compagnie de

Suez merged with Lyonnaise des Eaux, becoming Suez

Lyonnaise des Eaux. The newly named company joined

with United Water Resources, Inc., a U.S. company, and

each acquired a 50 percent interest in United Water Services. With this merger, the company now manages water works for municipalities and local utilities, mostly in

the northeastern United States. In 1999, the company

acquired all of United Water Services. In 2001, the water division of Suez Lyonnaise des Eaux changed its name

to ONDEO. ONDEO also owns Nalco Chemical, the

top water chemical company.

With more than 201,000 employees, ONDEO serves

over 100 million people in over 120 countries: 32 million in North America, 42 million in Europe, 18 million

in Asia, 5 million in Africa, and 22 million in South

America. The company is also Europe’s fifth-largest private electricity supplier and a leader in waste services

and cable in France and Belgium. In 1999, the group’s

core businesses generated 43 percent of its revenues outside France and Belgium; by 2002 the goal is to increase

this figure to 50 percent.28

Several key factors have enabled Vivendi and ONDEO

to be successful in the international water and wastewater markets. First, the concession mechanism that has

been used in France is being modeled throughout the

world, which has given these companies a competitive

edge in bidding on these types of projects. Second, these

companies are integrated, providing potential clients a

full package, including experience in operating and maintaining facilities as well as collecting fees. Third, French

companies have an advantage in terms of investments in

long-term water projects, because French stock owners

include banks and large financial institutions that can afford longer-term investment approaches, which are usually necessary for water and wastewater treatment-type

projects. In contrast, U.S. companies are driven by profitability and individual investors who cannot afford or

do not wish to take such a long-term approach. Finally,

the French giants have been able to conduct market intelligence work to edge out competitors in bidding processes, with substantial support from French foreign

embassies. Given their experience, access to capital,

and market intelligence, these large firms are formidable

competitors.

Both Vivendi and ONDEO have substantial holdings

in U.S. water and wastewater companies. Vivendi’s

U.S. presence includes not only U.S. Filter but Air and

Water Technologies Corporation and numerous other

companies in water equipment and water-related

instrumentation.

United Kingdom

In 1989, the Water Act restructured the water industry

and privatized the water and wastewater operations of

the 10 water authorities in England and Wales. The

privatization was motivated in part by the need for an

enormous investment of resources to bring the infrastructure up to the European standards. From 1990 through

2000, the private water industry invested over $52 billion in water and wastewater system infrastructure improvements (see the section on the United Kingdom in

Chapter 4 for more information about the U.K. water and

wastewater market).29 The market liberalization at home

has positioned several of the larger British firms such as

Thames Water, Severn Trent, and AWG (formerly

Anglian Water) to successfully compete in the international market.

Notably, several British companies have formed alliances with leading U.S. companies in order to access the

U.S. market. These include:

28. ONDEO’s Internet site (www.ondeo-nalco.com).

29. Financial Performance and Expenditure of the Water Companies

in England and Wales: 1999–2000 (Birmingham, United Kingdom:

Office of Water Services, 2000). Available on the Internet at

www.opfwab.gov.uk/pdffiles/capex2000.pdf.
12 U.S. Department of Commerce, International Trade Administration

 A joint venture between AWG and American Water

Works Company to pursue the privatization of

municipal wastewater services in the United States.

 Ownership of several U.S. equipment and services

firms, including PSC Environmental Services, by

Severn Trent.

 A joint venture between the Kelda Group (formerly

Yorkshire Water) and Ogden.

Japan

Japanese water and wastewater companies tend to be

highly integrated and fairly concentrated. Leading Japanese firms are technology- and equipment-oriented and

compete as conglomerates or trading companies in which

every component required for a project is included—consulting, engineering, construction, equipment, supplies,

materials, and financing.

The $4.3 billion Ebara Corporation offers the most

diversified portfolio of water and wastewater equipment

and services, including equipment for all types of treatment processes, chemicals, sludge handling equipment,

as well as plant design and construction, and process engineering and consulting services. Pump manufacturing

is Ebara’s major business, and its manufacturing bases

worldwide (Japan, Taiwan, Indonesia, Brazil, Italy, and

Spain) offer customers competitive prices and short delivery periods.

The smaller Kurita Water Industries specializes entirely in the water market but focuses primarily on ultrapure water production for the electronics industry,

membrane filtration and desalination equipment, water

recycling technologies, and chemicals. Mitsubishi Heavy

Industries has a large machinery and plants manufacturing business that produces, among others, package water, sewage, and industrial effluent treatment systems,

pumps, and desalination plants. The Kubota Corporation

is a major manufacturer of pipes for water supply and

sewerage systems.

The Japanese government actively supports the development of business opportunities for Japanese firms by

providing attractive financing along with technical assistance to promote their products.

Germany

German companies involved in the water and wastewater sectors are best known for their construction and

engineering services, although a few German firms have

also been active in bidding on BOT projects. As

Germany’s domestic market is limited, companies have

had to look overseas to survive.

German companies are also consolidating to provide

a more complete range of products and services in the

international water and wastewater market. For example,

RWE Group AG, a conglomerate of German utilities,

offers a range of technical and financial expertise in the

design, construction, and operation of waterworks.

In September 2000, RWE took over Britain’s Thames

Water to become one of the world’s largest water

companies.

Competition by Geographic Area

Traditionally, U.S. companies have been most competitive in Latin America (particularly Central America),

due to its geographic proximity and the fact that they are

usually able to conduct their business in Spanish. However, giant French water companies have recently become

very competitive, particularly in South America, due to

their ability to take advantage of market opportunities

created by the growing water utility privatization there.

Japanese water equipment firms have also been active in

South America, supported by the Japanese government’s

aid programs.

Although U.S. firms have a significant market share

in water and wastewater equipment supplies in Europe,

this share is unlikely to expand. The pan-European integration process that has extended to Central and Eastern

Europe creates advantages for European firms.

In Asia, U.S. competitiveness is largely determined by

the political relationships the U.S. government enjoys

with individual countries and the corresponding amount

of U.S. foreign aid going there. U.S. companies are most

competitive in the Association of Southeast Asian Nations (ASEAN) countries: Indonesia, Malaysia, Thailand,

the Philippines, and Singapore. In China and India, the

United States is becoming more competitive as the bilateral political climate improves. Japanese and, to a smaller

extent, French and British firms are the main competition in that part of the world.

A similar situation exists in the Middle East, where

the U.S. government has been pouring foreign aid into

water projects in Egypt, Jordan, and, since recently, Palestine, thereby creating advantages for U.S. water and

wastewater equipment suppliers. The strategic partnerships between the United States and Saudi Arabia, and a

number of smaller Gulf states also have a positive impact on the competitiveness of U.S. exporting firms. On

the contrary, there is virtually no American business presence in “unfriendly” countries like Syria, Iraq, Libya, etc.

In the Maghreb countries of North Africa (Morocco, Algeria, and Tunisia), U.S. firms’ competitiveness is impaired by the need to conduct business in French and
Water and Wastewater Export Market Plan 13

compete with well-connected French companies. In general, across the Middle East and North Africa, European

firms, particularly French and German, are very tough

competition.

Finally, Africa has never been a priority region for U.S.

exporters of water and wastewater technologies, partly

because of the competition from the French and British

firms in their former colonies, and partly because of the

risky political and business climate in the region. Several U.S. firms are now trying to explore opportunities

in Africa created by the international efforts to provide

safe drinking water to the population.

Competitiveness by Market Segment

U.S. companies are major exporters of water and

wastewater equipment and chemicals. Overall, U.S. firms

seek to compensate for the high risk of working in overseas water and wastewater markets through higher profitability of their exports. This makes industrial wastewater

projects generally more attractive for them. While U.S.

firms would probably not be competitive on price alone,

they rely on the recognized quality of their work and their

technological sophistication and reputation. Often, U.S.

firms produce specialty equipment that is not available

from other suppliers, which gives them a competitive

edge in certain niche markets.

At their October 1999 meeting, representatives of the

U.S. environmental industry, non-profit organizations,

and the federal government identified the following areas where U.S. water companies have substantial competitive advantage:30

 Micro-level water and wastewater treatment systems, especially decentralized packaged systems

using membrane filtration, reverse osmosis, molecular sieve, and hollow fiber separation technologies;

 Water and wastewater testing technologies; and

 Industrial process control technologies.

It is difficult to estimate export volumes of specific

water technologies, mainly because traditional classification methods are not yet geared specifically to environmental technologies. Therefore, some, if not most

harmonized tariff schedule (HTS) codes31 designated

as environmental items in the U.S. Department of

Commerce’s September 2000 classification also include

products intended for non-environmental applications.

According to rough estimates based on the 1999 HTS

code data for U.S. exports, biological wastewater treatment equipment is by far the largest export category for

the U.S. water industry. The other principal exports include ozone generators, filters, pumps (including mixer,

centrifugal, and vacuum pumps), as well as measuring

and testing equipment.

France, the United Kingdom, and Japan remain the

major competitors in the global market for water equipment and chemicals. Germany and the United States also

have a sizable market share.32

Process Equipment

Process equipment includes separation, mixing, destruction, and chemical feed equipment for municipal and

industrial water and wastewater treatment. Overall, the

market for U.S.-manufactured process equipment should

continue to grow, especially if destruction technologies

replace some existing separation technologies (for example, advanced oxygen technology vs. carbon adsorption). Potential export markets for process equipment are

dependent upon the development of environmental regulations in importing countries; as these countries develop

increasingly stringent regulations, more advanced treatment technologies and process equipment will be needed.

Canada is the most lucrative foreign market for U.S.

water treatment process equipment firms primarily because of its proximity to the United States and the strong

ties between U.S. producers and the end-users, Canadian

municipalities. Mexico is the next most lucrative market

for U.S. process equipment for largely the same reasons,

followed by the United Kingdom and Central and Southern Europe.

U.S. companies are not seen as being highly competitive in the market for emerging process technologies (for

example, membrane and advanced oxidization technology). Two Canadian companies (Trojan Technologies and

Zenon) dominate the North American market. Competing against these major Canadian exporters of water and

wastewater treatment process equipment are German,

French, Japanese, and Dutch companies.

Two highly successful U.S. ultraviolet industrial water treatment companies have been bought outright or

have entered into joint ventures with the German giant

WEDECO GmbH based in Dusseldorf. Ideal Horizons

30. “Global Environmental Markets 2000,” Environmental Business

Journal, vol. XII, no. 9/10, 2000.

31. The Harmonized Tariff Schedule of the United States is published

by the U.S. International Trade Commission based on the international Harmonized System, the global classification system that is

used to describe most world trade in goods. 32. Ibid.
14 U.S. Department of Commerce, International Trade Administration

(based in Poultney, Vermont) has been bought by

WEDECO and is known now as WEDECO-Ideal Horizons. The firm remains prominent in the area of industrial process water UV disinfection systems, as well as

residential and commercial units for home and office use

in North America.

Aquafine (based in Valencia, California) is competitive overseas in the area of ultraviolet water treatment

equipment for pure and ultra pure applications (for example, the semiconductor and pharmaceutical industries).

However, even successful companies like Aquafine are

entering into multinational relationships to increase market exposure. Aquafine has recently formed a joint venture with WEDECO. The new company, Aquafine

Wedeco Environmental Systems, Inc., will manufacture

and sell WEDECO’s ozone generators, ultraviolet disinfection and oxidation systems, and fixed-film biological

treatment equipment in North America and Mexico.

Delivery Equipment

Export of delivery equipment (pumps, pumping

equipment, industrial valves, pipes, storage tanks, etc.)

is constrained by the fact that these products are heavy

and do not have high profit margins. As a result, the

high cost of shipping and delivery leaves little room for

profitability.

Although the United States is the world’s single largest producer of water and wastewater delivery equipment,

only 10 percent of all U.S. delivery equipment revenues

is from exports. The European Union produces twice the

amount, in gross sales, of pumps and pumping equipment, compared to the United States. Delivery equipment

industry leaders include firms in the United Kingdom,

France, Germany, and Japan, with Germany being the

largest producer. Most German firms in this business are

medium-sized and specialize in one or two branches of

the delivery equipment market.

Two U.S. companies have proved to be competitive

in the market for pumps: Gorman Rupp and Gould.

Gorman Rupp produces pumps for the industrial, municipal, sewage, construction, and petroleum markets.

Gould makes pumps for the industrial and water technology sectors. They are known for producing the world’s

leading line of residential water well pumps. These two

companies have positioned themselves well, and are competitive with the Swiss and German pump companies.

Gorman Rupp has even managed to make inroads into

the northern European markets.

Many mergers, acquisitions, and consolidations have

been occurring in this market segment. In France, the

major integrated firms, specifically Vivendi and ONDEO,

are involved in the water and wastewater delivery equipment market through subsidiaries. Many British delivery equipment producers are also mechanical engineering

firms.

Japan has shrunk its domestic production, so its competitiveness may have increased elsewhere. Japanese

firms generally do not export or market delivery equipment exclusively, but instead rely on government technology transfer programs for developing countries. Japan

is the largest distributor of water and wastewater delivery equipment in the Asia Pacific region, followed by

the United States and the European Union.

Chemicals

Chlorine, the most prominent chemical used in water

treatment, is produced virtually worldwide. Activated

carbon, another large-volume product, is produced primarily in Japan, Belgium, France, Germany, Italy, the

Netherlands, and the United Kingdom (as well as the

United States). To a lesser extent, activated carbon is also

produced in East Asian countries. Two other common

water treatment chemicals, aluminum sulfate (alum) and

calcium hydroxide (slaked lime) are produced throughout the world. In 1998, U.S. companies exported over

8,000 tons of alum, and more than 6,800 tons of slaked

lime.33

The fastest growing part of the water treatment chemical industry is specialty chemicals for advanced water

33. Export Commodity Report, Oregon State University, 1994–1998.

Figure 2.1. Top Delivery Equipment Producing Countries

United

Kingdom

Japan Germany

France

United States

Source: “Global Environmental Markets 2000,” Environmental

Business Journal, vol. 12, no. 9/10 (Sept./Oct.2000).
Water and Wastewater Export Market Plan 15

and wastewater treatment systems. Specialty chemicals,

such as certain polymeric materials used in filtration devices, are produced mainly in the United States, Japan,

and Western Europe.

The total global market for specialty water management chemicals was estimated at $6.2 billion in 1998 and

is growing at 3.2 percent per year, with North America

comprising more than half of this market, followed

by Western Europe and Japan (see Table 2.2).34 The

European market is approaching saturation, while the

largest growth opportunities should arise in developing

countries.

The United States exports more chemicals than most

other countries—20 percent of U.S. companies’ total revenues from water chemicals are generated by exports.

Canada is the largest export market for the United States,

followed by Japan and Mexico. Nearly 45 percent of total U.S. exports of water and wastewater treatment chemicals consist of activated carbon and ion exchange resins.

34.“The U.S. Water Industry,” Environmental Business Journal, vol.

XII, no. 7/8, 1999.

Table 2.2. Global Specialty Water Chemicals Market, 1998 (millions of U.S. dollars)

End User North America Western Europe Japan Other Total

Heavy Industry 1,700 900 450 500 3,550

Light Industry 700 300 150 100 1,250

Commercial Sector 600 140 100 50 890

Municipal Utilities 200 160 100 50 510

Total 3,200 1,500 800 700 6,200

Source: Environmental Business International, 1999.

Sources: “Global Environmental Markets 2000,” Environmental Business Journal, vol. 12, no. 9/10 (Sept./Oct. 2000); U.S. International

Trade Commission, Global Competitiveness of U.S. Environmental Technology Industries: Municipal and Industrial Water and Wastewater,

publication no. 2867 (Washington, D.C.: U.S. ITC, March 1995).

Figure 2.2. Best Prospect Markets for Instrumentation

Japan

Canada

United Kingdom

Germany

Established Markets Up-and-Coming Markets

South

Korea

Mexico

Taiwan

France
16 U.S. Department of Commerce, International Trade Administration

Instrumentation

The United States is the world’s largest producer of

water and wastewater instrumentation. U.S. environmental instrument manufacturers generate more than a third

of their revenues from water and wastewater applications.

While the U.S. instrument industry is competitive in domestic and foreign markets, particularly due to high levels of investment in research and development,

technological sophistication, after-sales service, and competitive pricing, it has been experiencing increased competition from foreign firms in recent years.

Several U.S. instrument manufacturers have production and distribution capabilities in many industrialized

countries (for example, Germany, Britain, Japan, and

Canada). Most water and wastewater instrumentation is

produced by a large number of medium-sized and small

companies. Smaller companies involved in the instrument

sector typically market their instruments through independent distributors, while the larger companies generally market directly to end users.

To date, the majority of U.S. instrumentation exports

have gone to Canada, Japan, Germany, France, and Britain. At the same time, exports to emerging market nations, such as Mexico, South Korea, and Taiwan, have

grown twice as fast in recent years as exports to OECD

markets.

The quality of instrument production in countries like

Britain, France, Italy, Germany, and Japan is comparable

to that of the United States. About 55 percent of the

world’s process control instruments, analytical instruments, and on-line analyzers are produced by manufacturers in these countries, along with about 80 percent of

water meters. Germany is the largest producer in the European Union, accounting for 50 percent of the production volume.35

Engineering and Construction Services

U.S. engineering and construction firms are well

known around the world for their expertise and quality

of their work. Large design firms such as Montgomery

Watson, Black and Veatch, and Earth Tech remain leaders in revenue from international water and wastewater

projects. They share this distinction with NEDCO (Netherlands) and Dar Al-Handasah (Egypt).36 Over the past

several years, with the downturn in the Asian and Brazilian economies, the international design market wavered

and has yet to return to steady growth. The market is

becoming more complex with international acquisitions

and diversification into integrated service providers,

meeting the design-build-turnkey needs of international

clients. For example, Earth Tech, a global environmental and engineering technology company owned by Tyco

International, has grown in the water market through varied acquisitions. Earth Tech’s acquisition of Brazil’s

Multiservice Engineering Ltd. in 1998 opened up

privatization opportunities in Latin America, the

company’s primary area of focus. Similarly, the 1999

purchase of the British firm Babcock Water Engineering

was an essential step in Earth Tech’s business development in Western Europe.

International contracting is continually plagued by risk,

as confirmed by the financial troubles of Stone and

Webster (purchased by the Shaw Group in 2000), and

Germany’s Philipp Holzmann, and South Korea’s largest contractor, Hyundai Engineering and Construction.

Nevertheless, the $2.5 billion of international wastewater construction activity in 1999 was led by the U.S.-based

Bechtel Group, Inc., followed by Skanska AB (Sweden)

and Ed. Zublin AG (Germany). The $3.2 billion international water construction activity was led by Italy’s

Impreglio, SPA, followed by the Dragados Group (Spain)

and Vinci (France). The future water and wastewater

opportunities appear to be favorable in some Asian countries such as South Korea, Japan, and Taiwan, Eastern

Europe, and the Middle East.37

Foreign firms providing engineering and construction

services in the water and wastewater sectors, especially

those in France, the United Kingdom, and Germany, tend

to be larger and more integrated than those in the United

States, and typically concentrate on these sectors. For

example, Germany’s RWE Group (which has recently

acquired Britain’s Thames Water) offers design and construction services for water and wastewater treatment

plants but is also a supplier of water-related products and

other environmental services. When project specifications

call primarily for engineering and construction services,

U.S. companies are very competitive; however, when clients are looking for a turnkey project, integrated firms

such as Vivendi, ONDEO, and RWE often have an

advantage.

37. “Slow Growth, High Hopes,” Engineering News Record, August

14, 2000.

35.Global Competitiveness of U.S. Environmental Technology Industries: Municipal and Industrial Water and Wastewater, U.S. International Trade Commission, 1995.

36. “The Top 200 International Design Firms,” Engineering News

Record, July 17, 2000.
Water and Wastewater Export Market Plan 17

In order to succeed in the international market for

water and wastewater technologies and services, U.S.

firms should be aware of the realities of doing business

overseas, know and be able to take advantage of particular market characteristics, and use available information

support services.

A recent survey of the San Francisco Bay area’s environmental technology exporting firms38 sought to identify critical success factors in overseas markets. In the

survey, the following four themes were mentioned most

frequently by the exporting companies:

 Understanding country markets, or becoming

familiar with a specific country, its culture, work

habits, and language;

 Building alliances and working effectively with

partners in export countries;

 Access to financing for export activities; and

 Having experienced in-house staff dedicated to

exporting.

This chapter presents market strategies for three of

these success factors (staff dedication is a matter of internal company policies and is not considered here). It

also describes other competitiveness strategies such as

building joint ventures and consortia with U.S. and thirdcountry firms. It provides important hints on how to enter and compete in promising overseas markets and how

to pursue international water and wastewater projects. It

also refers exporters to the information resources available through a multitude of U.S. public sector service

organizations.

Understanding Local Markets

The first step in a successful export market strategy is

knowing where the markets are and how to access them.

To a “new-to-market” company, export markets can seem

daunting and inaccessible, particularly from an office in

the United States. The most successful companies, be they

large or small, are those that do their homework. Knowing the stage and pace of market development as well as

the local business culture is critical in prioritizing business development efforts. Many companies find that to

gain substantial market share, they must be the first one

on the ground in the targeted country, which often involves years of education and product orientation prior

to any direct sales. Because of the large amount of time

and resources required for this approach, many early

market opportunities are available only to the larger U.S.

water and wastewater equipment manufacturers.

Host Government Regulations

Successful exporting requires an in-depth understanding of host government regulations and an understanding of how these regulations are implemented.

Chapter 3

Increasing Competitiveness of the U.S. Water Industry

38. “Global Environmental Markets 2000,” Environmental Business

Journal, vol. XII, no. 9/10, 2000.

Case Study 3.1. Developing Water Projects in

Emerging Markets: What Does It Take to

Succeed?

Thierry Baudon, Managing Director of ONDEO’s

International Finance Division, identified five success

factors in emerging water and wastewater markets:

1. Develop superior technical and customer management skills, through continuous research.

2. Develop a thorough understanding of the local

environment, including the local institutions, politics,

and civilian society.

3. Develop strong industrial and financial partnerships (with local business partners, international

investors, and multilateral financial institutions).

4. Develop innovative financial engineering capabilities and risk management techniques.

5. Construct a corporate culture that rewards

pioneering attitudes, strong ethics, and decentralized

decision-making.

Source: T. Baudon, “Developing Water Projects in Emerging

Markets: What Are the Challenges and What Does It Take to

Succeed?” Global Infrastructure Development: World Markets

in 1999 (Standard and Poors, 1998).
18 U.S. Department of Commerce, International Trade Administration

Developing an understanding of local institutional, regulatory, and decision-making processes and frameworks,

as well as establishing local political connections and

partnerships, are critical steps to achieving success in

export markets.

Most countries have business registration requirements, and tax and business issues that can be very unfamiliar to American companies. Many countries also

require local incorporation. These requirements are not

real barriers in most instances, but sometimes appear to

be as approvals move slowly. Restrictive business practices, such as requiring local ownership of the majority

of the business, are fading away in most countries, in

part due to the trend of globalization.

Since water and sewerage services are usually the responsibility of municipalities, there are relatively few

bureaucratic hurdles for exporters to overcome. The industrial sector, on the other hand, is typically regulated

at the national level through central or regional offices.

Factories that have been targeted by the authorities and

are subject to enforcement actions often represent attractive opportunities to market industrial wastewater treatment equipment. Therefore, it is important to monitor the

target country’s regulatory developments in the water

sector.

Local Business Culture

U.S. businesses often find that local business customs

and norms, as well as cultural practices, present more of

a challenge to exporting than many of the bureaucratic

hurdles. Establishing, maintaining, and expanding business overseas can be particularly frustrating because of

the volume of communication required. Many companies identify a lack of understanding of the local culture

as being a key factor in the difference between a successful and a failed business negotiation.

Some of the most challenging areas for U.S. businesses

are different notions of property and acceptable levels of

risk, and different tax and contract laws. Local partners

often do not understand the need to address these risks,

or simply want the U.S. firm to bear all the risks. Again,

good communication is necessary to work out these issues with the local affiliate.

U.S. companies have also long complained about the

bribes and gratuities that officials in some countries expect for anything from copies of bid documents and key

data, to final award of a contract. In some European countries, such payments are considered legitimate business

expenses. U.S. firms typically must market on quality

and price only, and cannot offer such gratuities due to

the Foreign Corrupt Practices Act.

To avoid some of the problems discussed above, U.S.

businesses should take advantage of the available resources to learn about the local business culture and to

recruit the help of a local business advocate. For more

details, see Appendix D.

Market Intelligence Information

A successful export market strategy relies on good information about the target overseas market conditions,

competitors, business culture, and specific needs and

opportunities. The importance of developing an export

strategy cannot be overstressed. Many small and medium-sized businesses, however, lack the resources or

expertise to export on their own. In addition, many

smaller companies find it difficult to develop an export

strategy. The case study below illustrates the difficulties

in exporting without a comprehensive, well-designed

overseas marketing strategy.

Case Study 3.2. Pipe Repair Manufacturer

Export Activities Limited by a Lack of Strategy

An American-owned and Texas-based company manufactures fittings and fabrications for the repair, connection, and branching/tapping of all types and sizes of pipes.

Their products are used for water, wastewater, industrial,

and manufacturing piping, as well as for irrigation and

natural gas pipelines. Currently, the company has 160

employees and 2 to 3 percent of its business is international. The company’s limited successes exporting repair

products have been in the border regions of Mexico,

Panama, and the Caribbean.

The company began exporting approximately five

years ago when Mexican clients heard about it from colleagues in the Caribbean. Since then, however, it has not

developed an export strategy to solidify and expand its

international presence.

The company relies on contacts made at national and

international expositions to find leads and often waits for

those who have expressed interest to call. In addition, it

does not have a formalized process for finding local affiliates. The company has tried using a sales representative, but the mixed results have made it disinclined to

rely as heavily on this approach. All of this suggests a

poorly formed export strategy.

The company wants to use its existing base to

strengthen its presence in Central America, but is likely

to continue to face substantial obstacles until it develops

a strong marketing strategy.

Source: Primary interview with company staff.
Water and Wastewater Export Market Plan 19

39. “Wastewater Instrument Firm Sees Opportunity Abroad,” Global

Environmental Markets 2000, Environmental Business Journal, vol.

XII, no. 9/10, 2000.

Gathering information on the market can be done with

limited travel and expense by using e-mail, the Internet,

a telephone, and a fax machine. U.S. government assistance programs provide several types of information that

can be useful for U.S. companies seeking market intelligence, including:

 Market reports (produced by the Department of

Commerce and USAID), as well as Country Commercial Guides published by the Departments of

State and Commerce for many countries (see Appendix D for more information); and

 Information from in-country U.S. Commercial

Service Representatives and/or Technology Representatives supported under USAID’s U.S.-Asia

Environmental Partnership (US-AEP) and Ecolinks

initiatives (see Appendix B for more details).

Other sources that can provide market intelligence information include the World Trade Centers Association,

an association consisting of over three hundred trade centers worldwide, international accounting firms, as well

as many consulting firms. For some companies, having

access to proprietary information that gives them the edge

over competitors is a worthwhile marketing investment,

despite the steep costs. A company can utilize these resources to begin to identify and prioritize country markets for particular products or services. At the same time,

firms can learn which U.S. and foreign companies are

active in the country and evaluate their competitiveness.

Companies can also take advantage of trade promotion opportunities, including catalogue shows, trade missions, agent distributor searches, and the U.S. Department

of Commerce’s Gold Key Program, which help U.S. firms

access overseas markets.

Positioning to Enter the Market

When positioning themselves to enter foreign markets,

companies must consider the differences in legal, political, and social environments between home and host

countries. Developing an understanding of a foreign

country’s business climate and customs is often greatly

assisted by developing local relationships.

Exporting firms can use two principal strategies in order to increase their competitiveness or establish a local

presence:

 Establishing local representation and partnerships,

and

 Engaging in joint exporting activities (through joint

ventures or consortia) with other U.S. firms.

The case study of Komline-Sanderson (see Case Study

3.3) is an example of a medium-sized company that has

effectively positioned itself overseas by remaining flexible, seizing opportunities when they arise, and developing strong relationships with its foreign colleagues.

Case Study 3.3. Komline-Sanderson: Small

Company Effectively Develops New Export

Opportunities

Komline-Sanderson of Peapack, New Jersey, is a medium-sized business that makes water quality instruments, primarily for liquid/solid separation. It has been

working to develop overseas opportunities for its products. Currently, 10 to 15 percent of the company’s business is with foreign industrial and municipal clients.

Komline-Sanderson has found its small size to be both

a detriment and a benefit when exporting overseas. As

Jabez Van Cleef, director of communications, stated in

the Environmental Business Journal, “our size constrains

us from building an extensive service and information

infrastructure overseas, but it permits us to respond

quickly if a market opportunity presents itself.”39

Komline’s flexibility has made it possible for it to get

a foothold in new markets. The company has been content to sell different products to different markets and to

use these footholds as a “springboard” into neighboring

and other product markets. For example, it is currently

selling industrial process and filter technology in Mexico,

machinery for sludge concentration in municipal wastewater treatment in the United Kingdom, and filters for

corn-syrup processing in China. Now the company’s associates in China and Mexico are actively working to

develop the municipal wastewater side of the business.

Driven by the idea that building a relationship of trust

is key to successful exporting, the company’s marketing

strategy has benefited from the company’s small size.

Also, unlike the competition, Komline is unwilling to

“oversell” its products and prefers instead to be forthright about such things as product lifetime. This honesty

and the relationship of trust KS develops with its clients

will further assist the company’s export efforts.

For further information, visit the Komline-Sanderson

Web site at www.komline.com.
20 U.S. Department of Commerce, International Trade Administration

Building Local Relationships and Establishing a

Local Presence

Local partnerships and representation not only provide

U.S. firms with the advantage of learning about opportunities before their competitors, but also provide a source

of inside information on local business culture. Establishing a presence in a country requires both time and

investment of human and financial resources. Some type

of “foreign presence” accounts for approximately 95 percent of foreign sales of water treatment and infrastructure equipment and systems.40

Methods for establishing local presence range from

hiring a local consultant or agent to represent the firm,

to setting up a local office. Perhaps the most common

arrangement is to establish a relationship with a local

business that has both a good reputation and solid industry contacts. This company can then effectively market

and distribute the American company’s product for a percentage of the profit.

In exploring the options for local representation, the

firm must determine which option is the most viable given

its financial and human resource limitations. U.S. companies should also be familiar with the host country’s

rules and regulations concerning the establishment of local offices and partnerships with local organizations.

Valuable information can be found in the U.S. Department of State’s Country Commercial Guides.

There are several ways U.S. companies may establish

a local presence in a developing country market:

 Agents. U.S. equipment manufacturers may establish relationships with agents to import and sell

their products in the local market. There are a

number of U.S. government programs (see

Appendix D) that assist exporters in finding local

agents and distributors.

 Local Office. Establishing a local office helps

companies respond faster to sales opportunities. In

equipment sales, a local branch can provide comprehensive service from the customized design and

installation of a technology to technical support and

after-sale maintenance. For a long-term commitment

to a region or a country, a local subsidiary may lead

to the best results. This strategy is generally also

most effective for bidding on large infrastructure or

technical assistance projects sponsored by USAID,

the World Bank, and other donors whose tenders are

open for U.S. companies.

 Joint Venture. U.S. companies may want to establish a joint venture or partnership with a local firm.

Local firms bring critical familiarity with the incountry regulatory environment and exclusive

technical knowledge important in adapting U.S.

technologies and engineering to local conditions. In

some countries, regulations require a link with a

local firm, or even call for foreign companies to

limit their participation to minority status. Local

firms tend to provide cost-effective resources,

allowing U.S. companies to be more competitive.

This also allows access to projects that are bid in the

country itself. Knowing the local partner and his/her

credibility is critical to successful partnerships and

projects. Another critical factor is that of commitment, or a willingness to participate, on the part of

the local partner. It is recommended that a firm

conduct due diligence on its prospective partners, for

it is much easier to form a partnership than it is to

dissolve one. The costs of breaking ties with a local

firm can cost a U.S. company its reputation in the

local market.

 Partnership with a Third-Country Firm. U.S.

firms may choose to enter a country market through

a partnership with a third-country firm that has

strong local representation. For example, teaming

with Indian firms can help U.S. companies gain

access to other Asian markets. Teaming with European or Japanese firms that already have a substantial market share in the country may also prove

beneficial.

The Hach Company has successfully built an export

business that relies on close relationships with distributors abroad. Their case is presented below.

Joint Exporting Partnerships

Before entering an overseas market, U.S. firms must

decide whether they are able to enter that market and

whether it is worthwhile to do so—in terms of ability to

compete and resource availability. By exporting in partnership with each other, U.S. firms can increase their

competitiveness and each firm can benefit from lower

individual export costs and increase its efficiency in every phase of exporting. Multinational companies can be

important partners for small and medium-sized environmental firms seeking to supply goods and services to large

donor-financed projects but unable to bid on such projects

directly. Small and medium-sized enterprises can often

provide niche services that will serve as an asset to a

larger firm and increase the likelihood of overall success.

Firms of all sizes and levels of international business ex40. Competitive Analysis of U.S. Environmental Exports and Global

Market Update, Environmental Business International, 1995.
Water and Wastewater Export Market Plan 21

perience can use joint exporting to reduce per unit export costs and develop proactive export strategies which

may not be feasible for individual exporters.

The ability to reduce export costs and risks is especially important when considering entry into a new or

complex export market. While specific benefits will vary

with the nature of the product and the targeted foreign

markets, joint venture partners may enjoy the following

advantages as a result of their alliance:

 Market research. U.S. firms can cooperate to share

the costs of foreign market research (including

hiring expertise), travel, and overseas activities.

 Market development. U.S. firms can reduce the

costs of market development activities (for example,

overseas trade shows and missions) through joint

activities. Firms with complementary products can

offer more attractive “full line” packages to prospective buyers. Cost reductions can also be achieved by

jointly conducting generic advertising intended to

cultivate or increase demand for U.S. products and

services.

 Joint bidding. U.S. firms can increase sales and

profits through joint bidding. As a consortium, the

companies can bid on projects that go beyond the

capacity of the individual member firms.

“The advantages of entering into distributor and dealer

relationships far outweigh the costs,” says Paul Goltz, director of international sales and marketing, The Hach

Company.

The Hach Company of Loveland, Colorado, is an internationally recognized manufacturer and distributor of

analytical instruments and reagents used to test the quality of water and other aqueous solutions. The company

employs almost 1,000 people in the United States and has

been selling its products overseas since the 1950s. Hach

has built a professional distributor network in over 100

countries; most dealers and sales representatives have well

over 10 years of service working with the Hach Company

and building markets for its products.

The Hach Company believes that strong local relationships are key to export success. Local affiliates fulfill such

critical functions as negotiating new and sometimes frustrating business climates, arranging payment, and addressing tariffs and other barriers.

The Hach Company has established a formal process

for selecting and training local distributors, but it also believes that the enthusiasm and capability of the selected

local affiliate is critical. Hach representatives look for key

characteristics such as honesty, motivation, and a strong

commitment to growth.

Hach identifies dealer prospects through the Agency/

Distributor Service and the “Gold Key Service” of the

Rocky Mountain U.S. Export Assistance Center and by

making solid contacts at the U.S. Department of

Commerce’s trade and catalogue shows. Other prospective dealers have been located through responses generated from their ongoing, multilingual promotional efforts

and through overseas Technical Sales Seminars.

Overseas dealers are required to become experts on all

facets of the Hach product line. As a result, the company

has established an exhaustive process for training its distributors. Distributors are encouraged to visit the headquarters and the Hach Technical Training Center for

hands-on training. In addition, they are required to attend

factory-sponsored instrument repair courses presented in

the United States and abroad. Since 1996, Hach has held

technical sessions for its distributors in Australia, South

Asia, Southern Africa, the Pacific Rim countries, the Caribbean, and Latin America.

Recently, the Hach Company expanded its Central

Asian presence into Kazakhstan. The business climate and

language in this former Soviet economy pose a challenge

to American companies. Finding a good local distributor

is critical to its success in this market. Hach’s approach

was to send staff to the country to identify and build a

relationship with a new distributor or sales representative.

After a number of years of work, Hach identified a promising distributor candidate. Hach staff sent used equipment

to Kazakhstan so that the distributor and its customers

could see and feel the products. Now, Hach has applied

for U.S. Commerce Department funds to bring its Central

Asian distributors to the United States for training. Growth

has been slow in the new market, but the company is already beating internal projections. This is in large part due

to the fact that its distributor demonstrates the real enthusiasm and excitement that Hach requires of its affiliates.

For more information, contact Paul Goltz, director of

international sales and marketing at (800) 227-4224 or the

Web site at www.hach.com.

Source: Primary interview with Paul Goltz.

Case Study 3.4. Building a Network of Top-Notch Local Distributors: The Hach Company
22 U.S. Department of Commerce, International Trade Administration

 Joint selling arrangements. The partners can have

joint selling arrangements – use the same overseas

representative, agree to sell separate products as a

unit, prepare joint catalogs, and allocate among

participating partners the sales which result from

joint bidding or selling arrangements.

 Combined sales support. Joint exporting partners

may engage in a variety of activities that will

promote or support their combined export sales.

These activities might include establishing shared

warranty service and training centers, conducting

joint trade shows or missions, and joint advertising.

In addition, the pooling of credit information may

open up new avenues for export financing.

Joint export ventures undertaken by domestic competitors might raise questions under U.S. antitrust laws. Fortunately, any company may apply to the Department of

Commerce for an Export Trade Certificate of Review.

The certificate provides exporters with antitrust protection with regard to all export activities specified in the

certificate.

Funding and Financing Options

This section identifies funding and financing sources

for exports of U.S. water and wastewater technologies

and services. Development assistance is a primary driver

in the water and wastewater sectors of emerging market

countries. Multilateral development agencies strongly

support, through technical and financial assistance, water supply infrastructure, wastewater treatment systems,

and watershed clean-up projects, representing significant

market opportunities. This section also considers U.S.

investment and export credit programs that are particularly relevant to U.S. technology and services companies,

as well as other funding and financing sources.

Multilateral and Bilateral Projects

Bilateral and multilateral development agencies provide the bulk of funding and financing for environmental and infrastructure projects in developing countries

(Appendix A contains a summary of ongoing multilateral and bilateral water-related projects). Among the various types of market opportunities that arise from bilateral

and multilateral funding sources, the two primary opportunities are equipment sales and technical assistance. To

reduce the risk for U.S. companies providing goods and

services, payments are typically made in foreign exchange (often U.S. dollars), which makes donor-supported projects particularly attractive to U.S. firms.

Project funds are used to procure the goods, equipment,

contract works, and consultant services needed to design

and implement these projects, either directly from

the funding agency or through loans to the host country

government.

Multilateral Development Banks

The multilateral development banks that are central

to many U.S. companies’ export market strategies include

the World Bank, the Asian Development Bank (ADB),

the Inter-American Development Bank (IDB), and, to a

lesser extent, the North American Development Bank

(NADBank), the European Bank for Reconstruction and

Development (EBRD), and the African Development

Bank (AfDB). The World Bank also manages the Global

Environment Facility (GEF), which has emerged as a

key funding source for international waters protection

programs.

An overview of the key multilateral and bilateral development banks is provided below (contact information

for these institutions is listed in Appendix B). Information can be gathered by contacting each individual

agency.

The World Bank Group. The World Bank Group is the

largest source of international development financing and

includes the International Bank for Reconstruction and

Development (IBRD), the International Development

Agency (IDA), the Multilateral Investment Guarantee

Agency (MIGA), and the International Finance Corporation (IFC). The borrower, not the bank, is always responsible for procurement. The Bank provides financing

from its loans for the contracts, but the contract itself is

between the borrower and the supplier or contractor. The

Bank’s role is to make sure that the borrower’s work is

done properly, that the agreed procurement procedures

(for example, international competitive bidding) are observed, and that the entire process is conducted with efficiency, fairness, transparency, and impartiality.

Suppliers, contractors, and consultants can learn more

about this process by attending a Monthly Business Briefing at World Bank headquarters in Washington, D.C., or

reading the Guide to International Business Opportunities. The briefings explore strategies for keeping informed

about projects and methods for pursuing foreign investment opportunities. The bank issues numerous publications, including Environment Matters, which summarizes

its environmental operations. The World Bank’s environmental projects are summarized in its published portfolio, Facing the Global Challenge: A Progress Report on

the World Bank Global Environment Operations.
Water and Wastewater Export Market Plan 23

To assess the qualifications of firms and to assist borrowers in establishing a short list, the bank maintains a

computerized roster of consulting firms interested in doing business on bank-financed projects, called the Data

on Consulting Firms (DACON) system. (There is no

similar registration system for manufacturers and other

suppliers of goods or contractors for works.)

The United Nations publishes a biweekly digest called

Development Business which is available by subscription. Development Business carries information on business opportunities generated through the World Bank,

regional development banks, and other development

agencies. Development Business is also available by

online subscription. More information may be obtained

by contacting the World Bank’s Development Business

Liaison Office (http//www.devbusiness.com).

Global Environment Facility (GEF). Projects funded

by the GEF are implemented by the World Bank, the

United Nations Development Program (UNDP), and the

United Nations Environment Program (UNEP). GEF

projects to reverse the degradation of international waters help realize the objectives of various regional and

international water agreements. The three categories of

water projects are: water bodies; integrated land and water projects; and contaminants. From 1991 to 1999, GEF

allocated nearly $360 million to international waters

initiatives.

Inter-American Development Bank (IDB). The IDB

provides capital for different types of infrastructure

projects in 26 Latin American and Caribbean nations. The

Bank uses funds to sponsor the development of its

member countries by supplementing private investment

when private capital is inaccessible. Technical

assistance for the preparation, financing, and implementation of development plans and projects is also provided

by the IDB. Individuals, firms, and organizations that

want to learn how to bid on contracts to provide goods

and services for projects financed by the IDB should attend its business seminars. The topics covered in the seminars will help participants develop or expand their

participation as suppliers of goods and services in the

wide variety of sectors financed by the Bank. These seminars are highly recommended for equipment manufacturers, goods suppliers, work and construction

contractors, independent consultants, and consultants

from universities, think tanks, and non-governmental organizations (NGOs). The IDB publishes the IDB Project

Magazine.

Asian Development Bank (ADB). The ADB provides

assistance to 33 developing countries in the Asia-Pacific

region, including China, India, and the Philippines. The

Bank makes loans and equity investments, and provides

technical assistance for the preparation and execution of

development projects and programs. The ADB holds

Business Opportunities Seminars in different member

countries throughout the year (the ADB’s North American office is located in Washington, D.C.). The ADB also

publishes the ADB Business Opportunities on a monthly

basis. The online edition of the ADB Business Opportunities can be found on the ADB website and is updated

weekly.

African Development Bank (AfDB). The AfDB primarily assists the governments or government-owned corporations in member African countries. To better direct

financial assistance to environmental sectors, the bank

has prepared country environmental profiles. The AfDB’s

operational program has four main priorities: elimination

of poverty, reconstruction and rehabilitation, development

of the private sector, and increasing trade and economic

integration. The AfDB is also involved in various other

sectors, ranging from infrastructure to the economy, including the environment, health care, and demography.

European Bank for Reconstruction and Development

(EBRD). The EBRD, based in London, assists countries

of Central and Eastern Europe and the former Soviet

Union. The financial assistance provided by the EBRD

is directed at restructuring and privatizing industries or

financing infrastructure in support of these two aims. By

mandate, at least 60 percent of EBRD financing must be

for private sector operations.

North American Development Bank (NADBank). This

bilateral institution, agreed to by the United States and

Mexico in connection with the North American Free

Trade Agreement (NAFTA), assists U.S. and Mexican

border states in addressing environmental problems.

NADBank is providing financial assistance for water and

wastewater treatment projects along the U.S.-Mexican

border.

To participate successfully in multilateral donor-assisted projects, companies must understand the donor’s

project cycles and bidding procedures. Companies can

identify and track project opportunities by subscribing

to a donor agency’s project notices publication. The typical stages of a project cycle are identification, preparation, appraisal, and implementation. The cycle can last

as long as several years. During this long lead time, companies should familiarize themselves with relevant host

country institutions and market conditions.

Although companies may contact donor agencies and/

or relevant recipient country agencies at any stage of the
24 U.S. Department of Commerce, International Trade Administration

project preparation, early involvement is often critical.

For example, feasibility studies sometimes conducted in

the early phases of the project usually contain valuable

technical and contact information. It is also advisable to

start forming alliances with local counterparts at the early

stages of project development.

United States Agency for International Development

(USAID). USAID is the main U.S. bilateral donor

agency. It offers economic development and humanitarian assistance (in the form of grants) to advance U.S. economic and political interests overseas. U.S. foreign aid

also creates markets abroad for U.S. goods and services

by offering a competitive advantage to U.S. suppliers

(procuring from U.S. suppliers is mandated by USAID).

USAID promotes environmental improvements in host

countries by providing technical demonstrations designed

to help industries recognize the need for and benefits of

cleaner production and cleaner technology. The agency

also provides policy and institutional support to aid host

country governments in developing environmental

management and pollution prevention policies and

regulations.

USAID projects are usually bid out of in-country

USAID missions and are announced in the Commerce

Business Daily. Contracts are typically one to five years

in duration, with value between $1 million and $100 million. Consortia of several companies, usually consulting

and engineering firms, have greater chances for success

in bidding for USAID projects than individual companies. Companies with local offices that are known to

USAID missions find themselves in an advantageous

position compared to firms unfamiliar to USAID.

Tied Aid Issues

“Tied aid” is government-to-government assistance—

including loans, grants, or concessional (subsidized) financing—that is tied to, or conditioned on, the purchase

of goods or services from the donor country and/or a restricted number of countries. Many industrialized countries (Japan, France, Germany, etc.) use tied aid as a

subsidy program to facilitate market entry and expansion

for their private companies, making such funding unavailable to U.S. companies.

Executives of U.S. environmental exporting companies complain that many foreign governments are spending far more on the promotion of exports of their national

companies to developing countries, placing U.S. firms

at a distinct disadvantage in the global market.41 The case

study presented below illustrates this issue.

The U.S. policy with respect to tied aid has been to

avoid an expensive export subsidy race and to negotiate

with other OECD countries to minimize the use of tradedistorting tied aid. Successive rounds of multilateral negotiations led by the Treasury Department and the U.S.

Export-Import Bank (Ex-Im Bank) produced the Helsinki

Package, an agreement that went into effect in 1992 and

established rules prohibiting tied aid for projects that are

commercially viable—that is, capable of generating cash

flows sufficient to repay standard commercial loans.

41. David R. Berg, Meeting the Challenge: U.S. Industry Faces the

21st Century: The U.S. Environmental Industry (Washington, D.C.:

U.S. Department of Commerce, Office of Technology Policy, 1998).

Case Study 3.5. Tied Aid Restricts the Export

Activities of Aqua-Aerobic Systems, Inc.

Aqua-Aerobic Systems, Inc., of Rockford, Illinois, is a

leading manufacturer of wastewater treatment products

and systems for industrial and municipal applications.

The company has over 100 sales representatives globally,

and approximately 130 employees in Rockford.

Aqua-Aerobic Systems has had notable successes in

the developing world where municipal wastewater

projects received USAID and multilateral development

bank funds. Still, it estimates that its market opportunities in this area have been limited by as much as 50 percent due to the phenomenon of tied aid, according to

Sharon DeDoncker, the company’s vice president of international sales.

Shortly before the Asian financial crisis erupted in

1997, the German government provided bilateral aid for

a large municipal wastewater project in Indonesia. AquaAerobic had the necessary vendor qualifications and

worked hard to meet the source requirements of the German aid. Its efforts at developing vendor relationships

in Germany were not successful, and it ended up losing

the project to a German company.

Aqua-Aerobic is writing letters to members of Congress regarding its tied aid concerns. In addition, the company continues to work to develop foreign partnerships

that will open up bilaterally-funded projects to it.

For further information, contact Peter Bugg, International Sales Department, at (815) 654-2501 or visit the

company’s Internet site at www.aqua-aerobic.com.

Source: Primary interview with Sharon DeDoncker.
Water and Wastewater Export Market Plan 25

While the Helsinki Package agreement has largely

eliminated tied aid for commercially viable projects, the

U.S. Ex-Im Bank has also created the Tied Aid Capital

Projects Fund to match other countries’ tied aid offers

for certain key projects in order to counter and preempt

foreign donor governments’ efforts to use aid to gain longterm commercial advantages for their exporters.42

Relevant U.S. Government Investment and Export

Credit Programs

USAID Development Credit Authority. The Development Credit Authority (DCA) is a general authority that

permits USAID to offer credit assistance for any development purpose of the U.S. Foreign Assistance Act. The

DCA is intended to serve as an alternative funding vehicle to assist USAID missions in meeting their specific

strategic objectives. DCA is intended for countries and

regions where USAID has an active presence. Global climate change activities are the key sector for which

USAID intends to use DCA.

The credit assistance is in the form of direct loans and

loan guarantees. Loan terms are related to the needs of

each project but will not exceed 20 years. Loan guarantees are used only where lenders engage in true risk sharing with USAID and will cover no more than 50 percent

of the lender’s risk of loss. For projects to be eligible,

they must have positive financial rates of return so that

the loans can be repaid. Loan amounts are in the range

of $2 million to $20 million, depending on the project.

The maximum loan amount is $100 million. These loans

and loan guarantees can have a substantial effect on water and wastewater investment projects, as evidenced by

the Aqua-Chem case study presented below.

Export-Import Bank of the United States (Ex-Im

Bank). The U.S. Export-Import Bank is an agency of the

U.S. government that provides export credit support either to U.S. exporters on a short-term basis or to foreign

purchasers on a longer term basis (2-10 years). Through

loan guarantees and insurance, the agency fosters exports

by making working capital available to U.S. exporters.

Alternatively, through similar mechanisms plus the extension of direct loans (and, on occasion, grants), the ExIm Bank provides credit at attractive interest rates to

foreign buyers to encourage their purchase of U.S. goods

and services. The Ex-Im Bank insures a wide variety

of U.S. environmental exports, giving priority to smallbusiness transactions and the expansion of the overseas

presence of the U.S. environmental goods and services

industry. The Ex-Im Bank does not compete with

commercial lenders, but assumes the risks they cannot

accept.

The Bank has designed a special Environmental Exports Program that will provide enhanced levels of support for a broad range of environmental exports. The

42. For more information, visit the Ex-Im Bank’s Web site at

www.exim.gov or contact the Ex-Im Bank’s Tied Aid Coordinator at

(202) 565-3814.

Case Study 3.6. Export-Import Bank Loan

Guarantee Supports Aqua-Chem’s Sale of

Desalination Equipment to the Caribbean

Aqua-Chem, Inc.’s Water Technologies Division manufactures boilers and seawater desalination equipment.

Headquartered in Milwaukee, Wisc., the division has

developed a worldwide reputation as a supplier of industrial water equipment. It currently employs 1,300

people in the United States.

Aqua-Chem sold a complete desalination system to

the Dutch colony of Aruba in 1998. This $8 million system provides 11.2 million gallons per day of desalted

water to the Caribbean island. Used for both industrial

applications and for potable water, the water generated

by the desalination plant has helped the island keep up

with the tourism-driven demand.

Aqua-Chem had provided desalination units to Aruba

in the past and the Water and Electricity Board was

pleased with its products. However, the utility had recently gone through a partial privatization and was particularly sensitive about capital costs. In order for the

utility to purchase the more expensive but higher quality Aqua-Chem units, the company had to structure a

particularly attractive financial package.

Aqua-Chem turned to the Export-Import Bank for assistance. The Ex-Im Bank facilitated the sale by providing a loan guarantee to the Water and Electricity Board

for this project. Ron Thimm, treasurer, stated that “without the Ex-Im Bank money, Aqua-Chem would very

likely have lost the job to a foreign competitor.”

Aqua-Chem used a banker to structure the financing

and to complete the Ex-Im Bank application. Mr. Thimm

highly recommends the use of a banker who understands

both Ex-Im Bank’s financial assistance tools and other

financing sources. He also stressed the importance of

educating sales staff about the financing solutions and

countries where Ex-Im funds are available.

For more information, contact Ron Thimm, treasurer,

(414) 577-2845 or visit the company’s Web site at

www.aqua-chem.com.
26 U.S. Department of Commerce, International Trade Administration

program demonstrates the Bank’s resolve to reach out to

small and large exporters of environmental products and

services. In 1997, the Environmental Exports Program

approved 47 transactions for a total export value of $1.9

billion.43 The major features of the program are:

 A short-term Environmental Export Insurance Policy

provides enhanced short-term multi-buyer and

single-buyer insurance coverage for small environmental exporters. The program features policies that

deliver 95 percent commercial risk coverage and 100

percent political risk (risk due to unexpected political events in the host country) coverage with no

deductible.

 Enhanced medium- and long-term support for

environmental projects, products, and services.

These enhancements, which are reflected in the ExIm Bank’s loan and guarantee programs, include:

local cost coverage equal to 15 percent of the U.S.

contract price, capitalization of interest during

construction, and maximum allowable repayment

terms permissible under OECD guidelines.

Overseas Private Investment Corporation (OPIC).

OPIC, a U.S. government agency, helps U.S. businesses

of all sizes invest and compete in 140 emerging markets

and developing nations worldwide. OPIC finances medium- to long-term investment projects through loan guarantees and direct loans. Direct loans are geared for small

businesses or cooperatives and usually range between

$2 million and $10 million. Loan guarantees range between $10 million and $200 million. OPIC protects U.S.

business activities in emerging markets through its Investment Insurance Programs against currency inconvertibility, expropriation (loss of investment due to

expropriation, nationalization, or confiscation by a foreign government), and political instability. The insurance

programs also can be used to cover expanding investments. OPIC also offers the Small Contractor’s Guarantee Program, which assists small business construction

and service contractors. However, OPIC does not provide export financing.

There are also several funds operating under the aegis

of OPIC that support U.S. environmental exports and investment overseas (see the section on commercial financing sources, below).

U.S. Small Business Administration (SBA). The SBA

has an Export Working Capital Program that guarantees

up to $750,000 of either short- or long-term loans to help

small businesses increase their export sales of products

or services. This program is designed to assist small businesses requiring capital to expand sales or manufacturing for international markets, as well as meet their

working capital needs. Loan proceeds may not be used

to establish operations overseas.

Commercial Financing Sources

Private Export Funding Corporation (PEFCO).

PEFCO is a consortium of private lenders which acts as

a supplemental lender to traditional export financing

sources. It works with the Ex-Im Bank by using private

capital to finance U.S. exports. PEFCO makes loans of

up to $225 million to public and private borrowers located outside of the United States who require mediumand/or long-term financing on purchases of U.S. goods

and services through traditional lenders or suppliers. In

all cases, the loans made by PEFCO must be covered by

the comprehensive guarantee of repayment of principal

and interest by the Ex-Im Bank. The loan requests must

come through a commercial bank.

Global Environment Fund Family of Funds. This

group of funds specializes in high-growth markets for

environmental technologies, products, and services. The

Global Environment Fund is a partnership that invests

up to $4 million per venture in public and private environmental companies around the world. Global Environment Finance Partners invests in advanced-stage private

firms for investments ranging from $500,000 to $2 million. The Global Environment Emerging Markets Funds

(GEEMF I and II) are capitalized by OPIC and focus on

environmental infrastructure in developing countries

where OPIC operates.

Allied Capital International Small Business Fund.

This is a $20 million equity fund that invests in OPICdesignated countries and is managed by the Allied Capital Corporation. Eligible companies are small U.S.

businesses seeking risk capital to expand overseas. The

preferred investment size is $2 million to $5 million. One

of the sectors targeted by the Fund is environmental

services.

Aqua International Partners Environmental Fund.

Aqua International Partners, a $232 million investment

fund, makes private equity investments in companies providing water and water-related products or services to

emerging market economies. Aqua invests in operating

and special purpose companies that are devoted to water

43. Financing Environmental Exports: A Guide to the Fundamentals

and Sources, U.S. Department of Commerce, International Trade

Administration, 1998.
Water and Wastewater Export Market Plan 27

and wastewater treatment operations (either being privatized or newly formed); manufacturing equipment or

products (pipes, pumps, meters, filters, etc.) for commercial, industrial, and residential water users; and other related activities or services.

U.S. Commercial Banks. U.S. commercial banks provide the bulk of trade and investment finance. In addition, various types of private and public infrastructure

funds can be used to support technology exports. The U.S.

Department of Commerce maintains a national clearinghouse of private and public financial institutions that offer trade finance. Also, the Office of Finance within the

Department of Commerce’s International Trade Administration has developed a Web-based export finance

matching service. This service is designed to match U.S.

exporters with sources of export financing or risk mitigation. The site also provides links to U.S. commercial

financing sources by state.

Local Commercial Banks. Local financial institutions

have an important role to play in financing small (under

$1 million) environmental investments, particularly in the

industrial sector. Credit is generally tight in developing

countries, making current conditions in local capital markets a significant factor in financing energy efficiency

investments. Chile is a positive example of a fairly welldeveloped local capital market, including a long-term

bond market. However, in most other developing countries, capital markets are immature, and U.S. firms often

find it too difficult and expensive to borrow money locally, unless local financial institutions act as intermediaries for external financing sources such as multilateral

development banks.

Self-Financing Mechanisms. Very few U.S. water and

wastewater companies have set up their own financing

arms to complement their technology exports. However,

the larger, total solution-oriented companies can often

successfully create their own entities for identifying funding sources and structuring debt and equity financing.

The case study below highlights the success of Lemna

International in setting up a financing arm.

Lemna International, Inc., of Minneapolis, Minn., is recognized worldwide as a supplier of innovative wastewater treatment systems. Lemna offers complete treatment

plant designs and equipment for municipal and industrial

applications globally, and has completed more than 100

facilities. About 60 of these are in the United States, with

the remainder located in developing countries, including

Turkey, Poland, and Slovakia. Lemna International’s sister company, Lemna Technologies, works with municipalities of fewer than 100,000 people. Lemna also

provides its technologies to industries, including food processing plants, dairies, wineries, packaging production

facilities, rendering plants, pig farms, and many others.

In Poland, Lemna has worked with more than 30 municipalities, from small rural communities to medium-sized

cities of 100,000 to 200,000 inhabitants.

When Lemna found that obtaining funds to build water and wastewater infrastructure was a major problem for

many of its clients, the company designed an innovative

strategy to help its clients secure needed project funds.

The Lemna Infrastructure Financing Enterprise (LIFE) was

set up to identify possible funding sources and help clients arrange appropriate financing terms. LIFE staff help

Lemna International’s clients determine which financing

structure will best meet their needs, and then assist them

in securing all or part of the funds. LIFE works with debt,

equity, and lease-back arrangements, and is experienced

in working with private and institutional investors, private lenders, and export credit agencies, including the U.S.

Export-Import Bank.

LIFE structured a $25 million loan package for the design and construction of a sewage system and wastewater

treatment plant for a Turkish municipality of 400,000

people. The loan package included funds from Ex-Im and

two international banks. The first phase of this project has

been constructed, and LIFE is beginning work on financing for Phase II, also for $25 million. LIFE is nearing

completion of a debt and equity package for a wastewater

treatment plant in China, to be built through a joint venture that includes Lemna International. The total financing for this project will be about $120 million. Other

current LIFE projects range in size from wastewater treatment projects in Poland valued at less than $6 million to a

$36 million water supply project in Romania and a $50

million water supply expansion project in sub-Saharan

Africa.

For more information, contact Poldi Gerard, vice president of marketing, at pgerard@lemna.com or (612) 253-

2000, or visit Lemna’s Web site at www.lemna.com.

Source: Primary interview with Poldi Gerald.

Case Study 3.7. Lemna: Finding Funds for International Clients
28 U.S. Department of Commerce, International Trade Administration

The countries that represent best prospects for U.S.

exporters of water and wastewater equipment and services are determined by a number of factors, including,

but not limited to, the:

 Overall size of the water and wastewater market in

the country;

 Openness of that market to imports (partly reflected

in the share of imports in the total market);

 Market’s growth rate; and

 Historic U.S. position in the market and the U.S.

import market share.

This chapter contains market profiles of 12 countries

that fit several of these criteria. The profiled countries

are Australia, Brazil, China, Egypt, India, Japan, South

Korea, Mexico, Saudi Arabia, Spain, Taiwan, and the

United Kingdom, representing a mix of developed and

developing countries.

Each of the country profiles provides general statistical data,44 a market overview, and discussions of the

regulatory and institutional framework for the water sector, the status of privatization of the water supply and

sewerage infrastructure, U.S. market share and competition, and market opportunities.

Brazil, China, India, Japan, South Korea, Mexico,

Spain, Taiwan, and the United Kingdom all have water

and wastewater markets that exceed $1 billion in size.

Such emerging markets as China, India, South Korea, Taiwan, Mexico, and Brazil have enormous potential due to

the extent of unmet water supply and sewerage needs.

These countries’ growth rates usually exceed 10 percent

per year. Japan, the United Kingdom, and Spain are mature markets with slower growth, but their sheer size and

favorable business climate make them worth exporters’

consideration. Australia is another mature market of

smaller size than Japan, the United Kingdom, and Spain,

but it is a market that favors U.S. firms. Egypt and Saudi

Arabia are niche markets for U.S. exporters. Egypt is an

exclusively donor-driven market, where U.S. foreign aid

gives a significant advantage to American companies.

Saudi Arabia is a highly specialized market with a focus

Chapter 4

Best Prospects in Water and Wastewater Treatment

45. Includes Hong Kong.

46. The numbers cover the desalination market only.

Table 4.1. Principal Water and Wastewater Market Characteristics in Selected Countries

Country Total Market Size Annual Growth Percent of Total U.S. Import Market

(millions of dollars) (percent) Market from Imports Share (percent)

Australia 603 (1999) 7 70 55

Brazil 1,700 (1998) n.a. 20 35

China2 5,336 (1999) 25-35 35 12

Egypt 856 (1998) 10 90 35

India 1,180 (2000) 15 40 25

Japan 6,000 (1996) 5-8 n.a. n.a.

S. Korea 3,400 (2000) n.a. 40 20

Mexico 2,390 (2000) 10 80 70

Saudi Arabia46 357 (1998) 5 85 16

Spain 4,000 (1998) n.a. n.a. n.a.

Taiwan 1,900 (1999) n.a. 75 28

United Kingdom 4,000 (2000) 4 55 25

n.a. = not available

Sources: Various—see references in individual country profiles.

44. Unless otherwise noted, the general statistical data were taken from

Global Water Supply and Sanitation Assessment 2000, World Health

Organization, 2000, with the exception of the GDP growth data that

were taken from World Development Report, World Bank, 2000.
Water and Wastewater Export Market Plan 29

on desalination technology, where the U.S. also has a

good strategic position.

Table 4.1 presents a summary of the estimates of the

principal market indicators for the profiled countries.

Table 4.2 presents data on the value of U.S. water and

wastewater technology exports to 32 countries. These

data represent exports of potable water treatment equipment, water and wastewater monitoring and analysis

equipment, and wastewater management equipment.47

The countries that are profiled here are indicated in gray.

47. These data were obtained by analyzing the appropriate 10-digit

HTS codes.

Table 4.2. U.S. Exports of Key Categories of Water and Wastewater Equipment, 1999 (thousands of U.S. dollars)

Rank Country Potable Water Treatment Monitoring and Analysis Wastewater Management Total

1 Mexico 173,533 2,399,198 1,710,963 4,283,694

2 Canada 68,955 2,789,464 1,014,083 3,872,502

3 Japan 232,961 1,023,557 143,317 1,399,835

4 United Kingdom 78,869 664,966 119,326 863,161

5 Germany 78,946 633,498 92,968 805,412

6 South Korea 178,534 384,983 68,827 632,344

7 Taiwan 174,857 354,546 62,139 591,542

8 Singapore 141,393 317,748 33,108 492,249

9 China (w/Hong Kong) 38,284 337,081 92,386 467,751

10 Netherlands 94,100 332,198 30,681 456,979

11 France 9,174 320,599 115,835 445,608

12 Italy 40,966 245,110 4,773 290,849

13 Belgium 735 119,342 51,064 171,141

14 Malaysia 40,968 107,197 12,800 160,965

15 Australia 4,919 87,109 48,568 140,596

16 Brazil 4,727 92,290 15,809 112,826

17 Israel 46,572 55,127 5,244 106,943

18 Philippines 54,655 32,289 1,478 88,422

19 Spain 805 49,336 24,674 74,815

20 Thailand 0 64,228 4,094 68,322

21 Aruba 58,662 0 0 58,662

22 Saudi Arabia 559 25,188 31,827 57,574

23 Russia 0 23,012 24,617 47,629

24 Ireland 0 29,074 11,689 40,763

25 Switzerland 0 33,913 3,353 37,266

26 Venezuela 9,609 14,475 12,593 36,677

27 United Arab Emirates 151 23,260 3,954 27,365

28 Sweden 0 24,382 786 25,168

29 India 0 14,879 6,888 21,767

30 Argentina 2,961 10,986 5,944 19,891

31 Dominican Republic 173 11,691 1,645 13,509

32 Egypt 1,057 930 9,360 11,347

33 Turkey 448 4,922 5,197 10,567

34 Colombia 2,267 2,215 5,133 9,615

35 Austria 5,149 1,997 0 7,146

Source: U.S. International Trade Commission, Harmonized Tariff Schedule.
30 U.S. Department of Commerce, International Trade Administration

Australia

Population: 19 million (2000)

Urban population: 84 percent (2000)

GNP per capita: $20,640 (1999)

GDP average annual growth rate: 3.8 percent (1990–1998)

Water supply coverage (urban/rural): 100 percent/

100 percent (2000)

Sanitation coverage (urban/rural): 100 percent/

100 percent (2000)

Market Overview

The sewerage systems in most of Australia’s major

cities are old and overloaded. Infiltration of rainwater and

overflows of sewage are frequent problems. Large investments are needed to increase sewer capacity and improve

their condition, as well as to improve the quality of treatment. In addition, municipalities are turning to the practice of recycling wastewater in order to alleviate the

pollution load of the country’s rivers and coastal waters.

Water supply problems in Australia are not as urgent as

wastewater ones, with nearly all the population connected

to centralized water supply, most of which is treated to

some degree, if only by disinfection.

Water and wastewater treatment are the largest segments of environmental business in Australia, representing 67 percent of the total environmental market. The

total market for water and wastewater equipment was

estimated at $603 million in 1999, with 70 percent of

the demand satisfied by imported equipment. Investment

in water supply infrastructure was roughly $232 million

in 1999, compared to $374 million for municipal wastewater treatment plants. The distribution of these investments by state and territory is shown in Table 4.3. The

market is growing at about 7 percent a year, due mainly

to the water and sewerage infrastructure rehabilitation and

expansion programs.48

The industrial wastewater treatment market is much

smaller but has been growing recently as the regulatory

requirements for pretreating industrial effluents become

more stringent. The Australian Water and Wastewater

Association estimates that the Australian industry

spends about $59 million per year for on-site effluent

pretreatment.49

Regulatory and Institutional Framework

Australia’s federal government has limited environmental responsibilities, with most functions administered

by states and territories. The Department of Primary Industries and Energy oversees water resource issues. The

National Environment Protection Council and the Environmental Protection Agency are responsible for coordinating environmental management programs at the

federal and state levels. The Council oversees the implementation of environmental regulations at the federal

level. However, pollution licenses are issued and enforced

by state authorities. In some states (for example,

Queensland), the licensing and enforcement have been

delegated to the local councils. States have recently

undertaken initiatives aimed at using guidelines and

codes of practice for certain polluting industries,

as part of the general trend away from a rigid commandand-control system toward industrial self-monitoring and

self-regulation.

State governments are responsible for water supply and

wastewater treatment in Australia, although day-to-day

operational management is carried out at the local level.

Privatization

Australian state governments are starting the process

of restructuring and reforming public utilities by setting

up state-owned corporations. The move is supposed to

promote greater efficiency through increased competition. To date, almost all Australian public water authorities have been incorporated, and most states are looking

toward eventual privatization, primarily due to the lack

of investment funds. Presently, although state-owned

utilities are still the main purchasers of wastewater treatment equipment, some of them have already been opened

48. The Water and Wastewater Market in Australia, Canada, Department of Foreign Affairs and International Trade (Ottawa, 1999).

49. Ibid.

Table 4.3. Investment in Water and Wastewater

Treatment Plants in Australia, 1999 (millions of

U.S. dollars)

State/Territory Investment Amount

New South Wales

Victoria

Queensland

South Australia

Western Australia

Tasmania

Australian Capital Territory

Northern Territory

Total

Source: The Water and Wastewater Market in Australia, Canada, Department of Foreign Affairs and International Trade (Ottawa, 1999).

203.4

155.5

93.5

56.2

67.8

10.6

18.5

0.7

606.2
Water and Wastewater Export Market Plan 31

to private participation via management contracts. New

sewage treatment plants are usually privatized under

BOO contracts.

Trade and Investment Policy

No trade restrictions or other non-tariff barriers exist

for imported water and wastewater equipment. The general import tariff rate varies from 0 to 5 percent, depending on whether or not local manufacturers exist for the

same product. Certain state-of-the-art capital equipment

may be imported duty free for specific projects.

There are no tight controls that govern imported water and wastewater equipment. Each technology or type

of equipment is evaluated on its own merits. Details of

applicable state-level technology requirements may be

obtained from the environmental departments or relevant

industry associations.

U.S. Market Share and Competition

Australia has developed world-class expertise in some

areas of wastewater treatment, and a number of local environmental firms sell competitive sewage treatment process equipment. The majority of pipes and fittings are

also manufactured locally. The industry is dominated by

small and medium-sized companies with sales less than

$1 million. The principal Australian manufacturers in this

market include Acron Noble Pty. Ltd. (biological wastewater treatment systems), Australian Ultraviolet Services

(ultraviolet disinfection equipment), Sepa Wastewater

Treatment (turnkey treatment plants), Tubemakers of

Australia (pipes and fittings), Warman International Ltd.

(pumps), etc.

Domestic sales, however, have historically been hampered by the unwillingness of the water utilities to trust

the local industry or to support local innovations. In addition, the local industry sometimes lacks investment

capital to fund research and development projects and to

commercialize their products.

The United States dominates the import market for

wastewater treatment equipment with a 55 percent market share, followed by Germany, Britain, and Japan (see

Figure 4.1). Wastewater equipment is also imported from

France, Sweden, and Italy. The major overseas players

include French companies ONDEO and Vivendi and the

British company Thames Water. ONDEO is basing its

Asia/Pacific wastewater research program in Sydney, creating a great potential for future exports. The success of

these firms can be partly attributed to Australia’s historical choice of European over U.S.-designed sewerage systems. Another obstacle for U.S. suppliers is their

reluctance to meet Australian quality assurance standards.

Many large wastewater treatment BOO projects have

been awarded recently to French and British companies

in consortia with Australian firms. A consortium led by

Vivendi that includes Thames Water has recently won a

$1 billion 15-year operations and management contract

for Adelaide’s water and wastewater utility. U.S. companies have been largely absent from these projects.

Nonetheless, U.S. water and wastewater equipment suppliers still have opportunities to sell to local companies

bidding on such concessions.

Market Opportunities

The biggest opportunities exist in wastewater treatment

systems. Some of the major projects currently underway

include:

 Upgrade of the Woodman Point wastewater treatment plant in Western Australia ($79 million)

 Expansion of the Perth sewerage network, Western

Australia ($174 million)

 Construction of a sewerage tunnel and a sludge

handling plant in Camellia, New South Wales ($178

million)

 The Hunter Sewerage Project, New South Wales

($205 million)

 Upgrade of the wastewater treatment plant at

Cronulla, New South Wales ($60 million)

Figure 4.1. Import Market Shares for Wastewater

Treatment Equipment in Australia

Source: U.S. and Foreign Commercial Service and U.S. Department

of State, Industry Sector Analysis; Australia: Wastewater Treatment

Equipment (Washington, D.C.: 1998).

United States

55%

Other Countries

15%

Germany

15%

United Kingdom

10%

Japan

5%
32 U.S. Department of Commerce, International Trade Administration

 Expansion of the Picton sewerage network, New

South Wales ($36 million)

 The Northwestern Sewerage Project, Victoria ($152

million)

 Upgrade of the Bolivar wastewater treatment plant,

South Australia ($66 million)

The largest water supply infrastructure projects are the

upgrade of 30 inland water treatment plants in New South

Wales ($180 million), 10 water treatment plants in South

Australia ($54 million), and the Gladstone water supply

expansion project in Queensland ($114 million).

Best sales prospects include biofiltration systems,

sludge presses and stabilizers, oxidation systems for industrial wastewater treatment, filtration equipment, and

membrane technologies for water recycling. Given the

strength of local manufacturers, fewer opportunities exist for pumping equipment.

Some industrial wastewater treatment opportunities

exist at gold and copper mines, wool scour mills, steel

mills, pulp and paper mills, breweries, petrochemical

plants, chemical and pharmaceutical plants, abattoirs, and

food processing facilities.

Brazil

Population: 170 million (2000)

Urban population: 81 percent (2000)

GNP per capita: $4,420 (1999)

GDP average annual growth rate: 3.2 percent (1990–1998)

Water supply coverage (urban/rural): 95 percent/

45 percent (2000)

Sanitation coverage (urban/rural): 85 percent/

45 percent (2000)

Market Overview

Brazil’s water supply and sanitation sector is experiencing a wide range of technical, operational, financial,

and other problems. The water supply network is expanding slowly and cannot cope with the rapid population

growth. Up to 50 percent of water loss occurs in the distribution system. Municipal wastewater treatment has

historically received even less investment than water supply. Only 20 percent of the wastewater collected is treated.

Large quantities of untreated sewage are discharged into

open waters, resulting in a serious public health hazard,

particularly in such states as São Paulo, Minas Gerais,

and Rio de Janeiro. There are also stark differences in

the extent and quality of water supply and sanitation services between the richer south and southeast regions of

the country (about 60 percent sewerage coverage) and

the poorer north and northeast (less than 5 percent

coverage).50

In metropolitan centers such as Rio de Janeiro and São

Paulo, industrial effluents represent around 30 percent

of the organic load in the total wastewater discharges.

About 20 percent of the industrial facilities are responsible for almost 80 percent of the industrial effluent load.

Almost all the large polluters have signed agreements

with regulatory agencies that defined their compliance

plans.

Investment needs are estimated at $33 billion through

2010 to overcome existing gaps in water supply and sewerage coverage, as well as to respond to the growing demand for these services.51 The water and wastewater

technologies market was estimated at $1.7 billion in

1998.52 The demand for consulting services will likely

be around $100 million per year through 2004.53

Regulatory and Institutional Framework

The 1997 Water Law introduced the river basin management approach in Brazil, with multi-stakeholder water basin committees being responsible for long-term

water resources planning and charging water use and

wastewater discharge fees (established in a 2000 regulation). The federal agency responsible for the regulation

and overall supervision of the water resources sector is

the Division of Sanitation of the Secretariat of Urban

Policy of the Ministry of Planning and Budget. The policy

stipulates that water supply and sanitation services can

be provided by state-wide water and wastewater companies (under current concessions), municipal public utilities, or private companies. In 2000, a new law created

the National Water Agency, which will coordinate the

national water policy and the privatization of state-owned

water companies.

The 1990 National Environmental Policy Act defined

water quality standards and a national discharge permit

system that are based on nine water use categories (for

example, domestic consumption, recreation, irrigation,

etc.). The permit system is administered by the National

Environmental Council. States have the authority to make

their regulations more stringent than the federal standards.

For example, the environmental agencies in the states of

Rio de Janeiro and São Paulo have adopted effluent stan50. “Brazil: Water and Wastewater Concession Opportunities,” Industry Sector Analysis, U.S. and Foreign Commercial Service and

U.S. Department of State, 1998.

51. Ibid.

52. Brazil Environmental Technologies Market, Latin America Business Development Mission, U.S. Department of Commerce, 2000.

53. Brazilian Wastewater Industry Forecast 2000, InfoAmericas

(http://infoamericas.com).
Water and Wastewater Export Market Plan 33

dards that require secondary treatment of wastewater discharges. Recent regulations require effluent self-monitoring and reporting from municipal sewage treatment

plants and several types of industry. The 1998 Environmental Law contributed significantly to the improvement

of environmental enforcement in the country by raising

sanctions for environmental violations.

Privatization

In the 1990s, privatization of state-owned enterprises

began to be recognized as a tool for economic change,

as the government strove to reduce subsidies to unprofitable companies. Public service monopolies started to

open up to competition and impartial regulation. Ambitious privatization programs have been undertaken in the

telecommunications, power, and, to a lesser extent, water and sanitation sectors.

According to the Law on Concessions, the authority

to issue water and wastewater concessions rests at the

municipal level. However, the state authorities continue

to oversee regional distribution networks and utilities that

service more than one municipality. In fact, state governments are better positioned than municipalities to design concessions and provide financing guarantees for

projects.

Resources are available through the Brazilian Economic Development Bank to finance privatization studies and projects, both at the state and municipal levels.

The Bank is more inclined to support post-privatization

investments by operators than finance the privatization

process itself.

The private sector participation models currently used

in Brazil’s water sector include service contracts (most

commonly used), full concessions (used mostly in smaller

cities), BOT schemes (in the states of São Paulo and

Minas Gerais), and joint ownership arrangements (so far,

the only example of this scheme is the Parana State Water Company).

The majority of private participation projects (16) are

taking place in the state of São Paulo, most under the

BOT scheme, with six of them involving investments of

over $10 million. The largest project in the state is the

$124 million concession that has been granted to Aguas

de Limeira, a joint venture between the French conglomerate ONDEO and Compahnia Brasiliera de Projectos e

Obras, a Brazilian civil construction firm. The state of

Rio de Janeiro uses only the full concession model, and

the four largest mixed water/wastewater concessions in

the state are worth almost $400 million in investments.54

Another breakthrough for the private sector occurred in

1998, when Vivendi acquired 30 percent of the shares of

Sanepar, which serves seven million people in the state

of Parana.

At the same time, water utility privatization faces opposition from some political groups and unions. For example, the privatization of CEDAE (the Rio de Janeiro

state public company), the second-largest water company

in Brazil, has been canceled due to political controversy

and legal actions.

Trade and Investment Policy

Brazil is a member of Mercosur—a regional free trade

agreement that also includes Argentina, Paraguay, and

Uruguay. However, Brazil’s industry remains protected

from imports from non-Mercosur countries. Tariffs for

environmental equipment are still high (even though they

have dropped dramatically over the last decade) and average 19 percent.

Despite the fact that Brazil must comply with World

Trade Organization (WTO) regulations requiring equal

treatment of foreign and domestic companies, there is a

non-official “buy Brazilian” policy for government procurement. Foreign companies that have production facilities in Brazil are usually chosen over those that have

not committed to investment in the country. Brazilian law

requires foreign bidders to be associated with a local firm.

U.S. Market Share and Competition

Over 80 percent of the water supply and sanitation

equipment in Brazil is produced by Brazilian manufacturers, although roughly half of them are engaged in some

form of technology agreement with foreign partners. For

instance, the market for pipes and fittings is dominated

by the French company Pont-à-Mousson, which operates

under the name Barbara in Brazil.55 Filsan and its subsidiaries, Enfil and Aquamec, are other examples of Brazilian water and wastewater equipment suppliers having

a significant market share. These companies have operated for over 30 years and have established solid relationships with most municipal and state clients.

Partnering with a Brazilian company is almost imperative for foreign exporters in this market.

U.S. exports represent about 35 percent of the import

market for municipal water supply and wastewater treatment equipment, followed by France, Germany, and

Sweden. In the industrial wastewater treatment market

segment, the U.S. holds a 60 percent import market share,

followed by France and Japan (see Figure 4.2). The best

54. “Brazil: Water and Wastewater Concession Opportunities,” Industry Sector Analysis, U.S. and Foreign Commercial Service and

U.S. Department of State, 1998. 55. Ibid.
34 U.S. Department of Commerce, International Trade Administration

established European water companies in Brazil are the

French groups Vivendi and ONDEO, Britain’s Thames

Water, and Aguas de Portugal.

Market Opportunities

All around Brazil, significant potential opportunities

abound for investors and suppliers of water and wastewater equipment and services to participate in the

privatization program. A strong market growth can be

expected for BOT projects in the construction and operation of wastewater treatment plants, particularly in

cities with over 100,000 inhabitants.

About 80 percent of the funds allocated for improvements of water and wastewater systems in low-income

areas is distributed through Brazil’s Social Action and

Sanitation Program. Between 1995 and 1998, the program spent $440 million on water supply improvements

and $930 million on wastewater treatment projects.

Other opportunities come from large projects implemented with support from multilateral development

banks, including the IDB’s Tiete River Cleanup Project

($400 million), the Federal District Basic Sanitation Program ($260 million), the Guaiba Watershed Environmental Management Program ($221 million), as well as the

World Bank’s Bahia Water Resources Management

project ($51 million), and São Paulo Water Quality and

Pollution Control Program ($245 million).

Private industry, particularly textile, petrochemical,

and pulp and paper industries, pressured by stricter environmental laws, will also invest more in effluent treatment equipment.

Wastewater treatment accounted for 41 percent of investments in this sector in 2000, water infrastructure improvements for 38 percent, sewerage system upgrades

for 15 percent, and engineering and consulting services

for 6 percent.56 Table 4.4 presents projected opportunities for sales of different types of wastewater equipment.

Despite the strength of local manufacturers of pipes,

valves, pumps, and septic tanks, there are still technology gaps in Brazil’s water and wastewater market that

need to be filled by imports. These include hydrometers,

leak detection equipment, and wastewater treatment

equipment and chemicals, as well as automation

software.

People’s Republic of China

Population: 1.278 billion (2000)

Urban population: 32 percent (2000)

GNP per capita: $780 (1999)

GDP average annual growth rate: 11.2 percent

(1990–1998)

Water supply coverage (urban/rural): 94 percent/

66 percent (2000)

Sanitation coverage (urban/rural): 68 percent/

24 percent (2000)

This market profile covers both mainland China and

Hong Kong. On July 1, 1997, Hong Kong reverted to

Source: Canada, Department of Foreign Affairs and International

Trade, The Water and Wastewater Market in Brazil (Ottawa, 1999).

Figure 4.2. Import Market Shares for Industrial

Wastewater Treatment Equipment in Brazil

United States

60%

France

25%

Japan

10%

Other Countries

5%

Table 4.4. Brazilian Wastewater Equipment Demand

Forecast, 2001–2004 (millions of U.S. dollars)

Equipment Type 2001 2002 2003 2004

Wastewater

treatment

equipment 200 270 350 450

Pipes 450 500 520 550

Hydrometers 98 123 131 135

Pipe cleaning

equipment 15 17 21 23

Valves 15 20 26 33

Pumps 45 52 58 67

Other 32 38 44 52

Total 855 1,020 1,050 1,310

Source: Brazilian Wastewater Industry Forecast 2000, InfoAmericas

(http://infoamericas.com).

56. The Water and Wastewater Market in Brazil, Canada, Department of Foreign Affairs and International Trade, 1999.
Water and Wastewater Export Market Plan 35

Chinese sovereignty under the concept of “one country,

two systems” and, as a Special Administrative Region, is

run with a high degree of autonomy.

Market Overview

Water supply and wastewater treatment are presently

top priorities of China’s environmental protection and

infrastructure development policies. Water shortages,

caused by uneven distribution, inefficient use, and contamination of water resources, affect approximately 400

cities in China. Thirty cities, including Beijing, are expected to face long-term water shortages.

Ambient water quality has deteriorated dramatically

due to the phenomenal growth in industrial development

over the last two decades, lack of enforcement of environmental standards, poor treatment of industrial effluents, and inadequate investments in infrastructure.

Presently, in urban areas, less than 20 percent of wastewater is treated, and close to 90 percent of urban drinking water sources are polluted to some degree.57 China

has committed to continue its efforts to improve water

supply and sanitation. The government has set a target

of a 40 percent treatment rate for sewage by 2010. This

will require approximately $24 to $36 billion, excluding

operating costs.58

In Hong Kong, water pollution from sewage and industrial wastewater discharges is the most visible environmental concern. Roughly 10 percent of wastewater

receives biological treatment before discharge, 40 percent receives partial treatment, and the remaining 50 percent is discharged into the sea without any treatment.59

Under China’s Ninth Five-Year Plan (1996–2000), the

clean-up of three lakes (Tai, Chao, and Dianchi) and three

rivers (Huai, Hai, and Liao) were top priorities of the

state economic development policy. The clean-up effort

achieved some positive results. However, the construction of 131 new municipal wastewater treatment plants

has yet to begin, and 535 industrial plants have to install

effluent treatment systems.60

China’s water and wastewater technologies market is

enormous—over $5.3 billion in 1999. Even though most

of the market demand is covered by local production, the

import market alone amounts, according to the U.S. Commercial Service, to almost $2 billion a year.

The size of the market for water and wastewater technologies is enormous and the scope of the country’s water and wastewater projects is gargantuan. For example,

the Chinese government has committed to a plan to transfer water to the parched north from the wet southern regions. In 2001, the PRC government has committed to a

schedule to make this South-North Water Transfer project

a reality. Three transfer channels will be constructed, the

first two in the east and in the center. The eastern route

will be completed by 2010 with a total cost of $7.25 billion. Phase I of the construction of the central route will

be completed by 2010. The total cost of this effort will

be approximately $10 billion. The western route is still

in the early planning phases.The government has stressed

that this project is to be linked with enhanced efforts to

increase water use efficiency, prevent pollution, and

charge appropriate water prices.61

Regulatory and Institutional Framework

China’s State Environmental Protection Agency is responsible for drafting and interpreting national environmental laws and regulations. As part of the 1998

government reorganization, the agency was upgraded to

full ministerial rank. Responsibility for enforcement rests

with provincial and local Environmental Protection Bureaus. Responsibility for water management in China is

divided among several ministries, including the Ministry of Water Resources and the Ministry of Construction.

Water and wastewater utilities are run by municipalities

under the direction of provincial and municipal Planning

Commissions.

China is implementing a national “one control, two

standards” policy, which requires provinces to set limits

57. The Environmental Industries Market in China, Canada, Department of Foreign Affairs and International Trade, 2001.

58. China Environmental Technologies Export Market Plan, U.S. Department of Commerce, International Trade Administration, 2002.

59. The Environmental Industries Market in Hong Kong, Canada,

Department of Foreign Affairs and International Trade, 2001.

60. The Environmental Industries Market in China, Canada, Department of Foreign Affairs and International Trade, 2001.

Table 4.5. Estimated Size of the Water and Wastewater

Technologies Market in China, 1999 (millions of U.S.

dollars)

Total Growth Rate,

Local Market 2000–2001

Production Imports Size (percent)

Water treatment

and supply 1,506 646 2,152 35%

Wastewater

treatment 1,911 1,273 3,184 25%

Total 3,417 1,919 5,336

Sources: China: “Water Treatment and Supply” and “China: Wastewater Treatment Technologies,” Industry Sector Analyses, U.S. and

Foreign Commercial Service and U.S. Department of State, 1998.

61. Issues Surrounding China’s South-North Water Transfer Project,

U.S. Embassy, Beijing, April 2001.
36 U.S. Department of Commerce, International Trade Administration

on the volume of discharges and meet industrial effluent

standards.

In general, the responsibility and power of local authorities seems to be increasing. Key cities are required

to meet water quality standards. The 1984 Clean Water

Law was amended in 1996, requiring all cities with populations over 250,000 to build municipal wastewater treatment plants. The amendments also required industries

to pay a “pollution discharge fee” for their effluents.

Although the environmental regulatory framework is

comprehensive, enforcement remains a problem because

laws established by the central agency are supposed to

be enforced by local governments, which are often reluctant, for political, economic, and social reasons, to

penalize industries within their jurisdiction. There is evidence, however, that this is changing. For example, late

last year in the Huai River area, over 1,000 businesses

were forced to close for noncompliance.

In 1997, the State Development and Planning Commission approved policies concerning water conservation. The policies defined the functions of the central and

local governments in water resource management. Investment from the central government is earmarked for construction of large-scale, inter-provincial infrastructure

projects. Inter-basin and local projects should be financed

through local budgets and commercial channels.

One of the largest constraints to the development of

the Chinese water and wastewater market is the lack of

market pricing for water. High government subsidies for

water have meant that water is supplied to consumers at

a loss, resulting in a lack of return on investments in water projects for both local and foreign investors. In 1998,

China’s State Council required a three-year timetable for

water price market reform. As a result, the price of water for agricultural use will likely triple in the near future. Urban and industrial users will also face increases.

Between 1996 and 1998 alone, the residential water rate

in Beijing doubled to 1 RMB per ton. However, it is estimated that the true cost of water is actually 5 RMB per

ton.62

The State Development and Planning Commission

addressed wastewater treatment pricing in its 1999 Notice on Increasing Wastewater Fees and Establishing an

Urban Wastewater Treatment System. This rule states that

wastewater treatment fees shall be based on operation

and maintenance costs of wastewater treatment plants.

Urban public utility bureaus will be responsible for collection. Prices have been increased subsequently.63

Privatization

Growth rates in different industrial sectors continue

to shift the composition of the economy from the public

to the private sector. The government has made serious

efforts to downsize the large state sector and many stateowned enterprises have been sold or closed. However,

the current policy of administrative price controls is at

odds with the goal of achieving greater economic efficiency through market-oriented reforms. Recent contracts

in water supply indicate that there are opportunities in

BOT schemes (see the section on market opportunities).

However, foreign exchange guarantees are not readily

available and operators often bear all foreign currency

risks. The State Development and Planning Commission

stipulated that “the government will not provide a direct

guarantee for the project return rate. Neither China’s stateowned financial nor non-financial institutions are allowed

to provide direct guarantee to the project contractor.” In

1998, the People’s Bank of China further tightened control over the guarantee issue in response to the Asian financial crisis.64

The Hong Kong government is looking to privatize

water treatment operations over the next five years. A

feasibility study is currently underway to assess the different privatization models and evaluate which would be

best suited for Hong Kong’s market conditions.

Trade and Investment Policy

China is currently negotiating entry into the WTO,

which would recognize its role as a major trading nation. Membership would require China to revise and reduce most of its trade barriers. Presently, import tariff

rates are divided into two categories: the general tariff

and the minimum or Most Favored Nation tariff. Imports

from the U.S. are assessed at the minimum tariff rate due

to an agreement between the two countries that contains

reciprocal preferential tariff clauses. There is a 14 to 30

percent duty on imports of environmental products, with

the highest duties imposed on water filtering and purifying machinery.65 Five Special Economic Zones (Dalian,

Tianjin, Shanghai, Guanzhou, and Hainan), open cities,

and foreign trade zones offer preferential duty reduction

or exemption.

A common problem faced by many U.S. firms that

have entered the Chinese market is the inconsistent ap62. “Beijing Residential Water Rate is 1 RMB per Ton,” Beijing

Wanbao (September 10, 1998), 1.

63. China Environmental Export Market Plan, U.S. Department of

Commerce, International Trade Administration, 2002.

64. “China: Water Treatment and Supply,” International Market Insight, U.S. and Foreign Commercial Service and U.S. Department of

State, 1999.

65. “China: Wastewater Treatment in Guangdong,” Industry Sector

Analysis, U.S. and Foreign Commercial Service and U.S. Department

of State, 2000.
Water and Wastewater Export Market Plan 37

plication of import regulations. In customs procedures,

it is not uncommon for the same product to be subject to

different levies in different ports, as they each add to the

basic import tariff the local jurisdiction’s own administrative and miscellaneous fees. This creates uncertainty

in the calculation of export costs and impedes the establishment of consistent, long-term commercial ties.

China also administers a complex system of non-tariff trade barriers that include import licensing, quotas,

and administration controls such as import registration.

The United States is putting considerable pressure on

China to reduce tariffs, phase out non-tariff import restrictions, publicize all trade-related regulations, and

grant unconditional national treatment to foreign investors as a prerequisite of its accession to the WTO.

China has opened a number of sensitive sectors to investment on an experimental and limited basis and has

introduced new incentives for foreign investors designed

to modernize Chinese industry. Most of the investment

has been in the coastal regions of the five Special Economic Zones and now in the western portions of the

country.

The government continues to pursue reforms in foreign exchange controls, taxation, foreign trade, and state

enterprise restructuring that affect the foreign investment

climate. In 1996, China announced full convertibility of

its currency on the current account and instituted new,

more liberal regulations allowing both domestic enterprises and those backed by foreign investment to freely

convert currencies for current account transactions.

However, China’s restrictive foreign trade and investment regulations deny foreign companies national treatment in almost all industry and service sectors. There is

also a general lack of transparency and inconsistent enforcement with regard to China’s legal and regulatory

system, which leads to ambiguities and excessive bureaucratic influence. Although it is at the discretion of procuring government agencies to determine their own

suppliers and forms of procurement, a number of project

types must first get approval from the central government. These include public construction projects exceeding $9 million (which would include all water and

wastewater infrastructure projects), and foreign enterprises or joint ventures that exceed $45 million. This approval process may take a long time.

In general, Chinese government procurement is highly

centralized and is not known for being transparent. The

U.S. State Department has noted that China’s procurement practices “have often not been consistent with open

and competitive bidding and, for the most part, non-transparent. . . . All information, from solicitation to award,

remains secret and is known only to companies involved

or to officials in the planning and industrial ministries.”66

Tenders for projects funded by international organizations

are usually openly announced, whereas most Chinese

“government procurement is by invitation only.” This

scheme is supposed to change under new regulations issued by the Chinese State Development Planning Commission in 1999.

Foreign companies are currently not allowed to engage directly in distributing imported goods in mainland

China, although this will change once China joins the

WTO. Presently, foreign suppliers must either distribute

their products through a Chinese agent, form a joint venture with a Chinese firm, or manufacture the goods locally. Each region has its individual distribution

requirements, so hiring multiple agents is essential.

Hong Kong is a free port and does not impose any

customs tariff on imports, has no tariff quota or surcharge,

and no value-added or general services taxes. Public sector procurement in Hong Kong complies with the WTO’s

Agreement on Government Procurement.

U.S. Market Share and Competition

There are currently about 32,000 water equipment

manufacturing companies in China and that number is

increasing. Although most of these companies produce

low-quality, unsophisticated technologies, domestic production should not be underestimated. Domestic suppliers now handle approximately two-thirds of the market.

One of the largest environmental firms in Beijing currently supplies 50 percent of the wastewater market in

the city, while its branch office in Shenzhen covers 90

percent of the market there.67 Domestic production will

continue to increase for a number of reasons. One of them

is China’s desire to become self-sufficient in the area of

environmental technologies. Another is that small enterprises are moving into the market because of the opportunities presented by increased government funding.

In 1997, the U.S. had the third-largest import share in

both the water supply and wastewater treatment markets

(at 11 percent and 12 percent, respectively), after Japan

and Germany (see Figure 4.3). The U.S. wastewater technology industry already has a strong presence in the filter technology market, supplying over 60 percent of

66. FY 2001 Country Commercial Guide: China, U.S. Department of

State and U.S. and Foreign Commercial Service (prepared by the U.S.

Embassy, Beijing), July 2000.

67. “China: Wastewater Treatment Technologies,” Industry Sector

Analysis, U.S. and Foreign Commercial Service and U.S. Department

of State, 1998.
38 U.S. Department of Commerce, International Trade Administration

wastewater filters in China.68 However, it is critical to

remember that competition is fierce.

Cost is the primary inhibitor for importing U.S. water

and wastewater technology into China. While U.S. technologies are acknowledged to be of superb quality, Chinese buyers are often more concerned with financing and

price. Grants from foreign governments strongly affect

Chinese end users’ purchasing decisions. Japan and many

European governments often provide low-interest soft

loans with extended repayment terms to help finance their

countries’ technology exports, giving them a major advantage over U.S. firms.

U.S. competitors are very active in China’s emerging

BOT market. The 18-year concession in Chengdu

(Sichuan Province) was awarded in 1998 to the consortium of Vivendi (France) and Marubeni Company (Japan).69 In 1997, ONDEO was awarded a 30-year BOT

contract for a 450,000 m3

/day drinking water treatment

plant in Shenyang, the capital of Liaoning Province.

ONDEO also got a similar contract for a 500,000 m3

/

day drinking water treatment plant in Guangzhou

(Guangdong Province), and smaller contracts in Gaozhou

(Guangdong Province) and Nachang (Jiangxi Province).

Another BOT concession (for 22.5 years) was awarded

to a consortium of British companies, Bovis Construction Group and Thames Water, to build a $73 million

water treatment plant in a district of Shanghai.70

The first joint project between a U.S. company and a

Chinese partner for the development of a municipal

wastewater treatment plant was signed in 1999 between

Lemna International and the Guangzhou Tunnel Development Authority. The project is estimated at $120 million. U.S. firms will supply $18 million worth of

equipment exports and $2 million worth of environmental services. As the Guangzhou Municipality is looking

to undertake 10 similar projects over the next few years,

the signing of a U.S. firm for the first project creates a

good precedent for other U.S. companies.

The notion of guanxi (relationships) is very important

to any kind of venture in China. U.S. companies must be

willing to develop close relationships with their Chinese

partners, as well as local governments. Good personal

relationships are often the most critical success factor.

Market Opportunities

Responding to the country’s serious water resource

problems, the World Bank and the Asian Development

Bank have dramatically increased their funding in China

on water infrastructure projects, creating significant com68. “China: Wastewater Treatment in Guangdong,” Industry Sector

Analysis, U.S. and Foreign Commercial Service and U.S. Department

of State, 2000.

69. Ibid.

Source: Canada, Department of Foreign Affairs and International Trade, The Environmental Market in China (Ottawa, 2001).

Japan

28%

South

Korea

17%

Taiwan

7%

United States

11%

Other

Countries

18%

Germany

15%

France

7%

Italy 7%

Japan

40%

Germany

30%

United States

12%

Other Countries

18%

Figure 4.3. Import Market Shares for Water and Wastewater Technologies in China

Water Supply Wastewater Treatment

70. “Global Environmental Markets 2000.” Environmental Business

Journal, vol. XII, no. 9/10, 2000.
Water and Wastewater Export Market Plan 39

mercial opportunities for U.S. firms.71 In the past, projects

funded by multilateral development banks presented opportunities for foreign companies in Eastern China. As

the Chinese government has shifted its focus to promoting development of the western provinces, so have the

World Bank and the Asian Development Bank. An estimated $1.26 billion worth of water supply and wastewater management projects are currently underway or in

preparation. (As noted above, large projects funded by

international organizations are often more transparent

than those funded solely by the Chinese government.)

The following are just some of the water and wastewater projects in China funded through World Bank or

Asian Development Bank loans (see Appendix A for more

details on these and other ongoing and forthcoming multilateral development bank projects):

 Beijing Environmental Protection Project (World

Bank). Among the goals of the second phase of this

project is to improve the city’s sewage collection and

treatment system.

 Shandong Environment Project (World Bank).

The project focuses on wastewater management and

efficient use of water resources in the city of Jinan,

Shandong province.

 Hubei Urban Environmental Project (World

Bank). The goal of this $223 million project is to

improve water quality in the urban areas of the midYangtze River basin by constructing interseptor

sewer systems and wastewater treatment facilities.

 Chongqing Industrial Reform and Pollution

Control Program (World Bank). This long-term

program for water resource management includes

construction of wastewater treatment plants as well

as upgrading water supply and distribution systems.

 Liao River Basin Project (World Bank). The

investment component of this river basin pollution

cleanup project is expected to include water supply

and wastewater management.

 Huai River Basin Pollution Control Project

(World Bank). The project will help local governments in the Anhui and Shandong provinces develop

and finance municipal pollution control investments.

 Tianjin Wastewater Treatment and Water Resource Protection Project (Asian Development

Bank). The $300 million project includes the construction of Beicang wastewater treatment facilities

and implementation of a water resource protection

scheme for the Luan-Tianjin diversion system.

 Suzhou Creek Rehabilitation Program (Asian

Development Bank). The $445 million effort includes improving sewage treatment systems, treating

contaminated sediments, and introducing water

resource management and quality control methods.

 Hai and Luan Wastewater Program (Asian

Development Bank). The objective of this $900

million program is to improve water quality in one

of three river basins on the Chinese government’s

priority list.

Public authorities continue to be the main end-users

of water and wastewater technologies and services in

China. As domestic Chinese firms are strong in smallscale wastewater treatment technology projects, the best

market for U.S. water and wastewater treatment equipment is in large and medium-sized municipal facilities.

The greatest demand is for low-cost but highly efficient

systems, including aerators, pumps, valves, sludge scrapers and mixers, disinfecting equipment and chemical

agent production equipment, water quality monitoring

and automatic control systems, dewatering machines, and

various kinds of pipes.

In the industrial wastewater treatment market, the best

opportunities exist in the pharmaceutical, food processing, fish farming, paper, textile, paint, chemical, and fertilizer industries. These industry sectors are the main

targets of the “three lakes, three rivers” government program. There are also opportunities with large multinational companies working in China, many of which are

complying with higher, worldwide corporate environmental standards.

In addition, there is an expanding market for smaller

water and wastewater facilities in rural areas. For example, Phase II of the Chongqing Urban Environmental

Management Project includes an emphasis on provision

of infrastructure to rural communities.

Some of the better equipment sales prospects in China

are water monitoring instruments, drinking water purification systems, industrial wastewater treatment equipment, and resource recovery technologies.72

The Hong Kong government has designed a Strategic

Sewage Disposal Scheme, an ambitious plan to link major urban developments around Victoria Harbor to new

sewage treatment facilities. The various options for ultimate disposal of sewage from the metropolitan area are

71. However, loans are capable of supplying a mere 15 percent of the

funding requirements, making the lack of hard currency financing an

important constraint to accessing China’s water and wastewater

market.

72. FY 2001 Country Commercial Guide: China, U.S. Department of

State and U.S. and Foreign Commercial Service (prepared by the U.S.

Embassy, Beijing), July 2000.
40 U.S. Department of Commerce, International Trade Administration

currently being reviewed. The project’s total cost is estimated at $5.2 billion.73

While Hong Kong by itself represents a strong market for wastewater equipment, it is also a gateway to the

enormous mainland China market. Hong Kong remains

China’s largest port and the entry point for most of

China’s imports, particularly goods exported by small and

medium-sized enterprises.

U.S. water and wastewater equipment and technology

are seen as being high quality and cutting edge. However, it is also often more expensive than competitors’

equipment and technology. The best sales prospects are

in the areas of water monitoring equipment, home water

filtration systems, and turnkey solutions to large-scale

water treatment problems.

Egypt

Population: 68 million (2000)

Urban population: 45 percent (2000)

GNP per capita: $1,400 (1999)

GDP average annual growth rate: 4.2 percent (1990-1998)

Water supply coverage (urban/rural): 96 percent/

94 percent (2000)

Sanitation coverage (urban/rural): 98 percent/

91 percent (2000)

Market Overview

The Nile is the source for more than 95 percent of

Egypt’s water, supplying a large population, a burgeoning industrial base, and over seven million acres of highly

productive irrigated lands. The Nile is also the ultimate

recipient of Egypt’s wastewater. A rapidly expanding

population and the disposal of untreated wastes are putting increased demands on the country’s water supply.

Only large cities such as Cairo and Alexandria provide treated drinking water to all of their residents. Existing surface water filtration plants use conventional

water treatment plant processes consisting of pre-chlorination, aluminum sulfate coagulation/flocculation, sedimentation, rapid sand filtration, and post-chlorination.

The municipal water supply is often unreliable, particularly in rural areas. The distribution system cannot satisfy peak demands, and, in some cases, water has to be

rationed.

Approximately 40 of 60 Egyptian cities have sewerage systems connected to existing (or under construction)

primary or secondary treatment plants, which provides

70 percent of the urban population with access to some

kind of sanitation services. However, 85 percent of the

total load of municipal sewage receives little or no treatment. In rural areas, the overwhelming majority of the

population does not have access to either sewer systems

or treatment facilities. The rural population uses on-site

disposal systems—leaching pits, septic tanks adjacent to

houses, or direct discharges of raw sewage to drains and

canals. The disposal of untreated sewage creates a threat

to public health and the environment.

Industrial wastewater discharges are considered one

of the major sources of water pollution in Egypt. The

major wastewater dischargers in Greater Cairo are metallurgical, sugar, and chemical industries. Large sources

of effluents in Alexandria are the pulp and paper, chemical, metallurgical, and textile industries. Industrial wastewater is either discharged directly into the waterways (for

example, in the cities of Suez, Port Said, Ismailia) or

through municipal systems which discharge into the Nile

and its canals. Over 80 percent of industrial discharges

do not receive any treatment. Industrial wastewater

dumped into public sewers without pretreatment causes

damage to sewerage systems through corrosion or by inhibiting biological processes.

In 1998, the total market for water and wastewater

technologies in Egypt was $856 million and growing at

an average rate of 10 percent a year. Imports comprised

over 90 percent of the market.74

Regulatory and Institutional Framework

Wastewater discharges in Egypt are regulated by

Law 93 of 1962 (and its Executive Regulations,

Decree 649 of 1962) and Law 48 of 1982 (and its

Executive Regulations, Decree 8 of 1983). Law 48 prohibits the discharge of untreated wastewater into groundwater and surface waters used as sources of potable water.

Discharges of treated wastewater into a waterway require

a license from the Ministry of Public Works and Water

Resources. Decree 8/1983 contains discharge standards

for treated industrial and municipal wastewater to be discharged into potable and non-potable surface waters and

groundwater.

Industries in Egypt are required to discharge their

wastewater into public sewers, except when they are located outside the coverage area. Decree 649 lists the types

of industrial establishments that need licenses to discharge wastewater into public sewers and the standards

they must adhere to.

73. The Environmental Industries Market in Hong Kong, Canada,

Department of Foreign Affairs and International Trade, 2001.

74. Egypt: Water Resources Equipment, Industry Sector Analysis, U.S.

Foreign and Commercial Service and U.S. Department of State, 1998.
Water and Wastewater Export Market Plan 41

At the national level, Law 4 of 1994 designates the

Egyptian Environmental Affairs Agency (EEAA) as the

overall national environmental coordination and supervision authority. In addition to the EEAA, many sectoral

ministries exercise environmental management responsibilities. The responsibilities of the relevant government

agencies in the water sector are summarized below:

 The EEAA coordinates with the appropriate authorities to issue and enforce licenses for projects in the

coastal zone.

 The Ministry of Health sets drinking water standards, industrial and municipal discharge standards

and monitors the quality of drinking water sources

and drinking water quality.

 The Ministry of Housing, Utilities, and New Communities (MHUNC) designs and constructs water

supply and treatment systems, sewerage and sewage

treatment facilities, issues and enforces licenses for

discharges to public sewers, and enforces relevant

discharge standards.

 The Ministry of Public Works and Water Resources

(MPWWR) issues and enforces licenses for discharges to surface waters and groundwater, enforces

relevant discharge standards, and monitors ambient

water quality.

 The Ministry of Interior’s Water Police Force

controls pollution of inland waters and coastal areas.

Enforcement of environmental regulations has been

poor and inconsistent. Enforcement responsibilities are

generally divided between the EEAA and the sectoral

ministries. The level of enforcement depends on the

power of responsible authorities and the willingness of

officials in the governorates (provinces) and municipal

governments to cooperate with these enforcers.

High rates of unemployment make the government a

reluctant enforcer where enterprise shut-down is widely,

though mistakenly, understood as the only enforcement

option available. Furthermore, the fact that the EEAA is

not the only enforcement agency complicates enforcement efforts. Since the regulations have been enacted,

the Egyptian government realizes that enforcement is

costly and technically complex. The government intends,

therefore, to focus first on major polluters and assist them

in moving toward compliance, while developing a longterm monitoring and enforcement program.

Overall, Egypt’s environmental regulatory and institutional framework suffers from:

 the lack of effective operational strategies;

 redundancies and fragmentation of responsibilities

between the EEAA, sectoral ministries, governorates, and municipal authorities;

 weak monitoring capacity at the national and local

level; and

 limited technical, management, and enforcement

capabilities to address the major environmental

issues of the country.

Privatization

In the 1990s, the Egyptian government launched a

comprehensive Economic Reform and Structural Adjustment Program supported by the International Monetary

Fund (IMF), the World Bank, and other international donors. As part of its reform program, the government is

focusing on liberalizing its trade regime, encouraging

private sector growth, and improving the investment

climate.

In 1996, the Egyptian government began to make

progress toward selling off state-owned companies. It is

considering offering concessions for water and wastewater utilities. For example, as part of its five-year plan

(1998–2002), the government is planning to upgrade 150

facilities so that they can be transferred to the private

sector, as well as construct 12 new facilities for the new

industrial cities through BOT arrangements.

Trade and Investment Policy

One of the key areas of Egypt’s economic policy reform has been trade liberalization. In 1995, Egypt joined

the WTO. Egypt and the United States agreed in May

1998 to begin talks on a Trade and Investment Framework Agreement (TIFA). The TIFA is expected to be an

intermediary step before starting talks on a free trade area

agreement at some future date. Egypt has been in negotiations with the European Union on an association agreement under the Mediterranean initiative since 1995. New

import and export regulations adopted in January 1998

reduced import duties and eliminated some non-tariff

trade barriers. However, Egypt has yet to change many

of its protectionist policies.

The 1997 investment law reaffirms basic guarantees

for investors and clarifies the framework for investment

incentives. In an effort to improve coordination between

the central government and the localities on investment

issues, Egypt has also established investment offices in

the governorates.

However, Egypt has yet to reduce trade barriers and

eliminate unnecessary regulations and restrictions on

business activities. Law 228/1997 reduces import duties

on finished goods that have at least 30 percent local content, from an average of 50 percent to 45 percent. These

reductions are part of the IMF-approved economic liberalization program and are meant to encourage invest-
42 U.S. Department of Commerce, International Trade Administration

ments in local manufacturing. In addition to the import

duty, a sales tax ranging from 5 percent to 25 percent is

added to the final customs value of the imported item.

The current tariff policies and structures do not give special treatment to environmental equipment.

The domestic industry also remains protected by many

non-tariff import barriers, including service fees and the

mandatory product inspection list. In addition, administrative procedures regarding customs clearances appear

to be causing unnecessary delays to bringing environmental equipment into the country. Egyptian customs

authorities do not have to justify their decisions, and there

is no formal appeals process. The customs procedures

are subjective in determining whether a commodity fits

in one tariff category or another, and experience has

shown that the same commodity may be classified differently and consequently be subject to different tariff

rates under different shipments.

In FY 1999, the U.S. Congress reduced the amount of

aid under the Egypt Economic Support Fund, with the

objective of moving the U.S.-Egypt partnership from an

aid-based relationship to more mature cooperation based

on trade. Nonetheless, Egypt remains the world’s largest

recipient of U.S. foreign assistance, with $695 million

worth of aid expected in FY 2001.

U.S. Market Share and Competition

U.S. companies have a lead in Egypt’s water and

wastewater sector, mostly due to the large USAID procurements. The U.S. market share was about 35 percent

in 1998.75 French firms are the main competitors of U.S.

suppliers of water supply equipment, while British companies have a high profile in the municipal wastewater

treatment market. German and Italian firms are also active in this market.

Market Opportunities

USAID/Egypt operates the largest environmental program of all USAID missions. The United States is also

by far the biggest donor for environmental initiatives in

Egypt.

Egypt’s water and wastewater sector represents enormous opportunities for U.S. equipment suppliers, mostly

through direct USAID procurement. USAID’s water/

wastewater program also supports the commercialization

of water and wastewater management through private

sector participation, including greater autonomy for utilities in planning, construction, and financial management,

as well as an improved regulatory climate for private investment in the sector.

Over the past 20 years, USAID has invested approximately $2.6 billion in Egypt’s water and wastewater infrastructure.76 The following are USAID/Egypt’s largest

ongoing projects in this sector, all of which involve extensive procurement of U.S. equipment.

Under the Secondary Cities Development project

(1994–2002, $215 million), USAID is expanding water

and wastewater infrastructure investments to reach the

communities of Mansoura, Nuweiba, Luxor, and the

Aswan group of Nasr City, Kom Ombo, and Darawo City.

Water and wastewater treatment works include collection/distribution pipeline networks, pumping stations, and

storage tanks.

Working with the General Organization for Sanitary

Drainage of Alexandria, USAID has invested $425 million in the design, construction, and start-up of a sewerage system for approximately 75 percent of the city since

1978. The current Alexandria Wastewater System Expansion II program (1998–2002, $90 million) will double

the capacity of two treatment plants, upgrade the pumping stations, and improve the sludge disposal systems to

accommodate the projected population growth. The Alexandria Drinking Water initiative (1998–2002, $200

million) will assist the Alexandria Water General Authority in implementing its water supply and distribution systems master plan.

The three newly formed Economic General Authorities for Water Supply and Sanitary Drainage in the governorates (provinces) of Fayoum, Beni Suef, and Minya

are the partners in the Egypt Utilities Management program (1997–2004, $215 million) to provide water and

wastewater services for their residents.

It should be noted that USAID’s assistance in Egypt

is gradually moving away from infrastructure construction and technology demonstration in the water sector

toward greater policy assistance to manage the systems

created through past capital investments.

Installation of new sewer and potable water systems,

and rehabilitation of old water infrastructure are also

major national government priorities in the 1998–2002

five-year plan. The projects tentatively approved by the

Egyptian government include:

 Upgrading 1,000 existing compact water treatment

units.

 Constructing 500 new units of 2,000–5,000 m3

/day

capacity.

 Upgrading 26 existing water treatment facilities,

including major rehabilitation and repairs.

76. USAID FY 2001 Program Description and Activity Data Sheet,

75. Ibid. U.S. Agency for International Development, 2001.
Water and Wastewater Export Market Plan 43

 Installation of 400–600 wastewater treatment units

in rural areas (500–2,000 m3

/day).

The World Bank has recently launched a Middle East

and North Africa Water Partnership program that is designed to energize and harmonize government and donor efforts in the water and wastewater sector. Ultimately,

it will increase overall investment in this sector by 200

to 300 percent. The program will facilitate investment

from government, donor, and private sector sources for

rehabilitation and expansion of water distribution and

transfer networks; expansion of wastewater collection and

treatment systems; and protection of water quality.

There are opportunities in the municipal wastewater

market for foreign companies in environmental engineering and design of new treatment systems, sales of equipment for pump stations and wastewater treatment plants,

and, possibly, operation and maintenance contracts for

secondary treatment facilities. For joint ventures between

foreign and local companies, there are opportunities to

construct/expand new sewerage systems, to manufacture

and sell components for compact wastewater treatment

facilities, and to manufacture and sell PVC pipes and

valves. There may also be opportunities for the operation and maintenance of existing water and wastewater

facilities.

In the water supply and treatment market segment, attractive business opportunities include sales of compact

water treatment units, air blowers, filters, boosters, chemicals, pipes, valves, and turbines. Egypt is also one of the

largest water pump markets in the world. Imports of water pumps in Egypt totaled $100 million in 1999 and the

market is expected to grow over the next few years by

15 percent annually.77 The public sector’s market share

of imported water pumps is 70 percent. In the water and

wastewater market, the best sales prospects for pumps

are for horizontal end-suction water pumps, split case

water pumps, and feed water boiler pumps.

Most of the money for imports of U.S.-manufactured

industrial wastewater treatment equipment is likely to

come from Egyptian private-sector industries, since

grants are generally not available in this market segment.

The World Bank has established a $39 million Pollution

Abatement Fund under the Egypt Pollution Abatement

Project to finance environmental investments through

local commercial banks. To qualify, the Egyptian firms

must be financially viable existing public and private

enterprises. The eligible projects are investments in pollution prevention and effluent pre-treatment.

The biggest opportunities in industrial wastewater

treatment will be in food processing (sugar, edible oils,

onion dehydration); cement, steel and iron; chemicals and

fertilizers; and textiles, especially at factories located

along the Nile River.

In the short term, demand will be for unsophisticated

technologies that treat the most obvious pollutants and

are easily operated and maintained. Process changes,

improved housekeeping, and water conservation and reuse will be priorities. In addition, some of the existing

systems are not in working condition due to a lack of

spare parts and trained operators, which creates a market for spare parts and consulting services.

India

Population: 1.014 billion (2000)

Urban population: 28 percent (2000)

GNP per capita: $450 (1999)

GDP average annual growth rate: 6.1 percent (1990–1998)

Water supply coverage (urban/rural): 92 percent/

86 percent (2000)

Sanitation coverage (urban/rural): 73 percent/

14 percent (2000)

Market Overview

It is estimated that 70 percent of India’s surface water

resources are severely polluted. Municipal sources account for about three-fourths of total wastewater generation in volume and almost one-half of the total pollution

load in the country. In the industrial sector, although 75

percent of the large and medium-sized enterprises have

installed adequate effluent treatment facilities, small-scale

industries (particularly in textile, electroplating, and food

processing sectors) still lag behind in terms of regulatory compliance.

In India’s 23 largest cities (with population of more

than 1 million), only 31 percent of wastewater is treated.

Three of them have only primary treatment facilities and

13 have both primary and secondary treatment facilities.

The biological systems for secondary treatment installed

by the municipalities/water supply and sewerage boards

of these metro cities include trickling filters, activated

sludge with compressed aeration and activated sludge

with mechanical aeration, and oxidation ditch technologies.78 As a result, the quality of India’s water supply is

77. “Egypt: Water Pumps Market,” International Market Insight, U.S.

and Foreign Commercial Service and U.S. Department of State, 2000.

78. Business Guide to the Water and Wastewater Treatment Market

in India, Canada, Department of Foreign Affairs and International

Trade, 1999.
44 U.S. Department of Commerce, International Trade Administration

very poor: only 20 percent of the available drinking water meets health safety standards.

The key factors contributing to the poor operation and

maintenance of India’s water and wastewater systems are

the lack of funding, inadequate data, designs, and survey plans, poor personnel training, and the lack of monitoring. All publicly owned water and wastewater utilities

continue to experience economic constraints owing to

extremely low user fees for water and wastewater treatment services, limiting their investment potential. Existing water connection charges and user fees are highly

subsidized. To meet the funding requirements, a number

of utilities/municipalities are trying to raise resources

from the municipal debt market.

The 2000 total annual water and wastewater market

in India was estimated at almost $1.2 billion, with the

import market size at about 40 percent of this number,

or $472 million. The level of spending in this sector has

been increasing at an average rate of 14 to 15 percent

over the last four to five years.79 The main drivers for

this growth are the increased enforcement in the industrial segment and sustained infrastructure funding from

multilateral development banks in the municipal segment.

Regulatory and Institutional Framework

India has a comprehensive legal framework for water

pollution control. The Central and State Pollution Control Boards implement the Water Act of 1974. The Central Board formulates standards, while the State Boards

are in charge of planning and executing environmental

programs, including enforcement. Under the 1986 Environmental Protection Act, the Central Board establishes

discharge standards on the basis of best available technology, but the State Boards are authorized to apply more

stringent standards for a specific category of industries

under their jurisdiction, if required. The Water Cess Act

of 1977 stipulates the collection of water user fees from

certain categories of industries.

There is a clear trend in India’s environmental regulations to prescribe more enforceable mass-based loading

limits for effluents rather than concentration-based wastewater discharge standards, thereby increasing the demand

for effluent treatment technologies. The sharp increases

in water user fees and the central government’s intent to

apply them to all industry sectors rather than only select

ones drives Indian industry to identify and exploit opportunities for water conservation. An ongoing policy

debate is concerned with the integration of appropriate

market-based instruments into the existing commandand-control regulatory regime to provide incentives for

cleaner technologies and pollution prevention.

There is also a noticeable trend among leading Indian

companies to obtain Environmental Management Systems (ISO 14001) certification for better corporate visibility and global outlook. Over 90 companies in diverse

industry sectors have already obtained ISO 14001 certification.80 The growing acceptance of ISO 14001 is likely

to generate demand in the area of industrial pollution prevention and waste minimization.

Privatization

The government continues to dominate India’s infrastructure sectors. Although there is a policy debate on

the need to privatize the existing publicly owned water

and wastewater treatment works, official policy and

guidelines are yet to be framed to give a definite direction to the marketplace.

However, many of India’s state and local governments

are bringing private sector financing into the development of urban water supply and sewerage systems. Many

Indian cities and water boards are entering into service

and management contracts to improve the quality of service and reduce costs. These contracts range from labor

and service (in almost all Indian cities) to operation and

maintenance of water and wastewater treatment plants

(for example, in Chennai and Mumbai). BOT and BOO

schemes have been implemented in the cities of Tirupur,

Pune, Hyderabad, Bangalore, Goa, Kolhapur, Dewas, and

Cochin.81 The following are just three examples of nu80. Business Guide to the Water and Wastewater Treatment Market

in India, Canada, Department of Foreign Affairs and International

Trade, 1999.

81. “India: Water Resource Development Equipment,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of State, 1999.

Table 4.6. Estimated Size of the Water and Wastewater

Technologies Market in India, 2000 (millions of U.S.

dollars)

Total Growth Rate,

Local Market 2000–2001

Production Imports Size (percent)

Water Treatment

and Supply 593 395 988 13%

Wastewater

Treatment 115 77 192 15%

Total 708 472 1,180

Sources: “India: Water and Wastewater Treatment Market” (2000) and

“India: Wastewater Resource Development Equipment” (1999), Industry Sector Analyses, U.S. and Foreign Commercial Service and U.S.

Department of State.

79. “India: Water and Wastewater Treatment Market,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of State, 2000.
Water and Wastewater Export Market Plan 45

merous public-private partnerships in the water and

wastewater sector in India:

 The Pune Municipal Corporation has contracted the

operation and maintenance of the water supply

system to a private company.

 In Chennai, municipal authorities have contracted

out the operation and maintenance of 75 pumping

stations and are planning to do it for other water

supply services.

 A new development program in Tirupur, Corporation

Limited, is implementing a $330 million, 30-year

comprehensive BOT scheme for the city’s water and

sewerage system that would rely for its profitability

on the collection of increased water and wastewater

fees. The project will supply 185 million liters of

drinking water per day and will build a 55 km-long

pipeline and about 350 km of water distribution

network, drinking water and wastewater treatment

plants, pumping stations, and conveyance facilities.

Trade and Investment Policy

India’s new Export-Import Policy announced in April

1999 signifies a move in the direction of a more liberal

trade regime. India has recently reduced tariffs and removed quantitative restrictions on many items. Import

tariff rates have been reduced from a peak rate of 300

percent in 1991 to a ceiling of 30 percent in the 1999/

2000 budget. Customs duties for energy-efficient equipment and certain pollution control equipment are lower

(5 to 15 percent). India is committed to a phased reduction in duty rates in line with its membership in the WTO.

The new industrial policy introduced in 1991 marked

a major shift in India’s investment climate, relaxing or

eliminating many restrictions on investment and simplifying the investment approval process. The government

has expanded the list of industries eligible for automatic

approval of foreign investments and also raised the upper level of foreign investments from 51 to 100 percent

in 1998. Although the current government led by the

Bharatiya Janata Party has taken a more nationalistic

stand and advocated a protectionist “swadeshi” (made in

India) approach to the economy, it continues to encourage foreign investment in core infrastructure sectors.

As part of its long-time confrontation with Pakistan,

India conducted a series of nuclear tests in May 1998

which resulted in the imposition of economic sanctions

by many countries, including the United States. Although

the Indian government is trying to downplay the negative effect of the sanctions (they do not affect the activities of the U.S. Trade and Development Agency, U.S.

Ex-Im Bank, and OPIC in India), they are taking a certain toll on the country’s economy as a whole (due to

the reduced foreign assistance) and on the U.S.-India

trade and investment climate.

The United States continues to be India’s largest trade

and investment partner. The potential for expanded trade

and investment is enormous but dependent on the future

of Indian economic reforms. Under a bilateral trade

agreement signed in January 2000, India has agreed to

lift more than 1,400 specific trade restrictions for U.S.

products by April 2001. However, India is not a member of the Paris Convention on intellectual property protection and does not have a bilateral patent agreement

with the United States, which hampers U.S. investment

in India.

U.S. Market Share and Competition

More than half of India’s market demand for water

and wastewater equipment is met by local manufacturers. The current annual turnover of Indian private water

and wastewater companies is about $700 million. Out

of this amount, almost 90 percent comes from equipment suppliers and the rest from the consulting business

(most equipment manufacturers also offer feasibility assessments and engineering consulting services).82 Most

Indian water equipment suppliers produce pipes, water

pumps, valves, and other relatively unsophisticated

equipment. Some of the major Indian companies in this

sector are Larsen and Toubro, Subhash Pipes, the GVK

Group, Thermax Ltd., Jain Pipes Ltd., and Triveni Engineering & Industries Ltd.

The U.S. Commercial Service estimates the U.S. share

of the import market at about 25 percent in 2000, up from

17 percent a year before.83 European firms, especially

from France (Vivendi and Degremont), the United Kingdom (Biwater, Bovis Group, Thames Water), and Germany (the Krupp Development Group, Nestler) are very

strong competitors. European companies have gained

their position because they market aggressively, and their

governments extend financial aid to India in connection

with water infrastructure development projects. South

Korean firms also play a significant role in the Indian

water equipment market.

Very often, Western technologies are considered to be

expensive in India. To overcome this barrier and remain

competitive, it is important to compare both the capital

and operating costs of equipment with comparable costs

82. Business Guide to the Water and Wastewater Treatment Market

in India, Canada, Department of Foreign Affairs and International

Trade, 1999.

83. “India: Water and Wastewater Treatment Market,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of State, 2000.
46 U.S. Department of Commerce, International Trade Administration

of competing equipment. In many cases, a little higher

capital investment for equipment would result in lower

daily operating costs for the end user. This analysis must

be part of marketing strategy since the offered up-front

costs of product/services considerably impact the final

decision of the end users in India.

Forming a strategic alliance with the right Indian partner is perhaps the most important aspect to getting a niche

in the local market. Affiliation with reputable and knowledgeable local partners helps considerably in building

relationships directly with end users, adapting to local

business cultures, keeping abreast with vital market information and in dealing with local issues. The long-term

strategic alliance creates competitive advantage and solid

business growth. Therefore, alliances must be forged on

a long-term basis. Businesses choosing the local partner

should carefully and cautiously consider this fact when

considering a local partner.

Indian industry prefers joint ventures or technology

licensing agreements where the Indian partner manufactures equipment in India and imports either the design or

the core process from abroad. Under such arrangements,

Indian companies can manage on-site execution of

projects, with the U.S. partner providing the required

technological expertise. This approach generates cost

savings and competitive advantages for U.S. firms.

Market Opportunities

In the coming years, the level of investment is likely

to be higher in India’s municipal water and wastewater

treatment market segment compared to the industrial one

and would be primarily driven by assistance from external donor agencies.

The World Bank and the Asian Development Bank

have been the principal sources of external financial assistance. The following are key World Bank and Asian

Development Bank projects in water supply and sanitation that are of potential interest to U.S. companies:

 Third Chennai Water Supply and Environmental

Sanitation Project (World Bank, $200 million). The

project will finance the rehabilitation and expansion

of water distribution and sewerage system improvements, including low-cost sanitation.

 Second Hyderabad Urban Water Supply and

Sanitation Project (World Bank, $180 million). The

project includes the reorganization of the Hyderabad

Metropolitan Water Supply and Sewerage Board;

reduction of water losses; rehabilitation and expansion of water supply systems; and strengthening and

expansion of the sewerage system.

 Rajasthan Urban Infrastructure Development

Project (Asian Development Bank, $250 million).

This project will finance, among others, a water

supply rehabilitation and expansion program and a

wastewater management program.

 Karnataka Urban Development and Coastal

Environmental Management Project (Asian

Development Bank, $175 million). The project will

support improvements in water supply and sanitation

in the Bangalore sub-region.

Significant market opportunities are also created by

the increased public sector funding for water and wastewater infrastructure in India. Under its ninth five-year

plan (1998–2002), India’s central government will allocate $300 million for urban and rural water supply

projects. The central government-sponsored National

River Action Plan is a large source of investments in

municipal wastewater treatment. The plan is worth about

$486 million and covers a total of 141 towns in 14 states.

In addition, the Indian government has also approved

clean-up programs for the Gomti, Yamuna, and Damodar

rivers, amounting to $135 million. These upcoming investments bring good business prospects for U.S. companies for providing wastewater treatment equipment and

services.

There is growing policy support in India for common

effluent treatment plants for clusters of small-scale industries. In 2000, there were a total of 101 plants around

the country. State governments are spending substantial

amounts of money for the promotion of these plants. For

example, the Delhi government has undertaken an ambitious project to construct 15 plants for 22 industrial estates in the city. Each common effluent treatment plant

is expected to cost about $1.7 million. While 50 percent

of this cost will be met by local industries, the Delhi government would provide the remaining 50 percent.84

The number of industrial units in common effluent

treatment plants could be anywhere between seven and

2,200, but generally varies between 50 and 100. They

typically include a screen/grit chamber, equalization tank,

flash mixer, clariflocculator, send filter, aerator, sludge

thickener, rotary vacuum filter, and an activated carbon

column as part of the treatment chain. These plants represent promising opportunities for U.S. companies producing these technologies.

There are a number of industrial estates that rely on

treated wastewater from municipal wastewater treatment

plants for their water needs; for example, the Manali in84. Business Guide to the Water and Wastewater Treatment Market

in India, Canada, Department of Foreign Affairs and International

Trade, 1999.
Water and Wastewater Export Market Plan 47

dustrial estate in Chennai. U.S. companies having expertise in water recycling may have a competitive edge in

this emerging market niche in India.

The demand for water and wastewater testing and

analysis equipment is primarily driven by regulatory enforcement. The growth in this market segment has been

relatively low in the last three decades. However, the recent enforcement strengthening trend may create new

opportunities. Many state pollution control boards have

undertaken major programs to enhance in-house monitoring and analysis capabilities. Moreover, large and

medium-sized industrial facilities are also important buyers of state-of-the-art monitoring and analysis equipment

and services, since they are now required to regularly

monitor their own discharges.

India’s private financial institutions are an important

source of financial assistance for water and wastewater

projects. The most important ones include the Industrial

Finance Corporation of India (IFCI), the Industrial Credit

and Investment Corporation of India (ICICI), the Industrial Reconstruction Bank of India (IRBI), and the Industrial Development Bank of India (IDBI). IFCI, ICICI,

and IDBI provide direct financial assistance (at a 15.5

percent interest rate, for up to 75 percent of the project

cost) to large and medium-sized industries to install effluent treatment plants. ICICI also supports technology

development ventures, while IRBI provides credit and

investment needed for rehabilitation of industrial projects.

Infrastructure Leasing & Financial Services, a private

venture capital fund, recently raised $250 million from

debt market for Ahmedabad Municipal Corporation to

be used for improving the city’s infrastructure and $425

million for the Tirupur Industrial Area wastewater management project. The Housing Urban Development Corporation has recently created a new urban infrastructure

fund that also provides loan assistance to urban water

supply and sewage treatment projects. The total loan assistance approved under the fund in 1997–98 was $20

million.

U.S. exporters should take advantage of opportunities

created by U.S. assistance programs in India. For example, under USAID’s Urban and Environmental Credit

Program, a loan guarantee of about $25 million helped

launch South Asia’s first municipal bond for improvement of water, sewerage, and waste collection systems.

This bond, for the city of Ahmedabad, has encouraged

13 other Indian cities to seek credit ratings for future

bonds or other debt instruments to finance environmental infrastructure projects. USAID assistance also helped

catalyze the Tirupur water supply and sewerage BOT

project. The U.S. engineering firm, Bechtel, is part of

the consortium that was awarded this project.

In 2000, the U.S. Ex-Im Bank announced a new line

of credit of $500 million (with $100 million reserved for

environmental infrastructure projects) for U.S. firms trying to access the Indian market. US-AEP’s technology

representatives in New Delhi, Mumbai, Chennai, and

Calcutta are working to identify appropriate partners for

U.S. firms in the field.

Japan

Population: 127 million (2000)

Urban population: 79 percent (2000)

GNP per capita: $32,230 (1999)

GDP average annual growth rate: 1.5 percent (1990-1998)

Water supply coverage (total): 96 percent (1990-1996)85

Sanitation coverage (total): 100 percent (1990-1996)86

Table 4.7. Technology Best Prospects in India’s Water and Wastewater Treatment Sector

Subsector Best Prospects

Water distribution systems Pumps, valves, motors, compressors, storage tanks, repair equipment for leaking pipes,

meters

Municipal water treatment Ultraviolet disinfection systems, advanced reverse osmosis and membrane filtration systems,

aerators, decanters

Municipal wastewater treatment Advanced oxidation systems, energy efficient aerators, upflow anaerobic sludge blanket

systems

Industrial wastewater treatment Rotary bio-disc systems, sequencing batch reactor systems, automatic chemical dosing

systems, oil removal systems, industry-specific pollutant removal/reduction systems

Analytical/monitoring equipment Auto-analyzers for phosphorus and nitrogen, thermohydrographs, total organic carbon

(for all sub-sectors) analyzers, electronic flow meters, continuous pH meters, spectrophotometers, data loggers

Sources: “India: Water and Wastewater Treatment Market” (2000) and “India: Wastewater Resource Development Equipment” (1999), Industry

Sector Analyses, U.S. and Foreign Commercial Service and U.S. Department of State.

85. World Development Indicators, World Bank, 2000.

86. Ibid.
48 U.S. Department of Commerce, International Trade Administration

Market Overview

Almost 30 percent of rivers and about 60 percent of

lakes and reservoirs in Japan exceed national water quality standards,87 primarily because the country has been

slow to develop municipal wastewater treatment systems

and has not sufficiently enforced industrial effluent standards. In addition, the rapid growth of metal plating, precision machinery, and electronics industries has led to

increased discharges of organic chlorine solvents.

The market for wastewater treatment equipment in

Japan was estimated at $6 billion in 1996. The market is

growing at a rate of 5 to 8 percent a year and is expected

to exceed $10 billion in 2010.88 The Ministry of

Construction’s eighth sewerage development plan envisioned spending over $217 billion on municipal wastewater treatment between 1996 and 2002.89

Regulatory and Institutional Framework

Japan’s Water Pollution Control Law, which was

amended in 1996, establishes two categories of national

effluent standards, one for public health and one for environmental protection, that are implemented by the national environmental agency. Prefectural and municipal

governments can promulgate more stringent standards if

warranted by local environmental conditions.

Prefectures and municipalities are responsible for water supply and sewerage within their jurisdictions. Japan’s

municipal water supply and sewerage infrastructure is

publicly owned and operated.90 The Ministry of Construction is in charge of implementing water and wastewater

infrastructure development projects.

Trade and Investment Policy

The Japanese government has removed or liberalized

most legal restrictions on foreign investment. However,

direct foreign investment levels have remained small relative to the size of the economy, reflecting a range of longstanding structural impediments, including:

 a high overall cost structure that makes market entry

and expansion expensive;

 corporate practices and market rules that inhibit

foreign acquisition of Japanese firms; and

 exclusive buyer-supplier networks and alliances, still

maintained by some Japanese companies belonging

to the same business grouping (or keiretsu), which

limit competition from foreign firms.

There are no regulations restricting the access of foreign manufacturers to the Japanese market. The Japanese

government subsidizes purchasers of environmental

equipment, both domestically produced and imported, by

granting special tax deductions or low-interest loans.

Japan has instituted a number of programs to support

imports that are administered through the Japan External Trade Organization (JETRO). JETRO’s activities are

designed to support industrial cooperation, promote twoway direct investment, and disseminate market information. JETRO’s Technology Tie-up Promotion Program

links foreign companies with their high-tech Japanese

counterparts for various types of strategic alliances, including joint ventures, joint research and development

projects, and technology imports.

U.S. Market Share and Competition

The market is highly competitive with a large number

of Japanese suppliers. There are about 120 water and

wastewater equipment manufacturers in Japan, nearly

half of them large companies. The main players are the

Ebara Corporation, Kubota Corporation, Kurita Water

Industries, and Mitsubishi Heavy Industries, which have

a combined 27 percent share of Japan’s water and wastewater equipment market.91 Ebara manufactures a great

variety of water supply and treatment equipment (filters,

water conditioning equipment, membranes, pumps,

valves, etc.), as well as wastewater treatment equipment

(effluent recycling systems, physical and biological treatment systems, chemicals, sludge handling equipment,

etc.). It also provides plant design and construction, process engineering, and consulting services. Mitsubishi offers a similarly wide array of equipment and services in

this market. Kurita specializes in membrane technologies, wastewater treatment chemicals, and sludge reduction systems. Kubota is a major pipe manufacturer.

Japanese companies have managed to satisfy most of the

market need by adapting relevant technologies that already exist in the country.

The Japanese government also sponsors the development of new water and wastewater technologies by do87. “Japan: Wastewater Treatment Equipment,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of

State, 1998.

88. “Environmental Market in Japan,” International Market Insight,

U.S. and Foreign Commercial Service and U.S. Department of State,

2000.

89. “Japan: Wastewater Treatment Equipment,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of

State, 1998.

90. There was not enough information to have a separate privatization

section in the Japan profile. 91. Ibid.
Water and Wastewater Export Market Plan 49

mestic suppliers. For example, the ACT-21 technology

development project (to be completed in 2001) targets

the design of new drinking water treatment and treated

wastewater recycling technologies.

There is no publicly available information on Japan’s

imports of water and wastewater equipment, since Japan

has no customs classification on environmental products.

However, indirect evidence shows that these imports are

insignificant. In cases where foreign equipment is used,

it is usually produced locally under licensing arrangements rather than imported.92 Foreign companies find it

difficult to compete in the Japanese market due to the

considerable time and costs required to modify equipment to meet regulatory standards and various local user

specifications. The top two exporters of wastewater

equipment to Japan are the United States and Germany.93

U.S. water and wastewater equipment suppliers have

been successful in the Japanese market in a few technology areas, including reverse osmosis and nanofiltration

technologies, as well as water quality analysis instrumentation. The successful U.S. companies (Dow Chemical,

Pall Corporation, Perkin-Elmer, Millipore, and several

others) have established themselves in Japan for the long

term and maintain local wholly owned subsidiaries. U.S.

firms have to compete against local suppliers not only in

price and technology, but also in maintenance costs, energy, and space efficiency, which is so important in Japan. The long-term competitiveness of U.S. companies

doing business in Japan also depends on their ability to

be very customer-oriented and meet the extremely high

Japanese standards for quality, product durability, and

after-sale service.

Market Opportunities

The activated sludge process has been used in Japan

extensively for decades for both municipal and industrial wastewater treatment. However, in recent years, the

anaerobic digestion process has become increasingly

popular because of its smaller required installation space,

lower operating costs and sludge volume generated. This

trend creates opportunities for U.S. exporters of this technology. Other best sales prospects include high-performance filters, industrial wastewater recycling systems,

sludge dehydration equipment, as well as sampling, analytical, and monitoring instrumentation.

Machinery manufacturing, food processing, steel, and

chemical industries present the greatest opportunities for

suppliers of industrial effluent treatment equipment.

Mexico

Population: 99 million (2000)

Urban population: 74 percent (2000)

GNP per capita: $4,420 (1999)

GDP average annual growth rate: 3.1 percent (1990–2000)

Water supply coverage (urban/rural): 94 percent/

63 percent (2000)

Sanitation coverage (urban/rural): 85 percent/

32 percent (2000)

Market Overview

Mexico’s water market is the single most important

market for U.S. exports of environmental equipment and

services because of the need for infrastructure investments, the country’s proximity to the United States, and

the strong trade relationship between the United States

and Mexico.

Currently, more than 13 million urban residents in

Mexico do not have access to potable water due to the

lack of infrastructure. The number is much higher in rural areas. The mismanagement of water supplies is also

a big problem—an estimated 40 percent of potable water is lost through leakage.94 There has been some improvement over the last few years. For example, the

percentage of residents having access to potable water

has increased to 87.4 percent.95

Wastewater treatment, both industrial and municipal,

is inadequate. Only 17 percent of wastewater is treated

at all, and only 12 percent to regulatory standards.96 Sixty

percent of industrial wastewater is discharged directly

into open waters.97 It is estimated that Mexico will have

to invest approximately $7.2 billion and spend about $1

billion annually to meet wastewater treatment standards.98

92. “Japan: Wastewater Treatment Equipment,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of

State, 1998.

93. The Environmental Market in Japan, Canada, Department of Foreign Affairs and International Trade, 1999.

94. The Environmental Market in Mexico, Canada, Department of

Foreign Affairs and International Trade, 2000.

95. Mexico Environmental Technologies Export Market Plan, U.S.

Department of Commerce, International Trade Administration, Office of Environmental Technologies Industries, 2001.

96. Ibid.

97. The largest generator of industrial effluents is the sugarcane industry (40 percent), followed by the chemical industry (18 percent),

the rest coming from the pulp and paper, petroleum, beverage, textile, iron and steel, electronics, and food processing industries.

98. National Ecology Institute, quoted in the Mexico Environmental

Technologies Export Market Plan, U.S. Department of Commerce,

International Trade Administration, 2001.
50 U.S. Department of Commerce, International Trade Administration

According to the country’s National Water Commission (CNA), only about 8 percent of industrial wastewater and 15 percent of municipal sewage is treated.99

Nearly one-quarter (200) of the existing municipal wastewater treatment plants are out of operation. While the

largest corporations have made real improvements in

treating their wastewater, the same cannot be said for

smaller companies.

Two areas of Mexico are facing particular problems

with respect to water and wastewater. The first is Mexico

City, home to 20 million people. Mexico City must

supplement its meager local water resource at great cost

by pumping water from 127 kilometers away. In addition, overexploitation of aquifers for drinking water has

resulted in rapid land subsidence (at the rate of 50 centimeters annually) and damage to the infrastructure. In

addition, the capital city alone accounts for 50 percent

of the sewage collection in the country, and the sewage

treatment is inadequate. In fact, Mexico City’s sewage

flows into a river used for irrigation purposes, creating a

substantial human health hazard.

Another area with acute water-related problems is the

U.S.-Mexico border, which stretches 2,000 miles. The

operation of some 2,000 maquiladoras (in-bond plants

that operate under special Mexican customs treatment and

preferential foreign investment regulations) has produced

an enormous population shift to the border region, where

there was little infrastructure to support the booming development. The lack of adequate drinking water supply

infrastructure and disposal of untreated industrial and

municipal effluents (sometimes directly into the sources

of drinking water) have resulted in severe health risks to

the border communities.

The Mexican government recognizes water and wastewater management as one of the top priorities of its

market-oriented program. Water prices have risen dramatically in recent years as the government has removed

subsidies and begun to implement cost-recovery pricing.

The other major direction of the government program was

to involve the private sector (mostly through 10 to 15

year concessions) in the improvement and management

of Mexico’s water and wastewater infrastructure. With

the exception of rural areas, the government expects much

of the funding for new and rehabilitated wastewater treatment plants to come from the private sector. The United

States has been very active in this region, investing approximately $2.5 billion dollars to address environmental infrastructure needs of border communities.100

These programs, together with a huge need for investment, have created a large water and wastewater market

in Mexico. Its size was expected to reach $2.39 billion

in 2000, with annual growth of about 10 percent.101 The

water supply market segment alone was estimated at $1.9

billion in 1999, with a 5 to 7 percent growth rate per

year.102 The industrial wastewater treatment market is

much smaller, just $94 million in 1998, but is growing at

a much faster rate of 16 to 18 percent annually. The share

of imports in the overall market is about 80 percent.103

Regulatory and Institutional Framework

The system of effluent permits is a key element of

Mexico’s water and wastewater management program.

The previous system of industry-specific effluent limits

was replaced in 1997 with a simpler system based on

specific pollutants and the type of receiving waters (for

direct discharges). Although the standards are tougher in

heavily contaminated areas, they are, overall, less stringent than under the previous regulation and allow municipalities to limit themselves, in most cases, to primary

wastewater treatment.

Compliance deadlines for municipalities vary depending on their population: the year 2000 for cities and towns

with over 50,000 residents, and 2005 and beyond for

smaller communities. Industry compliance deadlines are

based on daily BOD discharge volumes and are, similarly, the year 2000 for facilities discharging more than

3 tons/day, and 2005 and beyond for those that discharge

less.

At the federal level, the CNA has ultimate responsibility for water resources and is responsible for enforcing effluent standards for direct discharges.

Each of the states has its own water law, which determines how water services are provided and the way in

which water tariffs are set. These laws also specify how

much private participation is allowed in the provision of

services and development of infrastructure.

Mexican municipalities are responsible for providing

water and wastewater treatment within their jurisdictions.

New regulations covering discharges into sewerage systems were promulgated in 1998. Since the municipality

is responsible for the quality of the wastewater it discharges to open waters, it has an incentive to ensure that

industries pretreat their effluents and comply with stan101. FY 2001 Country Commercial Guide: Mexico, U.S. and Foreign

Commercial Service and U.S. Department of State, 2000.

102. “Potable Water Resource Equipment,” Industry Sector Analysis,

U.S. and Foreign Commercial Service and U.S. Department of State,

1998.

103. “Industrial Wastewater Treatment and Recycling Equipment,”

Industry Sector Analysis, U.S. and Foreign Commercial Service and

U.S. Department of State, 1997.

99. The Environmental Market in Mexico, Canada, Department of

Foreign Affairs and International Trade, 2000.

100. Mexico Environmental Technologies Export Market Plan, U.S.

Department of Commerce, International Trade Administration, 2001.
Water and Wastewater Export Market Plan 51

dards for indirect discharges. Otherwise, the municipality must pay related effluent charges.

One important characteristic of the regulatory climate

is the tension between federal and local governments regarding large municipal water and wastewater projects.

Priority municipal wastewater projects in Mexico City

and Guadalajara have been stalled due to political disputes between the federal and local governments.104

CNA’s staff shortages and the limited availability of

monitoring equipment have impeded enforcement of

water laws in Mexico. Enforcement efforts were reduced

in the wake of the 1995 economic crisis (in order to avoid

even higher unemployment) but are picking up again.

Under a recent regulation, state and municipal authorities are now responsible for enforcing the standards for

small and medium-sized enterprises. At the same time,

there are discussions about integrating CNA’s enforcement activities with those of the Office of the Attorney

General for Environmental Protection, which prosecutes

environmental violations not related to water.

Rapidly rising water prices are encouraging voluntary

compliance by industry, since companies are allowed to

draw free water to match discharges that meet new standards. Federal tax incentives, including immediate depreciation of environmental investments, also stimulate

voluntary compliance efforts.

Privatization

In 1996, there were 360 municipal water utilities in

Mexico, 207 of them financially autonomous, and the rest

receiving government support.105 Many municipalities

have been having difficulty managing their responsibilities to provide water supply and sewerage services to the

population. The infrastructure was usually built by the

federal government, and local councils have little experience with the technical and financial issues involved.

The Mexican government has chosen to pursue a number of strategies to involve the private sector in the water and wastewater infrastructure markets. These

strategies include integrated concessions, management

contracts, partial concessions, and BOT arrangements.

In the concession schemes, the local government provides a contract to a private operator for the operation of

their entire water system (an integrated concession) or a

portion of the water system (a partial concession). Two

cities—Aguascalientes and Cancún—have adopted integrated concessions. Although there have been a number

of problems, the arrangements in these two cities are seen

as successful. The replicability of these schemes is limited, however, by the uniquely affluent nature of these

two cities.

Under a management contract arrangement, a private

company is paid a fee for meeting improvement or performance benchmarks. This arrangement has proved successful in a number of cities including Mexico City and

Puebla. Management contract schemes are likely to be

implemented in other large cities and constitute an opportunity for U.S. firms with experience in water system

management or that sell efficiency-enhancing equipment,

services, or software.

The government has opted to involve the private sector through BOT projects in a number of areas. The Water Law of 1992 sets out guidelines for private sector

participation in water supply projects in Mexico. However, the high capital costs and the risks of collecting

water and wastewater fees from financially troubled municipalities have made the envisioned wide-scale implementation of the BOT program difficult. Out of 40 BOT

projects planned in 1993, only eight were operational in

1998.106

The federal government in most cases cannot step in

to help assure private investor repayment. Water utilities

that can show a strong balance sheet (only an estimated

10 percent of them can), or projects which by themselves

can demonstrate a low level of commercial risk, are eligible to benefit from the Public Works and Services Bank

revolving contingency fund. This fund has been used to

absorb some of the commercial risk associated with shortterm municipal failure-to-pay. The mechanism, though

limited, has been indispensable in closing financing for

most municipal BOT wastewater projects. Projects with

access to international funding are clearly the most attractive to investors and equipment suppliers.

The shortage of funds is causing a trend toward regional projects that would cover the needs of more than

one municipality. The state governments are also encouraging the integration of water supply and wastewater

treatment projects under one BOT scheme.

Trade and Investment Policy

Mexico’s trade policy toward the U.S. has been influenced by the requirements of NAFTA, which was enacted in 1994. NAFTA continues to be a key factor in

boosting Mexico’s imports and raising its overall level

of economic activity, as well as spurring competitiveness

and institutional reform. To comply with NAFTA requirements, Mexico has further lowered its tariffs on goods

originating in the United States and Canada. Mexican 104. Mexico Environmental Technologies Export Market Plan, U.S.

Department of Commerce, International Trade Administration, 2001.

105. The Environmental Market in Mexico, Canada, Department of

Foreign Affairs and International Trade, 2000. 106. Ibid.
52 U.S. Department of Commerce, International Trade Administration

tariffs on U.S. goods are now between 0 and 10 percent

of value. Eighty-five percent of U.S. goods now enter

Mexico duty-free. Additionally, Mexico has abolished its

import licensing requirements for most goods that originate in the United States.

The 1993 foreign investment law has opened more

areas of the economy to foreign ownership. It has also

provided national treatment for most foreign investment,

eliminated all performance requirements for foreign investment projects, and liberalized criteria for automatic

approval of foreign investment proposals.

Since Mexico is a neighboring country, it is a natural

market for U.S. companies. U.S. exporters have a great

competitive advantage in Mexico due to the political,

economic, and cultural ties between the two countries.

Underlying the strong U.S. position is also a genuine respect for and interest in U.S. products and companies.

Mexico largely embraces U.S. standards, business practices, and consumer styles. In 1997, Mexico overtook

Japan as the second-largest importer of U.S. goods, second only to Canada. In 1999, the United States accounted

for 74 percent of Mexico’s imports.107

U.S. Market Share and Competition

The demand for water and wastewater equipment and

services from U.S. firms is expected to grow at an annual rate of about 14 percent in the short term. U.S. imports in this market equaled $1.4 billion in 2000,108 with

an import market share of up to 70 percent, depending

on the market segment (see Figure 4.4). U.S. firms have

a natural competitive advantage in the Mexican market

due to geographic proximity, U.S. bilateral aid, the free

trade regime under NAFTA, and the established reputation of U.S. products. Other imports come mainly from

Japan (which has recently been increasing its market

share), Germany, France, and the United Kingdom.

Local production accounts for about 20 percent of the

total market. Mexico has over 350 local manufacturers

of water and wastewater equipment, 95 percent of which

are small and medium-sized companies. However, Mexican companies produce only basic water equipment. The

most common problems faced by domestic manufacturers are low-scale production, high costs, and obsolete

technology.

Market Opportunities

Opportunities exist at all levels for U.S. companies in

the Mexican water and wastewater market. Table 4.8

identifies some of the market opportunities in Mexico.

The Mexican government actively supports water and

wastewater projects. The federal government designed

the National Program for Potable Water and Sewerage

107.FY 2001 Country Commercial Guide: Mexico, U.S. and Foreign

Commercial Service and U.S. Department of State, 2000.

108. Ibid.

Sources: U.S. and Foreign Commercial Service and U.S. Department of State, Potable Water Resource Equipment (Washington, D.C., 1998);

and ibid., Industrial Wastewater Treatment and Recycling Equipment (Washington, D.C., 1997).

Figure 4.4. Import Market Shares for Water and Wastewater Technologies in Mexico

United States

70%

Japan

10%

United

Kingdom

8%

France

7%

Other

5%

United States

67%

Japan

10%

Germany

8%

France

3%

Other

12%

Water Supply Wastewater Treatment
Water and Wastewater Export Market Plan 53

in Urban Zones (APAZU) to support local water utilities

in improving their services. The program provides matching funds to improve administrative, financial, and operational efficiency, and to upgrade infrastructure. CNA

has plans to invite private companies to build and/or

modernize municipal wastewater treatment plants under

the BOT scheme in the states of Guerrero, Veracruz, San

Luis Potosí, Puebla, Tlaxcala, Hidalgo, and Michoacan.

CNA also has projects to modernize the potable water

distribution and sewage systems in the cities of Pachuca,

San Luis Potosí, Huatulco, Acapulco, Cancún, Tabasco,

and Hermosillo, among others.

Companies specializing in water utility operations may

have opportunities through APAZU and other funding

programs to help Mexican water utilities improve their

efficiency, a top federal priority. Some of the principal

competition here will come from low-cost, sole proprietors that operate in the Mexican water utility market.

BOT projects are also a good market for U.S. engineering firms.

The municipal water supply and wastewater treatment

market presents the biggest export opportunities for U.S.

firms in Mexico. Private participation in the provision

of potable water and sewerage is expected to grow as

states and municipalities seek efficiency gains and to attract private capital.

At least 100 tenders are planned for the next five to

10 years to renovate and repair the existing drinking water distribution infrastructure in major cities, as well as

to build or upgrade over 50 water or wastewater treatment plants.109 It is important to note, however, that the

planned construction of wastewater treatment facilities

under BOT arrangements has been slow as the cost of

this infrastructure exceeds many local communities’ capacity to pay.

Under the present regulatory regime, most new municipal wastewater plants will now emphasize primary

treatment with some exceptions, such as plants discharging into international waters on the border with the United

States. Because primary treatment generally requires

fewer imported components and expertise, most U.S.

project developers and equipment suppliers should develop new strategies to add value in the wastewater treatment market. One such strategy includes targeting for

treatment the substantial volumes of sludge that these

treatment plants are likely to generate.

The best prospects for municipal water and wastewater treatment equipment include chlorinators, chlorine

diffusers, chlorine contact chambers, mixed sludge

pumps, primary clarifiers, PVC pipes, water meters, water filtration equipment, water pumps, valves, and water

leak detectors.

A number of U.S. and international agencies have

sponsored water and wastewater projects in Mexico.

These include the U.S. Environmental Protection Agency

(EPA), the U.S. Geological Service, the World Bank,

NADBank, and the Border Environment Cooperation

Commission (BECC).110 The U.S. EPA, NADBank, and

BECC are making substantial investments in water supply and wastewater treatment infrastructure projects along

the U.S.-Mexico border. These projects, and others along

the border, are good possibilities for U.S. companies.

EPA is represented on both the NADBank and the

BECC’s board of directors and is the primary source of

construction grants for the projects. EPA grants are used

to supplement funding for projects which cannot be completely financed by NADBank, state or local governments, or the private sector. The United States expects

to provide $700 million in federal grants for water and

wastewater infrastructure construction between 1995 and

2005; Mexico also provides significant grants. There are

currently over a dozen NADBank water/wastewater

projects in the U.S.-Mexico border area, with a total value

of $400 million.

The industrial sector offers extremely good market

opportunities for U.S. technology and services companies, particularly in wastewater treatment. This market

is driven in large part by the need to comply with the

Table 4.8. Market Opportunities for U.S. Companies in Mexico

Level of Government Type of Market Opportunities

Federal–National Water Commission (CNA) Technology for water well drilling, water reinjection systems, emergency

response, and water monitoring services

Municipal and State Level Pumping stations, water networks, water metering, billing and collection

systems, wastewater treatment, equipment maintenance, and potablization plants.

Source: Mexico Environmental Technologies Export Market Plan, U.S. Department of Commerce, International Trade Administration, 2001.

110. BECC funds feasibility studies, assists in infrastructure design,

and consults on the planning process. To secure BECC certification,

a project must fulfill financial, political, sustainability, and technical

criteria. NADBank works with a variety of project funding sources to

assemble a finance package for each project certified by the BECC.

109. Environmental Market in Mexico, Canada, Department of Foreign Affairs and International Trade, 2000.
54 U.S. Department of Commerce, International Trade Administration

111. Lee Boug Young, Water Korea (on the Internet at http://

my.netian.com/~watopia/index.html ).

112. Projects in 2001, Ministry of Environment, Republic of Korea,

2001 (www.me.go.kr/english/newindex.html).

113. Rivers and Reservoirs Clean-Up Project in Korea, U.S. Department of Commerce, International Trade Administration, 1999.

new effluent standards. At the outset, the new standards

will apply only to larger firms, but voluntary compliance

is beginning to drive the demand from smaller scale operations. Many industrial parks or groups of smaller companies seek to install common treatment facilities to share

design, construction, and maintenance costs. The largest

demand exists in the sugar, beverage, petroleum, petrochemical, chemical, iron and steel, food processing, pulp

and paper, and textile industries.

A number of constraints affect U.S. participation in

the market for industrial wastewater treatment. The cost

of capital remains high in Mexico, and many industrial

customers are looking for relatively inexpensive shortterm solutions. Equipment that can be retrofitted to existing production systems is generally preferable to

equipment that requires re-engineered technological processes. The best opportunities in industrial wastewater

treatment are for ion exchangers, reverse osmosis modules, analyzers, chemical purifiers, automatic control instrumentation, etc.

In addition, systems designed for use in the United

States tend to be engineered to minimize the number of

required operators or technicians. This important selling

point in the United States may hinder sales in Mexico.

For one, many water utilities and industrial facilities in

Mexico are more comfortable operating treatment plants

manually instead of using sophisticated, automated systems, and believe that manual operation is a less expensive approach given Mexico’s low labor costs. U.S. firms

must assess the degree to which their systems can be

adapted to substitute labor for capital intensity, as well

as educate their Mexican clients on the benefits of applying advanced, labor-reducing technologies.

Many companies also seek firms that can demonstrate

technology performance under Mexican conditions. This

is the result of Mexican clients’ unwillingness to accept

perceived technology risk. Some foreign firms address

this issue by initially accepting low profit margins in order to establish a track record in Mexico.

Finally, finding industrial wastewater treatment

projects can be difficult. One strategy to circumvent this

problem is to be in constant communication with chambers of commerce, associations, and industrial groups in

Mexico.

Republic of Korea (South Korea)

Population: 47 million (2000)

Urban population: 82 percent (2000)

GNP per capita: $8,490 (1999)

GDP average annual growth rate: 6.1 percent (1990–1998)

Water supply coverage (urban/rural): 97 percent/

71 percent (2000)

Sanitation coverage (urban/rural): 76 percent/

4 percent (2000)

Market Overview

South Korea has made a substantial effort to provide

adequate, clean water for its population. However, water

resources remain at risk in terms of quantity and quality.

With further urbanization and industrialization, the demand for water is on the rise. Many conventional water

sources have already been tapped and the main water

sources are becoming increasingly contaminated. The

growing disparity between water supply and demand is

likely to lead to more frequent, more prolonged, and more

severe water shortages. South Korea’s anticipated water

deficit will grow substantially over the next 10 years from

702 to 2,011 million m3 per year. On average, 28 percent

of South Korea’s water is unaccounted for, due to unauthorized use and distribution system losses.111

Only 68 percent of municipal sewage is treated. To

bring this rate up to 80 percent in 2005, the South Korean government has committed to expanding basic water treatment facilities and enhancing the management

methods. In 2001 alone, the government will construct

30 wastewater treatment facilities and 4,000 km of new

pipeline at a value of $2.1 billion.112

The South Korean government is currently implementing a plan to clean up the four major river basins in Korea: the Han River, the Keum River, the Youngsan River,

and the Nakdong River. The Four River Basin Project’s

objective is to improve ambient water quality to make

the rivers suitable to serve as drinking water sources. The

project includes the construction of 199 new wastewater

treatment plants worth a total of $8.8 billion in investments by 2005.113

The demand for water and wastewater technologies

in South Korea went down briefly as a result of the 1997-

1998 economic crisis but recovered quickly due to the

successful large-scale corporate restructuring and the introduction of government incentives for foreign investment in South Korea.

The U.S. State Department estimates that the market

size of South Korea’s water pollution control sector in
Water and Wastewater Export Market Plan 55

2000 was $3.4 billion.114 Government spending on water and wastewater is another indicator of market size.

In 1999, for example, the South Korean government budgeted approximately $500 million for water and wastewater infrastructure improvements, including $200

million for water treatment and $300 million for wastewater treatment.115

Regulatory and Institutional Framework

Several ministries and agencies in South Korea are involved in water and wastewater issues. The Ministry of

Environment administers the Water Supply Act, the Sewerage Act, the Water Quality Preservation Act (which

regulates industrial effluents), and the Environmental

Policy Act, and is responsible for regulating, monitoring, and enforcing water quality control. The Ministry

of Construction and Transportation and the state-owned

Korea Water Resources Corporation (KOWACO) play

the lead roles in water resources development and management, and infrastructure project implementation. Local governments have the responsibility to provide water

and wastewater services to the population. At the same

time, many other Korean agencies have overlapping water pollution control responsibilities, resulting in significant management inefficiencies.

Among the Ministry of the Environment’s major objectives for 2001 are the establishment of a drinking water demand management system and comprehensive

water pollution control programs. The Ministry’s activities will include:

 The establishment of mandatory water demand

management practices for water suppliers (for local

governments and KOWACO) and every public

institution;

 The introduction of water-saving companies to

promote the use of water conservation and water

recycling equipment;

 The promulgation of more stringent water quality

standards; and

 The enactment and implementation of special

management laws for each of the four main river

basins, including more stringent effluent regulations

and rigorous water monitoring systems.116

Privatization

South Korea is beginning to undertake privatization

of the water industry. South Korea’s privatization plans

were first formulated in 1995. The government hopes that

privatization will reduce the financial burden on central

and local governments, accelerate the completion of water and wastewater infrastructure projects, promote the

reform of local governments’ ineffective management

systems, trim payrolls, and introduce the latest environmental technologies and services to South Korea.

Municipal water and wastewater utilities will mostly

be privatized under a BOT system and will be eventually returned to the South Korean government. Presently,

a portion of the water systems controlled by KOWACO

are managed by private operators under franchise

agreements.117

Trade and Investment Policy

In line with its multilateral trade and other commitments, including those with international financial institutions, South Korea has undertaken changes in its trade

policy framework. Import tariff rates have been adjusted

in accordance with South Korea’s binding WTO commitments. Presently, import duties for pollution control

equipment are at about 6 percent. Efforts have also been

made to streamline customs clearance procedures by,

among others, introducing an immediate release system

and the progressive introduction of an electronic clearance system.

In addition to advance implementation of the WTO

agreement on trade-related aspects of intellectual property rights, protection of such rights has been strengthened by new treaties, increased international cooperation,

and stricter enforcement. The 1998 Foreign Investment

Promotion Act has opened 99 percent of industrial sectors to foreign investment, simplified administrative procedures, and expanded tax incentives for high-technology

investments. Trade and foreign investment liberalization

has also contributed to intensified competition in the domestic market.

The United States is one of South Korea’s main trading partners (in addition to the European Union and Japan). In fact, South Korea is the United States’

sixth-largest export market, bigger than those of Australia, Brazil, China, France, or Italy. U.S. exports to South

Korea are increasing and are expected to continue to show

double-digit growth. The European Union is the main

competitor in this market and has overtaken the United

114. FY 2001 Country Commercial Guide: Korea, U.S. Foreign and

Commercial Service and U.S. Department of State, 2000.

115. Environmental Market Outlook for Korea, U.S. Department of

Commerce, International Trade Administration, 2000.

116. Projects in 2001, Ministry of Environment, Republic of Korea,

2001 (www.me.go.kr/english/newindex.html ).

117. Rivers and Reservoirs Clean-Up Project in Korea, U.S. Department of Commerce, International Trade Administration, 1999.
56 U.S. Department of Commerce, International Trade Administration

120. Goals and Strategies for Providing Clean Water, Ministry of

Environment, Republic of Korea, 2000 (www.me.go.kr/english/sub/

c1_1.htm).

121. Rivers and Reservoirs Clean-Up Project in Korea, U.S. Department of Commerce, International Trade Administration, 1999.

122. World Bank, World Development Indicators(Washington, D.C.:

World Bank, 2000).

States as South Korea’s largest investor.118 Although there

is no bilateral trade agreement between the United States

and South Korea presently, both parties have been working toward crafting one.

U.S. Market Share and Competition

Local manufacturing accounts for 60 percent of South

Korea’s water and wastewater market. Almost all municipal water and wastewater treatment projects in South

Korea have been awarded to large local environmental

engineering and construction companies, many of which

are affiliated with such large industrial conglomerates as

Hyundai, Samsung, Sunkyoung, Ssangyong, Halla, and

Lotte. However, in order to be competitive, South Korean companies need state-of-the-art technology, much

of which is offered by U.S. suppliers.

Some South Korean companies invest in the development of cutting-edge technologies (for example, Keumho

Construction has invested $2 million to design a highefficiency wastewater treatment process) and often look

for joint venture partners to leverage their capacity. These

joint ventures offer excellent opportunities for U.S. companies and provide a source of superior technology for

South Korean projects. It is important to note, however,

that the South Korean government is investing heavily

in the growth of its own environmental technology industry. Eventually, even a larger share of market demand

will be met domestically. For now, however, U.S. companies can still play a large role in the South Korean water and wastewater market.

Currently, the U.S. share of the South Korean environmental market is 20 percent.119 The information on

the U.S. share of the water and wastewater market was

unavailable at the time of this writing.

International reputation, reliability, and price are the

most important factors in government procurement decisions for municipal projects in South Korea. Product

specifications are determined by the state-run Environmental Management Corporation, and the equipment is

purchased through the Supply Administration of the Republic of South Korea.

Market Opportunities

In 1996, the South Korean government established

comprehensive measures for water quality management.

Under these measures, the government will invest $23.8

billion in the construction of municipal wastewater treatment facilities by 2005 and $51.8 billion in the water supply infrastructure by 2011.120

The Four River Basin Project offers abundant opportunities related to large infrastructure projects. Its

Nakdong River clean-up includes $52.3 million for the

construction of new sewage treatment plants, $114.3 million for municipal wastewater treatment upgrades, and

$93.9 million for the rehabilitation of the sewerage network in the Taegu metropolitan area. The Youngsan River

clean-up includes the construction of 37 new municipal

wastewater treatment plants worth $1.5 billion in the

Kwangju metropolitan area. Under the Keum River cleanup, the government will finance the construction of 25

municipal and 10 industrial wastewater treatment plants.

Finally, the Han River and Paldang Reservoir component will pay for the construction of sewage treatment

facilities in rural areas ($739 million) and industrial effluent treatment plants at local industrial estates ($467

million). And these are just the main line items of the

Four River Basin Project.121

The best market opportunities for U.S. water and

wastewater equipment companies in South Korea include

the export of advanced wastewater treatment processes

and technologies, water recycling technology, and other

areas of advanced technology.

Saudi Arabia

Population: 22 million (2000)

Urban population: 86 percent (2000)

GNP per capita: $6,910 (1998)122

GDP average annual growth rate 1.6 percent (1990–1998)

Water supply coverage (urban/rural): 100 percent/

64 percent (2000)

Sanitation coverage (urban/rural): 98 percent/

91 percent (2000)

Market Overview

Saudi Arabia is an arid country with severe climate

conditions and an absence of natural fresh water resources

as well as high population growth, rapid urbanization,

industrialization, and agricultural development, all of

which make water one of the country’s most precious

resources. The World Bank estimated that in 2000, Saudi

118. FY 2001 Country Commercial Guide: Korea, U.S. Foreign and

Commercial Service and U.S. Department of State, 2000.

119. Ibid.
Water and Wastewater Export Market Plan 57

Arabia’s water demand was five times the amount of

available resources.123

Desalination is the largest market segment in the

country’s water sector. Saudi Arabia relies on desalination to help meet the large demand for water and has become the world’s largest producer of desalinated water,

representing 30 percent of the world’s capacity.

Desalinated water accounts for roughly 30 percent of

Saudi Arabia’s water supply. Currently, the country operates 25 desalination plants located at 15 major sites.

Expenditures on desalination projects exceeded $6 billion during the Sixth Plan (1995-2000). The total desalination capacity was expected to reach 800 million gallons

per day by the end of the year 2000.124

Saudi Arabia currently uses four major desalination

processes: multi-stage flash evaporation, reverse osmosis, electrodialysis, and vapor compression. The evaporation process is used at more than 90 percent of the

desalination plants.

In 1998, the total market for desalination equipment

in Saudi Arabia amounted to $357 million (the import

market is 85 percent of the total) and was growing by 5

percent annually.125

Saudi Arabia’s low supply of water resources has also

created a significant demand for wastewater treatment

equipment and services. The total volume of wastewater

generated in Saudi Arabia is 4 million tons per day, of

which only 30 percent is treated.126 It is estimated that

40 percent of municipal sewage could be recycled after

treatment.

Regulatory and Institutional Framework

The principal agency involved in Saudi Arabia’s environmental policy development is the Ministry of Defense and Aviation, which includes the Meteorological

and Environmental Protection Agency. This agency is

responsible for the design of environmental regulations

and enforcing compliance. It also administers the Environmental Protection Standards (1989), including effluent standards and reporting requirements for industry.

New plants must use the best available technology to

control their effluents.

The agency’s enforcement tool is to inform sectoral

licensing agencies about environmental violations and

request the suspension of the violators’ operating licenses.

At the same time, its effectiveness as an enforcement

agency is hampered by its position within the Ministry

of Defense and Aviation (the country’s largest and most

powerful ministry), where environmental issues are not

a priority.

The other two important national agencies in the water sector are the Ministry of Agriculture and Water and

the Ministry of Municipal and Rural Development. Local governments are responsible for water resources management within their jurisdictions. However, they are

typically more concerned about economic growth than

resource conservation.

The Saline Water Conversion Corporation (SWCC) is

the sole government entity responsible for desalination

projects under construction and the expansion of desalination plants.

Privatization

The Saudi Arabian leadership has embarked on a comprehensive restructuring of the entire Saudi economy.

Annual population growth rates of over 3 percent,

coupled with depressed levels of foreign investment, have

led the government to place strong new emphasis on private sector expansion. Although desalination as well as

municipal water and wastewater treatment are presently

entirely in the government’s hands, this is likely to change

in the near future. Given the fall in oil prices over the

last decade and the corresponding drop in government

revenues, the Saudi private sector is likely to gradually

take over the construction, operation, and maintenance

of water desalination projects on a BOT basis.

Trade and Investment Policy

Saudi Arabia’s Council of Ministers recently approved

a new Foreign Direct Investment Code, which establishes

a framework for future legislative and regulatory activities aimed at enhancing the country’s investment climate.

It permits foreign investment in all but a few sectors and

relaxes rules restricting foreign ownership of local businesses. The Council of Ministers also approved the establishment of the Saudi Arabian General Investment

Authority to provide information and assistance to foreign investors.

Saudi Arabia is currently in the process of accession

to the WTO. Once the country is admitted, its trade regime (currently plagued with regulatory and bureaucratic

barriers) should become more transparent and accommodating to foreign businesses.

There are no restrictions on the import of water equipment into Saudi Arabia, although it is subject to a 12 per123. The Water, Wastewater and Desalination Market in Saudi Arabia,

Canada, Department of Foreign Affairs and International Trade, 1997.

124. “Saudi Arabia: Desalination Industry,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of

State, 1999.

125. Ibid.

126. The Water, Wastewater and Desalination Market in Saudi Arabia,

Canada, Department of Foreign Affairs and International Trade, 1997.
58 U.S. Department of Commerce, International Trade Administration

127. The Water, Wastewater and Desalination Market in Saudi Arabia,

Canada, Department of Foreign Affairs and International Trade, 1997.

cent tariff. Items manufactured locally are usually granted

protection by raising the duty on similar imported items

to 20 percent. All desalination equipment items and parts

are exempted from any tariff duty if they are imported

by or for plants run by the SWCC.

Although exporters are not required to appoint a local

Saudi Arabian agent to sell to local companies, commercial regulations restrict importing and direct commercial

marketing to wholly owned Saudi Arabian companies.

In practice, local agents are a requirement. Agent/distributor relations are the responsibility of Saudi Arabia’s Ministry of Commerce.

Direct marketing does not play a large role in Saudi

Arabia. Many forms of Western advertising are unacceptable due to Islamic religious beliefs and practices. Instead, personal relationships between buyers and sellers

play a much stronger role in export success.

U.S. Market Share and Competition

The demand for increased desalination capacity generates tough competition between Saudi firms and foreign companies from Japan, the United States, Korea,

Germany, and Italy.

Local production of water equipment is minimal in

Saudi Arabia, accounting for about $5 million annually.

For instance, about 98 percent of pumps, valves, and compressors are imported.127 However, domestic firms

receive preferential treatment and are becoming more

competitive as they increase their involvement in the

market.

Domestically, five plants manufacture filters, pipes,

treatment chemicals, sterilization units, and membranes

used mainly in reverse osmosis systems. Two Saudi companies, Al-Kawther and Metito, are the most advanced

in the design, manufacture, and commissioning of reverse

osmosis plants in the country.

More than 30 foreign companies are active in Saudi

Arabia’s desalination industry. In 1998, U.S. firms had a

16 percent share of the import market for desalination

equipment (see Figure 4.5). U.S. assistance to the SWCC

resulted in a better understanding of various desalination

techniques used in the United States and how these techniques could be applicable to Saudi needs. U.S. companies dominate the Saudi market for reverse osmosis

technology. U.S. firms have also supplied turbines, boilers, and generators for many multi-stage flash evaporation plants, although as of 1999, only two U.S. companies

(Riley-Beaird and IHI) were prequalified with SWCC to

supply multi-stage flash evaporation systems.

Both European and Japanese companies provide comprehensive work guarantees to the SWCC. U.S. firms,

on the other hand, typically provide only manufacturer

warranties for installed equipment, thereby reducing their

competitiveness. Moreover, European and Japanese firms

outnumber U.S. companies on the list of prequalified

firms. Since many of the Saudi desalination plants were

built by Japanese and European firms, most of the equipment and materials is sourced accordingly. Japanese,

German, and Swiss consultants are major players in this

industry, recommending specifications that favor companies from their countries.

The Saudi government follows a long-standing policy

of encouraging locally made products and services.

Therefore, a good way for new firms to enter the market

is by establishing joint ventures with reputable Saudi

companies. Since all desalination plants are built on

a “turnkey basis,” preference is usually given to

prequalified foreign bidders having a business relationship with a Saudi company. Saudi regulations require any

foreign company that obtains a contract with the government to appoint a Saudi service agent.

Market Opportunities

Desalination capacity development will remain a priority of the Saudi government for generations to come.

Investment by the SWCC is expected to bring the production capacity to 1.3 billion gallons per day by the year

Figure 4.5. Import Market Shares for Desalination

Equipment in Saudi Arabia

Japan

38%

United States

16%

Germany

15%

South

Korea

14%

Italy

11%

Other

6%

Source: Canada, Department of Foreign Affairs and International

Trade, The Water, Wastewater and Desalination Market in Saudi

Arabia, (Ottawa, 1997).
Water and Wastewater Export Market Plan 59

2010.128 New desalination projects are directed toward

reducing the cost of desalinated water through the optimization of chemical consumption and design and process improvements.

Given that most desalination plants in Saudi Arabia

use the multi-stage flash evaporation system (SWCC officials believe that the process works very well and requires less maintenance than reverse osmosis systems),

ample opportunities exist for sales and service of turbines,

boilers, generators, and anti-scaling chemicals. Membranes, filters, and treatment chemicals will be also be

in demand, especially at reverse osmosis installations.

New technology that reduces both construction and production costs will also do well in the Saudi market. After-sale service and maintenance are usually key

components of any turnkey contract with the SWCC.

As water becomes increasingly expensive in Saudi

Arabia, Saudi industries seeking to improve their bottom line will also present opportunities for U.S. exporters of water conservation technologies.

Spain

Population: 40 million (2000)

Urban population: 78 percent (2000)

GNP per capita: $14,000 (1999)

GDP average annual growth rate: 1.9 percent (1990–1998)

Water supply coverage (total): 91 percent (1998)129

Sanitation coverage (total): 60 percent (1998)130

Market Overview

In the 1990s, almost all Spanish municipalities with

more than 20,000 inhabitants had a sewer system, but

only 60 percent of all wastewater was treated. In 1997,

15 percent of households were served by primary treatment plants only, while 44 percent were connected to

secondary municipal wastewater treatment plants.131

Although significant progress has been made over the

past two decades in building new municipal sewage treatment plans, the installed capacity, particularly in rural

areas, needs to be enhanced considerably. Industrial

wastewater treatment is often inadequate, with direct discharges polluting coastal waters, and indirect discharges

damaging municipal sewerage infrastructure. The main

water-polluting industries include chemical, power, steel

and non-ferrous metallurgy, textiles, and construction.

Drinking water shortages are one of Spain’s top environmental priorities. Water resources are severely depleted, and the deficit is made up through the overuse of

aquifers. The problem is particularly acute in the Canary

Islands, Balearic Region, Costa del Sol, Almería, Murcia,

and Alicante regions. The growing water shortages create a demand for water desalination projects. Spain currently has the greatest desalination capacity in Europe,

most of it represented by reverse osmosis technology.

The size of Spain’s water and wastewater market is

estimated at about $4 billion annually. The Ministry of

Environment estimates that the National Sewerage and

Wastewater Treatment Plan (1995–2005) will require a

total investment of $14 billion, with more than 50 percent of this amount invested in new wastewater treatment

plants and just over 40 percent used to expand sewerage

networks. Spain’s central government is expected to contribute about a quarter of this amount.132

Regulatory and Institutional Framework

EU Directive 91/271 on wastewater treatment is the

single most important regulation affecting investment in

municipal sewerage infrastructure in Spain. According

to the Directive, all communities with populations of

more than 15,000 residents had to have fully functioning wastewater collection and treatment systems by the

year 2000, and all smaller communities by 2005.

Spain’s Water Law requires industrial and municipal

polluters to pay effluent fees for direct discharges into

surface waters. The Directorate-General of Hydraulic

Works and Water Quality sets the charge structure and

level (based on effluent parameters and rates per unit),

which are applied by local drainage basin authorities.

Municipalities are responsible for drinking water supply and wastewater treatment. They also administer licenses for industrial discharges into municipal sewer

systems. Indirect discharges are subject to service fees

that sometimes take into account pollutant concentrations,

but most often are volume-based. Fines for noncompliance with pretreatment standards range from $10,000 to

$100,000. 128. “Saudi Arabia: Desalination Industry,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of

State, 1999.

129. Spain: Environmental Technologies, Market Brief, Showcase

Europe (www.sce.doc.gov), U.S. Department of Commerce, International Trade Administration, 1998.

130. Ibid.

131. The Water, Wastewater and Desalination Market in Spain,

Canada, Department of Foreign Affairs and International Trade, 1998.

132. Spain Environmental Technologies Export Market Plan, U.S.

Department of Commerce, International Trade Administration, 1998.
60 U.S. Department of Commerce, International Trade Administration

134. The Water, Wastewater and Desalination Market in Spain,

Canada, Department of Foreign Affairs and International Trade, 1998.

135. All the presented general statistical data for Taiwan has been

taken from the Taiwan Monthly Bulletin of Statistics, Taiwan’s Directorate General of Budget, Accounting, and Statistics, 2001.

Privatization

Urban water and wastewater services in Spain have

traditionally been provided by a mix of public and private institutions. In water supply, public entities deliver

72 percent of water, private enterprises 26 percent, and

mixed ownership companies the remaining 2 percent. The

role of the private sector has become more prominent in

recent years with the influx of foreign water companies

into the Spanish market. Private water management systems are more common in larger municipalities. About

87 percent of wastewater utilities are managed directly

by municipalities, with private companies playing a much

smaller role.

Trade and Investment Policy

Spanish import duties are equal to the Common Market External Tariff for non-EU goods, while there are no

duties imposed on products imported from within the EU,

giving EU suppliers a significant price advantage. In addition, water and wastewater equipment must be certified to meet EU environmental standards. There are no

barriers to foreign investment in Spain.

U.S. Market Share and Competition

About 90 companies, of which 70 are public, control

the water sector in Spain. Local production meets about

three-quarters of the market demand.133 Several Spanish

companies manufacture water and wastewater equipment,

producing mostly pumps, turbines, filters, and chemicals.

However, specialized and high technology equipment is

mostly imported. Imports also play an important role in

the desalination market segment.

The primary competitors for U.S. companies are

French and British firms. Vivendi and ONDEO have been

particularly successful in Spain. Vivendi operates in Spain

under the trade name Sociedad Mediterranea de Agua and

has acquired a large share of private business in the sector. ONDEO is a partner in the Aguas de Barcelona consortium which has been expanding rapidly over the last

several years.

Leading banking institutions, as well as former stateowned companies that were recently privatized, electric

utilities, as well as other Spanish firms, have been organizing joint ventures and consortia to bid for water contracts. The best way for U.S. equipment suppliers to enter

the Spanish market is to enter such joint ventures.

Market Opportunities

Market opportunities are expected to focus on the expansion of existing sewerage networks, with smaller communities connecting their sewer systems with larger

municipalities in an effort to cut costs. Close to 3,200

wastewater treatment plants need upgrading to meet the

requirements of the EU Directive, requiring an investment estimated at about $1.4 billion until 2005.134 Investment is expected to be concentrated around coastal

areas and smaller inland population centers.

The following is a list of water and wastewater projects

in Spain launched with financial support from the European Investment Bank in the last three years:

 Improvements to wastewater collection and treatment facilities in the Catalonia Region ($90.1

million);

 Improvements to water supply infrastructure and

forestry development in Castilla and León ($33.5

million);

 Construction and extension of the wastewater

treatment system on Balearic Islands ($13.5 million);

 Improvements to wastewater collection and treatment facilities in the Valencia Region ($42.0 million); and

 Improvements to road, drinking water supply, and

wastewater collection and treatment infrastructure in

the autonomous region of Extremadura ($48.1

million).

The best sales prospects for U.S. water and wastewater equipment exporters include meters, reverse osmosis

equipment for desalination plants, membranes, and control instrumentation.

Taiwan

Population: 22 million (2000)135

Urban population: not available

GNP per capita: $13,535 (1999)

GDP average annual growth rate: 7.6 percent (1990–1998)

Water supply coverage (urban/rural): not available

Sanitation coverage (urban/rural): 36 percent/

18 percent (2000)

133. FY 2001 Country Commercial Guide: Spain, U.S. and Foreign

Commercial Service and U.S. Department of State, 2000.
Water and Wastewater Export Market Plan 61

Market Overview

Taiwan’s rivers serve as the primary source of drinking water for over three-quarters of the country’s population. About 40 percent of surface waters in Taiwan are

categorized by the government as polluted. Domestic

sewage, industrial effluents, and livestock wastes account

for 43 percent, 32 percent, and 25 percent of water pollution load, respectively.136

The total water and wastewater market in Taiwan was

estimated at $1.9 billion in 1999, with imports responsible for nearly 75 percent of the supply ($1.4 billion).137

Regulatory and Institutional Framework

The Water Pollution Control Act and the Drinking

Water Management Act form the legal foundation for

water management in Taiwan. Under the Water Pollution Control Act, every industrial facility is required to

submit a water pollution control plan to the Taiwan Environmental Protection Agency in order to obtain a mandatory discharge permit. Municipal wastewater treatment

plants are also required to comply with effluent standards.

Effluent standards are based on best available technology and were tightened significantly in 1997. At the same

time, Taiwan strengthened its environmental monitoring

and inspection system to ensure stricter enforcement.

Penalties for violations are significant, up to $30,000 in

fines and imprisonment.

In 1998, Taiwan’s Environmental Protection Agency

introduced wastewater discharge fees for industries, public wastewater utilities, and households. The industrial

effluent fees are based on chemical oxygen demand, suspended solids, and heavy metal content. The fees are being phased in through July 2002.138

The government-owned Taiwan Water Supply Corporation is responsible for large infrastructure development

projects in the country. Local governments operate water and wastewater utilities.

Privatization

Taiwan’s Law for Promotion of Private Participation

in Public Infrastructure Projects (also known as the “BOT

Law”) was promulgated in February 2000. The law provides the basic legal framework for private-sector entities to participate in public infrastructure projects in Taiwan and provides incentives for private participation. The

government is currently designing the first BOT water

infrastructure projects.139

Trade and Investment Policy

There is no import tariff on environmental equipment

in Taiwan. Moreover, Taiwanese companies buying such

equipment are eligible for investment credits and lowinterest loans. Taiwan has long encouraged and facilitated direct foreign investment. Regulations affecting

foreign-invested enterprises are generally transparent and

non-discriminatory.

However, Taiwan’s public procurement practices constitute a significant trade barrier. There is often overt discrimination between local and foreign bidders on

government contracts. Municipal governments in particular have been notably arbitrary in dealing with foreign

contractors. Perhaps the most consistent complaint made

by U.S. companies involves unfair terms and conditions

required by the particular procuring entity. A new government procurement law was enacted in 1999 but will

not be fully applicable to foreign bidders until Taiwan’s

expected accession to WTO.140

U.S. Market Share and Competition

Japan dominates the import market for water and

wastewater technologies with a 34 percent market share,

followed by the United States with 28 percent and Germany with 14 percent (see Figure 4.6). Japanese firms

have historically done very well in this market due to

their strong reputation for after-sale service, high quality, and low price. The geographic proximity and cultural

similarity add to the advantage of Japanese products. To

be successful, U.S. companies need to convince Taiwanese end-users of their ability to offer top quality at a competitive price, while providing reliable local customer

service. The establishment of a partnership with a local

agent is seen as the most effective way to enter the Taiwanese market.

Local firms are expected to play a larger role in the

future, as they gain knowledge and technical expertise

in the field. There are presently about 300 water and

wastewater equipment manufacturers in Taiwan. Most of

them are small and medium-sized companies producing

136. “Taiwan: Water Pollution Prevention Equipment,” Industry Sector Analysis, U.S. and Foreign Commercial Service and U.S. Department of State, 1999.

137. Ibid.

138. Water Pollution Control Fees in Taiwan, U.S. Department of

Commerce, International Trade Administration, 1998.

139. “Taiwan Law for Promotion of Private Participation,” International Market Insight, U.S. and Foreign Commercial Service and U.S.

Department of State, 2000.

140. Taiwan FY 2001 Country Commercial Guide, U.S. and Foreign

Commercial Service and U.S. Department of State, 2000.
62 U.S. Department of Commerce, International Trade Administration

141. The Environmental Products and Services Market in the United

Kingdom, Canada, Department of Foreign Affairs and International

Trade (Ottawa, 2000).

142. The U.K. Environmental Technology Market, U.S. Department

of Commerce, International Trade Administration (Washington, D.C.,

2000).

technologically unsophisticated equipment, including

pumps, blowers, valves, and simple filters.

Market Opportunities

The Taiwanese government is currently implementing an action plan to improve the water quality of

Taiwan’s five major rivers (Five Rivers Project). Over

$1 billion will be spent for the construction of 12 municipal wastewater collection and treatment systems between 1999 and 2006. Size of the plants varies

significantly between projects, ranging from 3,000 cubic meters per day to 120,000 cubic meters per day.

Eighteen water treatment plants will be upgraded in

the near future, eight of them under the Five Rivers

Project. The largest water supply project is the $40 million water treatment plant expansion in Kaohsiung.

The best prospects for U.S. suppliers include advanced

wastewater treatment and recycling technologies, advance oxidation equipment, sophisticated membranes,

heavy metal recovery equipment, etc.

United Kingdom

Population: 59 million (2000)

Urban population: 89 percent (2000)

GNP per capita: $22,640 (1999)

GDP average annual growth rate: 2.2 percent (1990–1998)

Water supply coverage (urban/rural): 100 percent/

100 percent (2000)

Sanitation coverage (urban/rural): 100 percent/

100 percent (2000)

Market Overview

Over the last 10 years, the U.K. water and wastewater

market has been driven by two main factors: the requirement placed upon the privatized utilities (see the

Privatization section) to invest heavily in the delivery of

water and wastewater services; and the impact of increasingly stringent EU water quality regulations.

British water and wastewater companies spend about

$5.5 billion every year on improving water supply and

sewerage services.141 The annual market for water and

wastewater equipment was estimated at $4 billion in

2000, including $1.2 billion in drinking water supply, $2

billion in municipal and industrial wastewater treatment,

and $0.8 billion in water cleanup. The market is growing at about 4 percent per year.142

Regulatory and Institutional Framework

Britain’s water regulations reflect the provisions of the

main EU Directives in this sector. The Drinking Water

Directive (1989) sets drinking water quality standards;

the Bathing Water Directive (1991) establishes coastal

water quality standards, and the Urban Wastewater Directive (1994) stipulates minimum standards for sewerage systems and sewage treatment.

The water and wastewater industry in the United Kingdom is regulated by three main bodies: the Environment

Agency, the Office of Water Services, and the Drinking

Water Inspectorate. The Environment Agency and the

Drinking Water Inspectorate are subordinated to the Department of the Environment, Transport, and the Regions,

whose Water and Land Directorate oversees all waterrelated aspects of environmental policy.

In 1996, the Environment Agency took over the functions of its predecessors, the National Rivers Authority,

Her Majesty’s Inspectorate of Pollution, Waste Regulation Authorities and some sections of the Department of

the Environment. It issues and enforces permits for both

Source: U.S. and Foreign Commercial Service and U.S. Department

of State, Industry Sector Analysis; Taiwan: Water Pollution Prevention

Equipment (Washington, D.C., 1999).

Japan

34%

United States

28%

Germany

14%

United

Kingdom

5%

Italy

3%

China

3%

Other

13%

Figure 4.6. Import Market Shares for Water and

Wastewater Equipment in Taiwan
Water and Wastewater Export Market Plan 63

water abstractions and wastewater discharges, and

charges respective fees. It also has monitoring and inspection responsibilities.

The Office of Water Services is an independent economic regulator with a duty to ensure that the water companies carry out and can finance their functions properly.

It protects the interests of consumers, particularly where

tariffs are concerned. It is also charged with facilitating

competition and promoting the efficient use of water. The

Office sets price caps for each company (thereby mandating efficiency savings) for five-year intervals.

The Drinking Water Inspectorate conducts inspections

of water companies to ensure their compliance with the

drinking water and other applicable technology standards.

The Inspectorate investigates incidents that affect water

quality and approves chemicals and materials used in

treating water. New, more stringent drinking water quality standards were promulgated in 2000, with compliance required by the end of 2003.

Privatization

Under the Water Act of 1989, the United Kingdom

restructured its water industry, privatizing all water and

wastewater operations in England and Wales. Major driving forces behind the government’s privatization program

were the lack of separation between the regulator and

the regulated entity, apparent inefficiencies, and the enormous investment needed to improve service and bring

the water and wastewater systems up to EU environmental standards.

Ten integrated water and wastewater companies replaced 10 regional water authorities that had existed since

1974. After the restructuring, 29 smaller statutory water

companies (responsible for water supply only) continued to exist, although that number is now down to 17

due to mergers. Some companies are now owned by foreign firms, including France’s Vivendi (which owns

Three Valleys Water, North Surrey Water, and two other

utilities) and ONDEO (which owns Northumbrian Water and Essex and Suffolk Water). The U.S. firm Azurix

owns Wessex Water. Many U.K. water companies have

diversified into other utility services, and several (for

example, Thames Water, Severn Trent, Anglian Water)

have moved into the global market for water and wastewater services.

Trade and Investment Policy

The United Kingdom is one country where U.S exporters face very few real problems in doing business.

The hurdles common in other countries, including differences in language, culture, legal and business practices, are largely absent.

Most products (including machinery, electrical, and

electronic equipment) imported into the European Union

must comply with the relevant EU standards and demonstrate this conformity by bearing the CE Mark. The

CE Mark is a requirement for affected products regardless of their origin. Moreover, it removes the need to design products to comply with individual national sets of

standards. An EU common external tariff applies to all

non-EU imports.

Procurement by the United Kingdom’s water and

wastewater companies is carried out in a number of ways,

the most important of which are:

 companies use their own lists of approved suppliers;

 companies use commercial lists of pre-qualified/

approved suppliers; or,

 for large contracts, it may be necessary to follow EU

procurement procedures.

U.S. Market Share and Competition

There is strong competition in the British water and

wastewater market for almost every product and service,

with no one company enjoying a dominant position. The

British industry is very strong in municipal water and

wastewater treatment, monitoring, and testing. There are

close links between manufacturers, consultants, and the

water and wastewater companies. At the same time, due

to privatization and the United Kingdom’s EU membership, the competition includes a large and growing number of foreign suppliers. French, German, U.S., and

Japanese companies are the main foreign players in this

market, followed by Canadian and Australian firms. Imports account for about 55 percent of the total market

size.

U.S. companies enjoy a 25 percent import market

share. Demand for most U.S. water and wastewater technologies is strong, with growth rates of 5 percent to 6

percent per year expected in the near term. 143 The experience of foreign companies active in the United Kingdom suggests that the best way to enter this market is to

work with a local partner rather than try to establish a

local presence.144

143. International Business Development Office, State of Utah, 2000

(www.utahtrade.com/KnowledgeCenter/World/countries/Uk/reports/

uk-leading.htm).

144. The Environmental Products and Services Market in the United

Kingdom, Canada, Department of Foreign Affairs and International

Trade (Ottawa, 2000).
64 U.S. Department of Commerce, International Trade Administration

Market Opportunities

British water and wastewater companies plan to invest $20 billion through 2004 to improve the quality and

efficiency of their services. The ambitious 1999-2004

water quality improvement program includes:

 Municipal wastewater treatment improvements

covering 15 million customers;

 Drinking water treatment improvements for 30

million customers to reduce the risk from

cryptosporidium;

 Installation of treatment at water sources supplying

17 million customers to reduce the amount of

dissolved lead from plumbing;

 Rehabilitation of some 22,000 kilometers of water

distribution mains to reduce water losses;

 Installation of secondary treatment for all coastal

discharges in towns with a population of over 2,000

residents.145

This massive program will present many opportunities for U.S. suppliers of water and wastewater technologies and services. Aeration, screening and sludge

dewatering equipment, phosphorus and heavy metal removal, and anaerobic digestion are the products and technologies that offer good prospects for future growth.

145. Ibid.
65

Water and Wastewater Export Market Plan

Albania WB Water Supply and Urgent ● n.a. 10 2000–? World Bank Water PIU in Durres and

Rehabilitation Project Support

Angola WB Luanda Water Supply Project ● n.a. 20 under

preparation n.a.

WB Urban Water Supply and Sanitation ● ● n.a. 20 under

Project preparation National Directorate of Water

Argentina WB Pollution Management Project ● n.a. 18 1998–2003 Secretariat for the Environment

WB Water Sector Reform Project ● n.a. 30 1999–? Secretariat of Public Works

IDB Program in Support of Reform of the ● ● 571 250 1998–2003 National Board of Water and

Water Supply and Sanitation Sector Sanitation Works

Armenia WB Municipal Development Project ● ● n.a. 30 1998–? Municipal governments

WB Municipal Water and Wastewater ● ● n.a. 20 under Armenian water & sewerage

Project preparation companies

Bangladesh WB Dhaka Water Supply Project ● n.a. 80 1996–? DWASA

WB School and Community Sanitation ● n.a. 75 under Department of Public Health and

Project preparation Engineering

Bolivia IDB Basic Sanitation Program for ● 56 40 1999–? Ministry of Housing and Basic

Small Municipalities Services

Bosnia– WB Mostar Water and Sewerage Project ● ● n.a. 12 2000–? Mostar Water Supply

Herzegovina and Sewerage Utility

Brazil IDB Guaiba Watershed Environmental ● ● 221 132 1993–? Secretariat of Planning and

Management Program Administration

IDB Tiete River Cleanup Project, Stage II ● ● 400 2000 1999–2002 Basic Sanitation Company of the

State of Sao Paulo, State Ministry of

Water Resources, Sanitation and

Works, State Environmental

Sanitation Company

Appendix A

Major International Water and Wastewater Projects

Project Financing

Project Components (millions of dollars)

Municipal Municipal Industrial Total Loan/ Project

Water Supply Sewage and Wastewater Proj. Grant Duration

 Country and Treatment Sanitation Treatment Amt. Amt. Status ExecutingAgency

Funding

Agency/

Source Project Title
66 U.S. Department of Commerce, International 

Trade Administration

IDB Federal District Sanitation Program ● ● 260 130 2000–2005 Department of Infrastructure and

Works of the federal district

government

IDB Basic Sanitation Program for the ●● ● 793 350 1993–? State water company

Guanabara Bay Basin ●● ● 793 350 1993–? State water company

IDB São Paulo Drainage Program, Stage II ● 544 302 1994–? n.a.

WB Small Localities Water and ● ● n.a. 150 under SEPURB/Casa Civil

Sanitation Project preparation

WB São Paulo Water Quality and Pollution ● n.a. 245 1992–2002 Secretariats of States

Control Program

WB Federal Water Resources Management ● n.a. 198 1998–2003 Secretariat of Water Resources

Project

WB Bahia Water Resources Management ● ● n.a. 51 1997–2002 SRHSH

Bulgaria EBRD Sofia Water System Concession ● ● 91 32 2000–? Sofijska Voda AD

Burkina Faso WB Water Supply Project (01) ● n.a. 70 under ONEA

preparation

Cambodia WB Urban Water Supply Project ● n.a. 31 1998–? Ministry of Industry, Mines and

Energy

ADB Provincial Towns Improvement Project ● ● 26 20 1999–2005 Ministry of Industry, Mines and

Energy

China ADB Suzhou Creek Rehabilitation ● ● 916 300 1999–2010 Suzhou Creek Rehabilitation and

Construction Co., Ltd.

ADB Tianjin Wastewater Treatment and ● 345 130 1999–2005 n.a.

Water Resources Protection

ADB Fuzhou Water Supply and Wastewater ● ● 192 102 1995–2002 Fuzhou ADB Project Office

Treatment

ADB Zhejiang–Shanxi Water Supply Project ● 518 100 1997–? Shanxi Economic Development

Corporation

WB Hebei Urban Environment Project ●● ● n.a. 150 2000–? Hebei Provincial Government

WB Changing Urban Environment Project ● ● n.a. 200 2000–? Chongqing Municipal Government

WB National Rural Water Supply Project ● n.a. 70 1997–? National Public Health Commission

ADB Mudanjiang Water Supply ● 185 90 1997–? Mudanjiang Linhai General Water

Supply Company

Funding

Agency/

Source Project Title

Project Financing

Project Components (millions of dollars)

Municipal Municipal Industrial Total Loan/ Project

Water Supply Sewage and Wastewater Proj. Grant Duration

 Country and Treatment Sanitation Treatment Amt. Amt. Status ExecutingAgency
67

Water and Wastewater Export Market Plan

WB Liao River Basin Project ● ● n.a. 200 under Liaoning Province

preparation

WB Beijing Environment Project (02) ● ● n.a. 349 2000–2006 Beijing Municipal Government

WB Sichuan Urban Environment Project ● ● n.a. 152 1999–2006 Sichuan Provincial and Municipal

Government

WB Guangxi Urban Environment Project ● ● n.a. 92 1998–2004 Nanning and Guilin

WB Shandong Environment Project ● ● n.a. 95 1997–2003 Shandong Urban and Rural Const.

Com / Env.PR

WB Yunnan Environment Project ● ● n.a. 150 1996–2002 Municipal governments

WB Chongqing Industrial Pollution ● n.a. 170 1996–2002 Chongqing Municipality

Control and Reform Project

Colombia WB Cartegena Water Supply, Sewerage ●● ● n.a. 85 1999–? Aguas de Barcelona

and Environ. Management Project

WB Water Sector Reform Assistance ● n.a. 60 under The Ministry of Economic

Project preparation Development

IDB Medelín River Sanitation Program ● 66 40 2000–? Medellín Public Utility

Croatia WB Municipal Environmental

Infrastructure Project ● ● n.a. 30 1998–? Eko and Split Water Companies

EBRD Rijeka Sewerage and Service Project ● 11 7 1999–? City of Rijeka and Rijeka Water and

Sewerage Company

Dominican WB Wastewater Disposal in Tourism ● ● n.a. 5 2000–? Technical Secretariat

Republic Centers Project of the Presidency

East Timor ADB Water and Sanitation Sector ● ● 10 10 2000–? United Nations Transitional

Rehabilitation Project Administration

Ecuador WB Guayaquil Water and Sewerage ● ● n.a. 35 under n.a.

Management Project preparation

WB Rural and Small City Water Project ● ● n.a. 32 2000–? MIDUVI/SSA

Egypt WB Pollution Abatement Project ● n.a. 35 1997–2003 Egypt Environmental Affairs Agency

USAID Secondary Cities Development ● ● n.a. 215 1994 –2002 Governorates (provincial

governments)

USAID Alexandria Wastewater System, ● n.a. 90 1998–2002 Alexandria General Organization

Expansion II for Sanitary Drainage

Alexandria Drinking Water Initiative ● n.a. 200 1998–2002 Alexandria Water General Authority

USAID Egypt Utilities Management Program ● ● n.a. 215 1997–2004 Economic General Authorities for

Water Supply and Sanitary Drainage

Ethiopia WB Water Supply Development and ● n.a. 36 under AWSA, WSSA

Rehabilitation Project preparation

Republic ADB Suva Nausori Water ● ● 55 42 under Ministry of Communication

of Fiji preparation Works and Energy
68 U.S. Department of Commerce, International 

Trade Administration

Georgia WB Tbilisi Water Supply and ● ● n.a. 25 under Tbilisi Water Utilityr

Sanitation Project preparation

WB Integrated Coastal Management Project ● n.a. 4 1998–2004 Ministry of Environment

Guatemala IDB Rural Water Investment Program ● ● 63 50 under INFOM (Municipal Promotion

preparation Institute)

IDB Program for Sanitation and Sustainable ● ● 40 8 1998–2003 Authority for the Sustainable

Productive Management of the Management of Lake Amatitlan

Amatitlan Lake Watershed

Guinea WB Water Supply and Sanitation Project ● ● n.a. 25 under n.a.

preparation

Honduras IDB Supplement to Potable Water and

Sanitation Investment Program ● ● 22 20 2000–? Ministry of Finance

Hungary WB Municipal Wastewater Project ● n.a. 32 1999–? Municipalities

India WB Industrial Pollution Prevention Project ● n.a. 168 1994–2002 Ministry of Environment

WB Madras Water Supply and ● n.a. 105 under Metrowater and Chennai Municipal

Sanitation Project preparation Corporation

WB Karnataka Rural Water Supply and ● ● n.a. 150 under Government of Karnataka and Tamil

Environmental Sanitation Project preparation Nadu

WB Rural Water Supply and ● ● n.a. 66 2000–2006 Government of Kerala

Environmental Sanitation Project

WB Uttar Pradesh Rural Water Supply and

Environmental Sanitation Project ● ● n.a. 60 1996–2002 n.a.

WB Bombay Sewage Disposal Project ● n.a. 192 1995–2002 Municipal Corp. of Bombay

WB Madras Water Supply Project ● n.a. 276 1995–2002 Metrowater

India ADB Karnataka Urban Development and ● ● 251 175 1999–2004 Karnataka Urban Infrastructure

Coastal Environmental Management Development and Financing

Project Corporation

ADB Rajasthan Urban Infrastructure ● ● 362 250 1998–2004 Urban Development Department

Development

Indonesia ADB Water Supply and Sanitation Sector ● ● 100 100 expected Directorate General of Urban and

2001 Rural Development

Project Financing

Project Components (millions of dollars)

Municipal Municipal Industrial Total Loan/ Project

Water Supply Sewage and Wastewater Proj. Grant Duration

 Country and Treatment Sanitation Treatment Amt. Amt. Status ExecutingAgency

Funding

Agency/

Source Project Title
69

Water and Wastewater Export Market Plan

ADB Capacity Building for Water Supply ● 119 66 1997–? Directorate General of Public

Enterprises for Water Loss Reduction Administration and Regional

Sector Projects Autonomy

Iran WB Tehran Sewerage Project ● n.a. 145 2000–2004 Tehran Sewerage Company

Jamaica IDB Kingston Water and Sanitation ● ● 50 35 under National Water Commission

preparation

Jordan WB Amman Water and Sanitation ● n.a. 55 1999–2004 Water Authority of Jordan

Management Project

Kazakhstan WB Atyrau Pilot Water Supply and ● ● n.a. 16 1999–? Atyrau Oblast Government

Sanitation Project

WB Pilot Water Supply Project ● n.a. 7 1996–? State Committee for Water Resources

EBRD Almaty Potable Water and ● ● 40 6 2001–? Almaty Sui

Sewerage Project

WB Atyrau Pilot Water Supply and ● ● n.a. 17 1999–2004 Atyrau Oblast Akimat

Sanitation Project

WB Environmental Management and ● 52 42 under Ministry of Natural Resources and

Rehabilitation Project preparation Environment

Kenya WB Lake Victoria Environmental ● ● n.a. 13 1996–2002 Ministry of Environment and Natural

Management Project Resources

Kiribati ADB Sanitation, Public Health, and ● ● 13 10 1998–? Ministry of Finance and Economic

Environment Improvement Planning

Kyrgyz ADB Community-Based Infrastructure ● ● 45 36 2000–2005 Ministry of Agriculture

Republic Services Sector and Water Resources

WB Rural Water and Sanitation Project ● ● n.a. 20 under Ministry of Agriculture and Water

preparation Resources

Laos ADB Water Supply and Sanitation Sector ● ● 25 20 1999–? Ministry of Communication,

Transport, Post and Construction

Lebanon WB Greater Beirut Water Supply ● ● n.a. 65 under Council for Development and

preparation Reconstruction

Lesotho WB Highlands Water Project n.a. 45 1998–2004 LHDA

Macedonia WB Water Supply and Sewerage Project ● ● n.a. 32 under Water Companies and the Ministry of

preparation Urbanism

Madagascar WB Rural Water Supply and Sanitation ● ● n.a. 17 1997–2003 Ministry of Energy and Mines

Pilot Project

Mauritius WB Environmental Sewerage and ● n.a. 12 1998–2003 WWA

Sanitation Project

Mexico NADB Acuna, Cohuila Comprehensive ● 80 17 2000–? Municipal Water and Wastewater

Sanitation Project Utility

NADB Juarez, Chihuahua, North and South ● 31 5 1997–? Municipal Water and Wastewater

Wastewater Treatment Plants Project Utilities
70 U.S. Department of Commerce, International 

Trade Administration

NADB Naco, Sonora, Water Supply and ● ● 2 1 1996–? Municipal Water and Wastewater

Wastewater Collection and Utilities

Treatment System

NADB Nogales, Sonora, Water Supply and ● 39 9 1996–? Municipal Water and Wastewater

Distribution Project Utilities

NADB Puerto Palomas, Chihuahua, ● 5 2 2000–? Municipal Water and Wastewater

Improvement to Wastewater Collection Utilities

and Treatment Systems

NADB Region Cinco Manantiales, Coahuila, ● 18 7 2000–? Industrial Papelera Solar

Paper Recycling and Wastewater

Treatment Project

NADB Reynosa, Tamaulipas Comprehensive ● 83 8 1998–? n.a.

Sanitation Project

NADB San Luis Colorado, Sonora ● 14 6 2000–? Organismo Operador Municipal de

(construction of a wastewater Agua Potable, Alcantarillado y

treatment plant and rehabilitation Saneamiento de San Lui

of the wastewater collection system) Rio Colorado

NADB Piedras Negras, Coahuila, ● 57 17 Sistema Municipal de Aguas y

Comprehensive Sanitation Project Sanemiento de Piedras Negras

NADB Ensenada Baja California, ● 8 None 1995–? n.a.

Wastewater Treatment Plant

NADB Matamoros, Tamaulipas, ● 1 None 1996–? n.a.

FINSA Industrial Park

NADB Mexicali, Baja California, Sanitation

Program for the City of Mexicali ● 57 21 2000–? State Water Commission

NADB Tecate, Baja California, Improvement ● ● 8 4 2000–? Tecate State Public Services

and Expansion of the Water and Commission

Wastewater System

NADB Tijuana, Baja California, Sewage ● 20 3 1997–? n.a.

Treatment Plant Rehabilitation

and Expansion

Mongolia WB Ulan Bator Services ● n.a. 17 1997–? n.a.

Improvement Project

Project Financing

Project Components (millions of dollars)

Municipal Municipal Industrial Total Loan/ Project

Water Supply Sewage and Wastewater Proj. Grant Duration

 Country and Treatment Sanitation Treatment Amt. Amt. Status ExecutingAgency

Funding

Agency/

Source Project Title
71

Water and Wastewater Export Market Plan

Morocco WB Rural Water Supply and ● ● n.a. 10 1997–? National Office of Potable Water

Sanitation Project

Mozambique WB National Water Development Project n.a. 35 1998–? Ministry of Public Works and

Housing

Nepal ADB Melamchi Water Supply Project ● 464 120 2000–? Ministry of Planning and Publications

ADB Small Towns Water Supply and ● ● 54 35 2000–? Ministry of Physical Planning and

Sanitation Sector Works

WB Rural Water Supply and ● ● n.a. 18 1996–2002 Rural Water Supply and Sanitation

Sanitation Project Fund

Nicaragua IDB Lake Managua and City of Managua ● ● 47 15 1996–? INAA

Environmental Improvement Program,

Stage I

Niger WB Niger State Water Supply and ● ● n.a. 46 under Ministry of Water Resources

Sanitation Sector Study Project preparation

Nigeria WB Small Towns Water Supply and ● ● n.a. 5 2000–? Ministry of Water Resources and

Sanitation Program Pilot Project Rural Development

WB Urban Water Sector Reform Project ● n.a. 250 under Federal Ministry of Water Resources

preparation

Pakistan ADB Korangi Wastewater Management ● 101 70 1997–? Government of Sindh Karachi Water

and Sewerage Board

WB Karachi Water Supply and ● ● n.a. 92 1993–? KWSB/KMC

Sanitation Project

Papua Provincial Towns Water Supply ● ● 15 25 2000–? Papua New Guinea Water Board

New Guinea ADB and Sanitation

Paraguay WB Rural Water Supply and ● n.a. 40 1997–2003 Senasa

Sanitation Project

WB Asunción Sewerage Project ● n.a. 47 1995–2003 Corposana

Philippines WB Water Districts Development Project ● n.a. 57 1997–2004 Local government

WB Local Government Units Urban and ● ● n.a. 86 under n.a.

Sanitation Project preparation

WB Manila Sewerage Project ● n.a. 57 1996–2003 MWSS

ADB Mindanao Basic Urban Service Sector ● ● 71 35 1997–2002 Land Bank of the Philippines

ADB Subic Bay Area Municipal ● 37 22 1997–2002 Subic Bay Metropolitan Authority

Development Project

Poland EBRD Krakow Plaszow II Wastewater ● 74 20 2000–? Krakow Water Supply and Waste

Treatment Plant Modernisation Project Water Treatment Company

WB Bielsko Biala Water and

Wastewater Project ●● ● n.a. 22 1996–2003 n.a.

EBRD Bydgoszcz Water Supply and Sewerage ● ● 62 23 1999–? Water Supply and Sewerage

Services Development Program Company of Bydgoszcz
72 U.S. Department of Commerce, International 

Trade Administration

Russia WB Water Supply and Sanitation ● ● n.a. 123 2000–2006 Municipal Water and Wastewater

Enterprise

WB Community Social ● ● n.a. 200 1996–2002 Ministry of Nationalities and Federal

Infrastructure Project Affairs

WB Municipal Water and ●● ● n.a. 122 2000–2006 Municipal Water and Wastewater

Wastewater Project Enterprise

Russia EBRD Yaroslav Municipal Water Services ● 18 14 under Yaroslavl Water Utility

Development Program preparation

EBRD Kaliningrad Water and Environmental ● 63 18 1999–? Kaliningrad Vodokanal

Services Project

Rwanda WB Rural Water and Sanitation Project ● ● n.a. 20 2000–? MINERENA/CDC

Senegal WB Long–Term Water Supply Project ● n.a. 125 under n.a.

preparation

Sierra Leone WB Urban Water Supply Project ● n.a. 36 1995–2003 Guma Valley Water Co.

Sri Lanka WB Urban Water Supply and ● ● n.a. 20 under Ministry of Urban Development

Sanitation Project preparation Construction

WB Environmental Action Plan ● n.a. 15 1997–2002 MTEWA

Tajikistan WB Dushanbe Water Supply Project ● n.a. 15 under Dushanbe Vodokanal (DVK)

preparation

Tanzania WB Rural Water Supply and ● ● n.a. 15 under Ministry of Water

Sanitation Project preparation

WB Dar–es–Salam Water Supply and ● ● n.a. 45 under Ministry of Water, Dar es Salaam

Sanitation Project preparation Water Supply and Sewerage

Authority

WB Lake Victoria Environmental

Management Project ● ● n.a. 10 1996–2002 Vice President’s Office

Thailand ADB Samut Prakarn Wastewater

Management ● 671 230 1998–? Pollution Control Department

ADB Northeast Region Water Supply ● 100 5 n.a. Provincial Waterworks Authority

Tunisia WB Greater Tunis Sewerage and ● n.a. 60 1997–2004 National Office of Sanitation/

Reuse Project Ministry of Agriculture

WB Water Supply and Sewerage Project ● ● n.a. 58 1994–2002 Sonede/National Office of Sanitation

Project Financing

Project Components (millions of dollars)

Municipal Municipal Industrial Total Loan/ Project

Water Supply Sewage and Wastewater Proj. Grant Duration

 Country and Treatment Sanitation Treatment Amt. Amt. Status ExecutingAgency

Funding

Agency/

Source Project Title
73

Water and Wastewater Export Market Plan

Turkey WB Antalya Water Supply and ● ● n.a. 130 1995–2003 Antalya Water Supply and Sewerage

Sanitation Project Authority

Uganda WB Lake Victoria Environmental ● ● n.a. 12 1996–2002 Ministry of Natural Resources

Management Project

Ukraine WB Municipal Water and n.a. 24 under Lviv Vodokanal

Wastewater Project preparation

Uruguay WB Water Sector Modernization and ● ● n.a. 27 2000–2004 State Water Utility

Rehabilitation Project

Uzbekistan WB Water Supply, Sanitation, and ● n.a. 30 1997–2005 State Committee for Monitoring and

Health Project Statistics

WB Samarkand and Bukhara Water ● ● n.a. 41 under Bukhara and Samarkand Water Utility

Supply and Sanitation Project preparation

Vietnam WB Water Supply Project ● n.a. 99 1997–2002 Ministry of Agriculture

WB Three Cities Sanitation Project ● n.a. 80 1999–2005 Municipal water utilities

Yemen WB Municipal Water Project n.a. 90 under Ministry of Electricity and Water

preparation

WB Sana’s Basin Water n.a. 50 under National Water and Sanitation

Management Project preparation Authority

Note: For explanation of acronyms used in this table, see the list of acronyms on page iv.
74 U.S. Department of Commerce, International Trade Administration

U.S. Government Agencies

U.S. Agency for International Development

Information Center

1300 Pennsylvania Ave., NW

Ronald Reagan Building

Washington, DC 20523-0016

Tel: (202) 712-4810

Fax: (202) 216-3524

Web site: www.info.usaid.gov

Africa Bureau

USAID/AFR, Room 4.08

Tel: (202) 712-0500

Fax: (202) 216-3008

Web site: www.info.usaid.gov/regions/afr/

Asia and Near East Bureau

USAID/ANE, Room 4.09

Tel: (202) 712-0200

Fax: (202) 216-3386

Web site: www.info.usaid.gov/regions/ane/

Europe and Eurasia Bureau

USAID/ENE, Room 5.06

Tel: (202) 712-0290

Fax: (202) 216-3057

Web site: www.info.usaid.gov/regions/europe_eurasia/

Latin America and the Caribbean Bureau

USAID/LAC, Room 5.09

Tel: (202) 712-4800

Fax: (202) 216-3012

Web site: www.info.usaid.gov/regions/lac/

Eurasian American Partnership for Environmentally

Sustainable Economies (EcoLinks)

U.S. Regional Office

1400 K St., NW, Suite 650

Washington, DC 20005

Tel: (202) 326-7798

Fax: (202) 326-7709

E-mail: plai@iie.org

Web site: www.ecolinks.org

Global Technology Network (GTN)

1133 20th St. NW, Suite 600

Washington, DC 20036

Tel: (202) 955-7473

Fax: (202) 785-8489

E-mail: usgtn@usgtn.org

Web site: www.usgtn.org/

U.S.-Asia Environmental Partnership (US-AEP)

1720 I St. NW, Suite 700

Washington, DC 20006

Tel: (202) 835-0333

Fax: (202) 825-0366

E-mail: usasia@usaep.org

Web site: www.usaep.org

US-AEP Technology Representation Offices

Web site: www.usaep.org/contacts.htm#

technologyrepresentatives

Environmental Technology Network for Asia (ETNA)

1720 Eye St. NW, Suite 600

Washington, DC 20006

Tel: (800) 818-9911

Fax: (202) 835-8358

E-mail: tyoder@usaep.org

Web site: www.usaep.org/ouractiv/etna.htm

U.S. Department of Commerce

International Trade Administration

14th St. and Constitution Ave., NW

Washington DC 20230

Tel: (800) 872-8723 or (202) 482-3809

Fax: (202) 482-5819

Web site: www.ita.doc.gov

Bureau of Export Administration

Tel: (202) 482-2721

Fax: (202) 482-2421

Web site: www.bxa.doc.gov/factsheets/

ExporterAssistance.html

Appendix B

Government and Industry Contact List
Water and Wastewater Export Market Plan 75

Export Assistance Centers

U.S. Department of Commerce

International Trade Administration

Room 3810

14th St. and Constitution Ave., NW

Washington, DC 20230

Tel: (202) 482-4767

Fax: (202) 482-0687

Web site: www.ita.doc.gov/fcs/uscs/

Export Assistance Center Directory

Web site: www.ita.doc.gov/fcs/uscs/domfld.html

Office of Environmental Technologies Industries

Tel: (202) 482-5225

Fax: (202) 482-5665

Web site: www.environment.ita.doc.gov

Office of Trade Development—Energy Division

Tel: (202) 482-4931

Fax: (202) 482-5361

Web site: www.ita.doc.gov/td/energy/

Trade Information Center

U.S. Department of Commerce

R-TIC Stop

1401 Constitution Avenue, NW

Washington, DC 20230

Tel: (800) 872-8723

E-mail: TIC@ita.doc.gov

Web site: infoserv2.ita.doc.gov/tic.nsf

Advocacy Center

U.S. Department of Commerce

International Trade Administration

Room 3814A

14th St. and Constitution Ave., NW

Washington, DC 20230

Tel: (202) 482-3896

Fax: (202) 482-3508

Web site: www.ita.doc.gov/advocacy

U.S. Foreign and Commercial Service

Tel: (202) 482-5777

Fax: (202) 482-5013

Web site: www.ita.doc.gov/fcs/uscs/

U.S. Department of Energy

Office of Public Inquiries

1000 Independence Ave., SW

Washington, DC 20589

Tel: (202) 586-5575

Fax: (202) 586-0823

Web site: www.doe.gov

Energy Information Administration

National Energy Information Center

1000 Independence Ave., SW

Washington, DC 20585

Tel: (202) 586-8800

E-mail: infoctr@eia.doe.gov

Web site: www.eia.doe.gov/

Office of Energy Efficiency and Renewable Energy

U.S. Department of Energy

EE1 6C-016

1000 Independence Ave., SW

Washington, DC 20589

Tel: (202) 586-9220

Web site: www.eren.doe.gov

U.S. Country Studies Program and U.S. Initiative on Joint

Implementation (Secretariat)

Forrestall Building, PO-6 / GP-196

1000 Independence Ave., SW

Washington, DC 20585

Tel: (202) 586-3288

Fax: (202) 586-3485

U.S. Department of State

Bureau of Public Affairs

2201 C St., NW

Washington, DC 20520

Tel: (202) 647-6575

Fax: (202) 736-7720

E-mail: publicaffairs@panet.us-state.gov

Web site: www.state.gov

U.S. Environmental Protection Agency

Public Information Center

401 M St., SW

Washington, DC 20460

Tel: (202) 260-2090

Fax: (202) 565-2411

Web site: www.epa.gov

Office of International Activities

Ronald Reagan Building

1300 Pennsylvania Ave., NW

Washington, DC 20004

Tel: (202) 564-6600

Fax: (202) 565-2407

Web site: www.epa.gov/oia/

U.S. Export-Import Bank

811 Vermont Ave., NW

Washington, DC 20571

Tel: (800) 565-EXIM (3946) or (202) 565-EXIM (3946)

Fax: (202) 565-3380

Web site: www.exim.gov
76 U.S. Department of Commerce, International Trade Administration

U.S. Overseas Private Investment Corporation

1100 New York Ave., NW

Washington, DC 20527

Tel: (202) 336-8799

Fax: (202) 408-9859

E-mail: info@opic.gov

Web site: www.opic.gov

U.S. Small Business Administration

Office of International Trade

409 3rd St., SW

Washington, DC 20416

Tel: (202) 205-6720

Fax: (202) 205-7272

Web site: www.sbaonline.sba.gov/oit/

U.S. Trade and Development Agency

1621 North Kent St., Suite 200

Arlington, Virginia 22209-2131

Tel: (703) 875-4357

Fax: (703) 875-4009

E-mail: info@tda.gov

Web site: www.tda.gov/

Multilateral Development Banks

U.S. Department of Commerce, MDB Operations

14th St. and Constitution Ave., NW

Room 1107

Washington, DC 20230

Tel: (202) 482-3399

Fax: (202) 273-0927

Web site: www.ita.doc.gov/mdbo

African Development Bank

Boîte Postale 1387

Abidjan 01, Cote d’Ivoire

Tel: +225 (21) 44-44

Fax: +225 (22) 49-07

U.S. Commercial Liaison: U.S. Embassy

5 Rue Jesse Owens

B.P. 1712

Abidjan 01, Cote d’Ivoire

Tel: +225 (21) 46-16

Fax: +225 (22) 24-37

Asian Development Bank (ADB)

6 ADB Ave.

Mandaluyong City

0401 Metro Manila, Philippines

Tel: +63 (2) 632-4444

Fax: +63 (2) 636-2444

U.S. Commercial Liaison:

U.S. Commercial Service

U.S. Embassy, Manila

APO AP 96515

Tel: +63 (2) 890-9364

Fax: +63 (2) 890-9713

North American Office:

1730 Pennsylvania Ave., NW

Suite 975

Washington, DC 20006

Tel: (202) 626-0050

European Bank for Reconstruction and Development

(EBRD)

One Exchange Square

London EC2A 2EH UK

Tel: +44 (171) 338-6282

Fax: +44 (171) 338-6102

U.S. Commercial Liaison:

Office of the U.S. Executive Director

Tel: +44 (171) 338-6569

Fax: +44 (171) 338-6487

Global Environment Facility (GEF)

1818 H St., NW

Washington, DC 20433

Tel: (202) 473-8324

Fax: (202) 522-0551

U.S. Commercial Liaison:

Office of the U.S. Executive Director

Tel: (202) 458-0120

Fax: (202) 477-2967

International Finance Corporation (IFC)

1801 K St., NW

Washington, DC 20433

Tel: (202) 473-0642

Fax: (202) 334-8705

U.S. Commercial Liaison:

Office of the U.S. Executive Director

Tel: (202) 458-0120

Fax: (202) 477-2967

Inter-American Development Bank (IDB)

1300 New York Ave., NW

Washington, DC 20036

Tel: (202) 623-1365

Fax: (202) 623-1403
Water and Wastewater Export Market Plan 77

E-mail: pic@iadb.org

U.S. Commercial Liaison:

Office of the U.S. Executive Director

U.S. Commercial Service

Tel: (202) 623-3821

Fax: (202) 623-2039

Inter-American Investment Corporation

1300 New York Ave., NW

Washington, DC 20036

Tel: (202) 623-3900

Fax: (202) 623-2360

U.S. Commercial Liaison:

Office of the U.S. Executive Director

U.S. Commercial Service

Tel: (202) 623-3821

Fax: (202) 623-2039

Multilateral Investment Guarantee Agency (MIGA)

1818 H St., NW

Washington, DC 20433

Tel: (202) 473-6163

Fax: (202) 522-2630

U.S. Commercial Liaison:

Office of the U.S. Executive Director

Tel: (202) 458-0120

Fax: (202) 477-2967

North American Development Bank (NADBank)

700 N. St. Mary’s, Suite 1950

San Antonio, TX 78205

Tel: (210) 231-8000

Fax: (210) 231-6232

World Bank

1818 H St., NW

Washington, DC 20433

Tel: (202) 458-5454

Fax: (202) 522-1500

U.S. Commercial Liaison:

Office of the U.S. Executive Director

Tel: (202) 458-0120

Fax: (202) 477-2967

Other Organizations

American Consulting Engineers Council

International Affairs Program

1015 15th St., NW, Suite 802

Washington, DC 20005

Tel: (202) 347-7474

Fax: (202) 842-2436

E-mail: kpuvak@acec.org

Web site: www.acec.org

Business Council for Sustainable Energy

1200 18th St., NW, Ninth Floor

Washington, DC 20036

Tel: (202) 785-0507

Fax: (202) 785-0514

E-mail: bcse@bcse.org

Web site: www.bcse.org

Council of State Governments

State Environmental Initiative

2760 Research Park Drive

P.O. Box 11910

Lexington, KY 40578-1910

Tel: (606) 244-8234

Fax: (606) 244-8001

E-mail: kmarshal@csg.org

Web site: www.csg.org

National Association of State Development Agencies

750 First St., NE, Suite 710

Washington, DC 20002

Tel: (202) 898-1302

Fax: (202) 898-1312

E-mail: jpike@nasda.com

Web site: www.nasda.com

National Pollution Prevention Roundtable

2000 P St., NW, Suite 708

Washington, DC 20036

Tel: (202) 466-7272

Fax: (202) 466-7964

E-mail: tyronefoster@compuserve.com

Web site: www.p2.org

World Trade Centers Association

60 East 42nd St.

Suite 1901

New York, NY 10165

Tel: (212) 432-2626

Fax: (212) 488-0064

Web site: www.iserve.wtca.org
78 U.S. Department of Commerce, International Trade Administration

Appendix C

Water and Wastewater Industry Trade Associations

American Metropolitan Sewerage Association

(AMSA)

1816 Jefferson Pl., NW

Washington DC 20036-2505

Tel: (202) 833-AMSA (2672)

Fax: (202) 833-4657

E-mail: info@amsa-cleanwater.org

Web site: www.amsa-cleanwater.org

American Water Resource Association (AWRA)

4 West Federal St.

P.O. Box 1626

Middleburg, VA 20118-1626

Tel: (540) 687-8390

Fax: (540) 687-8395

E-mail: info@awra.org

Web site: www.awra.org

American Water Works Association (AWWA)

6666 West Quincy Ave.

Denver, CO 80235

Tel: (303) 794-7711

or

1401 New York Ave., NW, Suite 640

Washington, DC 20005

Tel: (202) 628-8303

Web site: www.awwa.org

Association of Metropolitan Water Agencies (AMWA)

1717 K St., NW, Suite 801

Washington, DC 20036

Tel: (202) 331-2826

Fax: (202) 785-1845

Web site: www.amwa-water.org

Association of State Drinking Water Administrators

1025 Connecticut Ave., NW, Suite 903

Washington, D.C. 20036

Tel: (202) 293-7655

Fax: (202) 293-7656

E-mail: asdwa@erols.com

Web site: asdwa.org

International Private Water Association

205 West End Ave., Suite 8-L

New York, NY 10023

Tel: (212) 873-0920

Fax: (212) 873-5531

Web site: www.ipwa.org

International Water Resources Association

4535 Faner Hall

Southern Illinois University

Carbondale, IL 62901-4516

Fax: (618) 453-2671

E-mail: iwra@siu.edu

Web site: iwra.siu.edu

National Association of Water Companies

1725 K St., NW, Suite 1212

Washington, DC 20006

Tel: (202) 833-8383

Fax: (202) 331-7442

Web site: www.nawc.org

National Ground Water Association

601 Dempsey Road

Westerville, OH 43081

Tel: (800) 551-7379

Fax: (614) 898-7791

Web site: www.ngwc.org

National Rural Water Association

2915 South 13th St.

Duncan, OK 73533-9086

Tel: (580) 252-0629

Fax: (580) 252-4896

Web site: www.nrwa.org

National Water Resources Association

3800 North Fairfax Dr., Suite 4

Arlington, VA 22203

Tel: (703) 524-1544

Fax: (703) 524-1548

Web site: www.nwra.org
Water and Wastewater Export Market Plan 79

Water Environment Federation (WEF)

601 Wythe St.

Alexandria, VA 22314-1994

Tel: (703) 684-2452

Fax: (703) 684-2492

Web site: www.wef.org/
80 U.S. Department of Commerce, International Trade Administration

Appendix D

International Programs Affecting the Water and

Wastewater Industry

U.S. Agency for International Development

(USAID)

Ronald Reagan Building

1300 Pennsylvania Ave., NW

Washington, DC 20523-0016

Tel: (202) 712-4810

Fax: (202) 216-3524

Web site: www.usaid.gov

USAID represents the single most important U.S. government source of opportunities for U.S. exporters of

environmental technologies, both in terms of direct procurement and strategic marketing related to environmental assistance projects. USAID is an independent federal

government agency that provides economic development

and humanitarian assistance to advance U.S. economic

and political interests overseas. Water projects and

projects with water/wastewater components are funded

by USAID in Washington, D.C., and through USAID

missions in developing countries.

USAID commodity procurement includes equipment

and supplies needed to fulfill USAID project needs and

disaster relief, as well as materials financed through

USAID-funded commodity import programs. Procurement is usually done by USAID missions in the field,

under projects with a value of over $1 million. It is important for U.S. companies to be able to take advantage

of procurement opportunities in order to position themselves in specific overseas markets.

USAID advertises procurement opportunities through

the following information sources:

 Commerce Business Daily (CBD): The CBD

includes announcements about all USAID commodity procurement opportunities and technical assistance projects with a value greater than $100,000.

Contact the U.S. Government Printing Office at

(202) 783-3238 to subscribe to the print version or

the U.S. Department of Commerce at (202) 482-

0632 for the electronic version.

 Procurement Information Bulletin (PIB): The PIB

lists USAID commodity procurement opportunities

and awards greater than $25,000. Written requests to

receive the PIB should be faxed to USAID’s Office

of Procurement at (202) 216-3051 or requested by

telephone at (202) 712-5130.

 Internet and phone inquiries: USAID posts

information on planned procurement as well as

currently issued Requests for Proposals (RFPs) on

its Web site (www.info.usaid.gov). Procurement

information can also be obtained by calling (800)

USAID-73.

Contract awards over $100,000 are very competitive

and a company should be economically sound and knowledgeable about procurement rules and regulations before

attempting to bid on federal procurement. It is very important to become familiar with Federal Acquisition

Regulations and USAID Acquisition Regulations. These

publications are available in most public libraries, or can

be ordered from the Government Printing Office.

USAID is most likely to procure environmental equipment through big contracts awarded to consortia of environmental engineering and consulting firms. The

equipment supplier would then need to become a subcontractor to the project’s prime contractor. Prime contractors have to go through a formal bidding process in

equipment procurement. Names, types of businesses, and

the subcontracting needs of USAID’s prime contractors

can be obtained from the Contract Awards section of the

CBD; USAID lists of prime contractors available through

the Information Center at (202) 712-4810; and federal

prime contracting reports available from the Federal Procurement Data Center at (202) 401-1529. It may also be

helpful to obtain information on past awards, quantities,

costs, and awardees.

USAID puts special emphasis on involving U.S. small

and medium-sized enterprises in its technology transfer

efforts. The Office of Small and Disadvantaged Business

Utilization (OSDBU) is the initial point of contact at

USAID for U.S. small businesses. OSDBU is a small

business advocacy and advisory office with the responsibility for ensuring that these enterprises get access to

USAID programs. The office fulfills the following

responsibilities:
Water and Wastewater Export Market Plan 81

 Serves as an information clearinghouse for U.S.

small businesses,

 Counsels small businesses on how to do business

with USAID,

 Reviews all prime contracts to identify subcontracting opportunities for small businesses,

 Maintains a vendor database, which describes the

capabilities of U.S. businesses and organizations

interested in participating in the agency’s programs,

 Sponsors annual outreach conferences on “How To

Do Business with USAID,” and

 Develops operations, systems, and procedures to

optimize participation of U.S. small businesses in

USAID activities.

Even if direct procurement is not envisioned under a

significant technology-related USAID project, suppliers

in the relevant technology area can benefit from learning about it to identify potential markets in the target

country. USAID’s Environment: A Resource Guide provides a good overview of the agency’s principal programs

and contracts.

USAID’s Global Technology Network (GTN)

USAID Global Bureau’s Office of Business Development serves as the central point of contact at USAID for

U.S. firms interested in doing business in developing

countries. Its activities and services are specifically intended to increase U.S. private enterprise participation

in USAID international development programs while

opening up new market opportunities for U.S. product

and services firms, especially small and medium-sized

firms. The Office of Business Development operates

regional Business Outreach Offices that provide links

to market opportunities in USAID-assisted countries

worldwide. They also serve as a source of public information regarding the purpose and impact of U.S. foreign

assistance.

The Global Technology Network (GTN) is the principal program of the Office of Business Development. GTN

is a free service that creates strategic linkages between

U.S. companies and entrepreneurs in developing countries with the goal of transferring U.S. technology overseas. GTN’s environmental and energy services assist the

U.S. business community in gaining access to global environmental and energy markets by providing trade leads

and market information.

The three basic types of leads are equipment purchases,

agent/distributor, and joint ventures. Business opportunities are identified by a network of participating in-country public and private sector representatives. Leads are

transmitted to GTN/Washington where they are qualified,

matched, and electronically disseminated to U.S. firms

registered in GTN’s databases. Over 10,000 U.S. environmental and energy firms covering over 600 different

subsectors within the environmental industry are currently registered in the GTN system. (Companies can register by calling 1 (800) 872-4348.) To give U.S.

companies easier access to GTN business opportunities,

GTN is now posting its current trade leads online at

www.usgtn.org/pages/envleads.html.

Follow-up on trade leads, as well as information on

general USAID procurement, is provided through GTN/

Washington and outreach offices in California, Florida,

Illinois, Oregon, and Washington (contact information is

provided in Appendix A). Additional follow-up on leads

is provided through U.S. Export Assistance Centers and

26 state trade partner organizations across the U.S. Partner organizations use GTN’s Internet-based Trade Lead

Tracking System to assist local companies in responding to GTN trade leads.

Business Support Centers (BSCs) serve as the counseling and information services arm of GTN. BSCs are

USAID-funded business development operations designed to help private sector companies (especially small

and medium-sized businesses) in developing countries

access the technology and expertise needed to compete

effectively in local and global markets. BSCs serve as a

mechanism for organizing and assisting developing country firms, especially small and medium-sized enterprises

seeking access to U.S. technology and expertise. BSCs

also provide trade leads to U.S. firms seeking to market

their products and services abroad.

The GTN Travel Grants program is designed to support U.S. firms pursuing GTN trade leads. After an official or businessperson in another country and a U.S.

business have identified a mutual interest in pursuing a

business relationship, either organization may apply for

a GTN grant for a maximum of $5,000 to cover the travel

costs of one individual’s travel to meet with the potential partner. The grants are available for both developing

countries and U.S. entrepreneurs.

GTN trade mission services, which include sector

briefings and networking support to USAID field missions and domestic partners, are provided in cooperation

with other federal and multilateral agencies. Trade missions are held at USAID offices in the International Trade

Center in Washington, D.C. Similar services are available for in-coming GTN trade delegations sponsored by

USAID missions and U.S. embassies abroad, foreign

embassies, or other GTN partner organizations.

Under a cooperative agreement with USAID, the International Executive Service Corps (IECS) delivers a
82 U.S. Department of Commerce, International Trade Administration

range of business development services to assist small

and medium-sized businesses in developing countries

through joint ventures with counterpart U.S. companies.

The following are GTN’s regional programs:

 GTN-Environmental Technology Network for Asia

(ETNA) was developed by USAID’s Global Bureau

and the United States-Asia Environmental Partnership

(US-AEP). ETNA Asia facilitates the transfer of U.S.

environmental technology to Hong Kong, India,

Indonesia, South Korea, Malaysia, the Philippines,

Singapore, Sri Lanka, Taiwan, and Thailand.

 GTN-Americas is a joint program between

USAID’s Global Bureau and the U.S. Department of

Commerce. GTN Americas generates trade leads in

Argentina, Bolivia, Brazil, Chile, Costa Rica,

Mexico, Peru, Uruguay, and Venezuela.

 GTN-Ecolinks offer resources to providers of U.S.

technologies. For more information, see the Eurasian-American Partnership for Environmentally

Sustainable Economies description on page 83.

GTN also operates in 15 African countries, as well as

in Egypt and Jordan.

United States-Asia Environmental Partnership

1720 I St. NW, Suite 700

Washington, DC 20006

Tel: (202) 835-0333

Fax: (202) 835-0366

E-mail: usasia@usaep.org

Web site: www.usaep.org

The United States-Asia Environmental Partnership is an

interagency program with funding of more than $17.5

million from USAID, the Department of Commerce, and

the Environmental Protection Agency to promote and

reinforce a sustainable cleaner production regime for the

industrial and urban sectors in 11 Asian countries: Hong

Kong, India, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and

Vietnam. Since its inception in 1993, US-AEP has facilitated over $1 billion in sales of environmental equipment and services by U.S. companies in Asia.

In cooperation with the Department of Commerce, USAEP has placed environmental technology representatives in 11 Asian countries to identify trade opportunities

for U.S. companies and coordinate meetings between potential Asian and U.S. business partners. These environmental trade specialists meet regularly with decisionmakers in industry and government to prepare concise

trade leads that identify Asian buyers, environmental concerns, and proposed technology solutions. Hundreds of

such leads per year are forwarded to ETNA where they

are matched against a database of over 2,400 registered

U.S. companies, and then faxed to those companies that

provide the requested technology or service.

Urban environmental infrastructure representatives, located in four Asian countries (India, Indonesia, the Philippines, and Thailand), provide similar services, but focus

on problems found in urban areas, such as the provision

of clean water, treatment of wastewater, and disposal of

solid and hazardous wastes.

In addition to the trade leads provided by the US-AEP

technology representatives in Asia, ETNA provides market trend analyses for each US-AEP country; disseminates fact sheets on innovative U.S. technologies to U.S.

government counterparts overseas (e.g., US-AEP technology representatives and foreign commercial service

representatives); and provides business counseling to U.S.

environmental companies interested in expanding their

business in Asia. Contact ETNA ((800) 818-9911) to find

out more about these and other services.

Export-Link is an Internet resource accessible through

the US-AEP Web site (www.usaep.org) that assists companies with their international trade activities and provides practical assistance to all levels of exporters.

Export-Link helps U.S. firms evaluate overseas market

opportunities and offers advanced business analysis, as

well as relevant legal, financial, and market information.

The Environmental Exchange Program promotes information sharing on a variety of environmental topics

to respond to Asian countries’ environmental needs.

There are several types of exchanges provided. Environmental business exchanges offer American and Asian

businessmen an opportunity to travel to each other’s

countries to meet potential business partners. Business

exchanges may involve a single individual or a study tour

of 10 to 20 people. Technical exchanges help representatives from U.S. firms showcase their technology and

equipment to Asian decision-makers. Finally, environmental fellowships enable Asian and American professionals to work with peers in their counterpart’s home

country for a period of one to four months for training,

research, or information sharing. Interested U.S. businesses should contact the Institute of International Education (at www.iie.org), which administers the program.

Drawing on the U.S. states’ experience in environmental management, the State Environmental Initiative,

provides matching grants for up to $150,000 to encourage state-initiated and -managed programs. The initiative was designed to encourage international partnerships

in environmental and economic development between
Water and Wastewater Export Market Plan 83

U.S. states and Asian/Pacific nations and territories. The

grants serve to facilitate the long-term transfer of U.S.

environmental experience, technology, and practice to

targeted Asian countries by matching appropriate U.S.

technologies and state regulatory and environmental experience with the needs of Asian governments and industries. The grants are issued by the Council of State

Governments.

The Environmental Technology Fund is administered by the National Association of State Development

Agencies (NASDA) and is described under “NASDA

Grants” in this section.

Eurasian-American Partnership for

Environmentally Sustainable Economies

(EcoLinks)

U.S. Regional Office

1400 K St., NW, Suite 650

Washington, DC 20005

Tel: (202) 326-7798

Fax: (202) 326-7709

E-mail: plai@iie.org

Web site: www.ecolinks.org

The Eurasian-American Partnership for Environmentally

Sustainable Economics (EcoLinks) offers resources to

providers of U.S technologies as part of its regional initiative to find practical, market-based solutions to industrial and urban environmental problems in Central and

Eastern Europe (CEE) and the New Independent States

(NIS). It promotes partnerships linking CEE/NIS businesses, local governments, and associations with U.S.

counterparts. EcoLinks actively seeks environmental

business and technology transfer opportunities in the

Czech Republic, Poland, Hungary, Romania, Kazakhstan,

Russia, Ukraine, and Macedonia.

The EcoLinks technology transfer program operates

in the same way as ETNA does in Asia. Through an

interagency agreement between USAID and the Department of Commerce, environmental technology representatives have been placed in selected CEE/NIS countries,

namely, the Czech Republic, Hungary, Kazakhstan, Poland, and Romania. These representatives work with

GTN to generate trade leads.

A second component of EcoLinks is its grants initiative. Competitively awarded, cost-sharing partnership

grants are currently available in amounts of up to $50,000

to support one-year cooperative projects. Twinning grants

(grants that support two-year cooperative projects that

lead to lasting partnerships) of up to $250,000 became

available for two-year projects starting in the year 2000.

In addition to the grants, EcoLinks also offers Quick

Response Awards to prospective applicants. Awards of

up to $5,000 are designed to meet the immediate and

small-scale needs of organizations exploring potential

partnerships within the framework of EcoLinks. Activities must either facilitate the matchmaking of potential

partners or promote environmental trade and investment.

Examples of funded activities include travel to meet potential partners, site visits to facilities, technology demonstrations, and conferences where participants meet

partners and forge relationships.

National Association of State Development Agencies

(NASDA)

750 First St., NE, Suite 710

Washington, DC 20002

Tel: (202) 898-1302

Fax: (202) 898-1312

Web site: www.nasda.com

The National Association of State Development Agencies (NASDA) administers three similar grant programs

promoting U.S. environmental technology exports to Asia

and Latin America.

The Environmental Technology Fund (Tech Fund),

created under the US-AEP, provides matching grants of

up to $20,000 to help small and medium-sized U.S. companies enter Asian environmental markets.1 Grants match

from 20 to 50 percent of total project costs.

The Tech Fund focuses on pollution control, cleaner

technologies, and energy efficiency. Preferred projects

are those that aim to reduce or eliminate Asia’s greenhouse gas emissions. Environmental activities that are

eligible for a grant include engineering/technology workshops or seminars, business development missions, and

technology/equipment demonstrations. Over the five

years of the program’s operation, grant funding has been

provided for more than 275 projects, facilitating over

$350 million in export sales of U.S. environmental products and technologies.

NASDA has recently completed a similar Latin

American Fund for the Environment program that has

awarded matching grants (of up to $15,000) for 51

projects in 17 countries throughout Latin America and

the Caribbean, and generated over $21 million in revenues for participating U.S. firms.

Under a cooperative agreement with the Environmental Protection Agency, NASDA is currently considering

1. The countries included under the Environmental Technology Fund

do not include China.
84 U.S. Department of Commerce, International Trade Administration

a Program for Environmental Technology Transfer

(PETT) with China. The program would enable small

and medium-sized businesses to fund technology demonstrations, workshops, and development programs targeting pollution prevention, air pollution, wastewater

treatment, and energy efficiency in China.

U.S. Department of Commerce (DOC)

14th St. and Constitution Ave., NW

Washington, DC 20230

Tel: (202) 482-2000

Web site: www.doc.gov

Within the U.S. Department of Commerce (DOC), several offices and centers provide services that assist U.S.

exporters in their business development efforts.

Environmental Technologies Exports (ETE) is the

principal resource and key contact point within the DOC

for American environmental technology companies, including all business activities associated with environmental protection, assessment, compliance with

environmental regulations, pollution control, waste management, remediation of contaminated property, design

and operation of environmental infrastructure and the

provision and delivery of environmental services. ETE’s

goal is to enhance the international competitiveness and

increase the exports of the U.S. environmental industry

by providing basic market and project-related research;

supporting a variety of trade promotion activities, including leading trade missions; providing business counseling and representing the interests of U.S. environmental

firms; and supporting the creation of public-private partnerships. ETE supports the Environmental Technologies

Trade Advisory Committee and the interagency Environmental Trade Working Group, a subcommittee of the

Trade Promotion Coordinating Committee.

The U.S. and Foreign Commercial Service (the

Commercial Service) has offices located in over 220 cities around the world to assist U.S. exporters. The organization offers U.S. businesses advocacy support and

services such as export counseling, trade finance information, customized market research, and identification

of trade leads. It also organizes trade missions and events,

and offers a Gold Key Service to link U.S. firms with

agents and distributors around the world by allowing visiting U.S. company representatives to get a firsthand understanding of the local market and make key contacts

that are critical to successful exporting.

The Matchmaker Trade Delegations Program helps

small and medium-sized U.S. companies establish business relationships in major markets abroad. Each Matchmaker Trade Delegation targets major markets in two or

three countries with strong sales potential for U.S. goods

and services. Commercial specialists at U.S. embassies

and consulates in the targeted countries prescreen contacts and arrange business appointments for participating U.S. firms. The Matchmaker program also offers

market research and evaluation of the market potential

for a specific product or service; in-depth country market and trade finance briefings; interpreter services and

logistical support; and export counseling before, during,

and after the trip.

The Advocacy Center promotes U.S. firms through

advocacy by high-level U.S. Government officials and

tracks environmental projects worldwide. The Trade Information Center (TIC) is a comprehensive resource for

information on all federal government export assistance

programs. TIC staff counsel small and medium-sized

U.S. companies that are entering the export market. Multilateral Development Bank Operations provides the

U.S. exporting community with comprehensive information on all multilateral development bank programs and

opportunities.

Export Assistance Centers are a joint effort of the

Commercial Service, the Small Business Administration,

the Export-Import Bank of the United States, and USAID.

Center personnel counsel small and medium-sized export-ready businesses and help them develop customized

international business strategies. The centers are located

throughout the United States and in nearly 70 countries

abroad.

U.S. Trade Development Agency Programs

1621 North Kent St., Suite 200

Arlington, VA 22209-2131

Tel: (703) 875-4357; fax: (703) 875-4009

E-mail: info@tda.gov

Web site: www.tda.gov

The U.S. Trade and Development Agency (TDA) is an

independent federal agency dedicated to assisting U.S.

companies in pursuing business opportunities in developing countries and responding to foreign competition.

It sponsors feasibility studies, definitional missions, and

desk studies for major public and private sector projects

in order to promote the use of U.S. goods and services in

project implementation. By funding feasibility studies

that evaluate the technical, legal, economic, and financial aspects of development projects, TDA provides U.S.

companies with an opportunity to get in on the ground

floor of a project.
Water and Wastewater Export Market Plan 85

TDA focuses primarily on feasibility studies for infrastructure development projects. Funding from the

agency usually ranges from $150,000 to $750,000 for

public sector projects. These feasibility studies also advise project sponsors about the availability of specific

U.S. equipment and services. TDA publishes the TDA

Pipeline, its biweekly newsletter, that highlights new

definitional missions, feasibility study opportunities (also

advertised in the Commerce Business Daily), and upcoming orientation visits and conferences. TDA business

briefings and events often provide a good introduction

to current opportunities in a specific sector or region.

TDA hosts approximately 45 orientation visits each

year. These week-long reverse trade missions bring foreign buyers to the United States to see equipment they

may need for development projects. U.S. suppliers that

participate in these visits are able to showcase their products and expertise, while making valuable international

contacts. In conjunction with these visits, TDA often

hosts a business briefing to allow U.S. companies to meet

with the visiting delegation to hear more details about

their needs.

Additionally, TDA hosts a number of events to assist

in opening global markets to U.S. businesses. Each event

offers:

 Workshops that highlight the best project opportunities for U.S. businesses in the region or sector;

 A complete briefing book profiling each project in

detail;

 One-on-one meetings between U.S. companies and

foreign project officials; and

 Strategy and insight into some of the world’s most

challenging and rewarding emerging markets.

U.S. Environmental Protection Agency (EPA)

Office of International Activities

Ronald Reagan Building

1300 Pennsylvania Ave., NW

Washington, DC 20004

Tel: (202) 564-6600

Fax: (202) 565-2407

Web site: www.epa.gov/oia

The Environmental Protection Agency’s (EPA) international programs play an important role in helping the U.S.

environmental sector expand its export base. U.S. private sector groups have repeatedly underscored the importance of EPA’s international technology and technical

assistance programs in creating markets for U.S. environmental goods and services.

By showcasing the effectiveness and capabilities of

available and emerging U.S. environmental technologies,

EPA technology diffusion programs in developing countries lead to follow-on commercial opportunities for U.S.

firms. EPA’s training programs also prepare the way for

the exports of U.S. technologies. The training programs

usually identify U.S. environmental technology manufacturers in the relevant sectors.

Under a cooperative agreement with the EPA, the National Association of State Development Agencies

(NASDA) is currently conducting a Program for Environmental Technology Transfer (PETT) to China. The

program enables small and medium-sized businesses to

fund technology demonstrations, workshops, and development programs targeting pollution prevention, air pollution, wastewater treatment, and energy efficiency in

China.

EPA is widely recognized as the world’s leading source

of environmental information which helps build capacity for the use of advanced technologies. In addition to

providing thousands of pages of technical data via the

Internet, EPA also makes information on U.S. environmental technology vendors available to potential buyers.

For example, the Vendor Information System for Innovative Treatment Technologies (VISITT) provides

vendor-supplied information on innovative technologies

that can be used to treat contaminated groundwater, sludges, and sediments. EPA’s Clean Air Technology Center provides a similar resource for information on

emerging and existing air pollution prevention and control technologies. Through its International Visitors Program, EPA staff helps arrange tours of U.S. facilities with

innovative technologies in use, and set up meetings with

U.S. technology suppliers.
86 U.S. Department of Commerce, International Trade Administration

Appendix E

U.S. Environmental Trade Working Group Contacts

Department of Commerce

Environmental Technologies Exports Office

14th St. and Constitution Ave., NW

Room 1003

Washington, DC 20230

Tel: (202) 482-5227

Fax: (202) 482-5665

Department of Defense

3300 Defense Pentagon

Room B, 739

Washington, DC 20301

Tel: (703) 614-8784

Fax: (703) 695-1495

Department of Energy

Office of International Energy,

Policy, Trade and Investment

1000 Independence Ave., SW

Room 73034

Washington, DC 20589

Tel: (202) 586-5493

Fax: (202) 586-3047

Department of the Interior

1849 C St., NW

Room 6123

Washington, DC 20240

Tel: (202) 208-6182

Fax: (202) 208-4561

Department of State

Office of Environment and Development

2201 C St., NW

Room 7831

Washington, DC 20520-7818

Tel: (202) 647-2232

Fax: (202) 647-0217

Department of Treasury

Office of Trade and Investment Policy

1500 Pennsylvania Ave., NW

Room 3208

Washington, DC 20220

Tel: (202) 622-0168

Fax: (202) 622-5304

Environmental Protection Agency

Office of International Activities

401 M St., SW, Room W1135

Washington, DC 20460-2610

Tel: (202) 260-4870

Fax: (202) 260-4470

Export-Import Bank

811 Vermont Ave., NW

Room 1257

Washington, DC 20571

Tel: (202) 565-3540

Fax: (202) 565-3548

Overseas Private Investment Corporation

1100 New York Ave., NW

Washington, DC 20527

Tel: (202) 336-8628

Fax: (202) 218-0104

Small Business Administration

Office of International Trade

409 3rd St., SW

Mail Code 7550

Washington, DC 20416

Tel: (202) 205-6720

Fax: (202) 205-7272

Trade and Development Agency

Office of Exports

2201 C St., NW, Room 309, SA-16

Washington, DC 20523-1810

Tel: (703) 875-4357

Fax: (703) 875-4009

U.S. Agency for International Development

Office of Energy, Environment, and Technology

Room 508, SA-18

Washington, DC 20523-1810

Tel: (703) 875-4465

Fax: (703) 875-4053
Water and Wastewater Export Market Plan 87

U.S.-Asia Environmental Partnership

320 12th St., NW, Suite 3208

Washington, DC 20523

Tel: (202) 647-7037

Fax: (202) 647-5861

U.S. Environmental Training Institute

1000 Thomas Jefferson St., NW

Suite 106

Washington, DC 20007

Tel: (202) 338-3400

Fax: (202) 338-4782

U.S. Information Agency

Office of Environment Security

USIA, Room 848

301 4th St., SW

Washington, DC 20547

Tel: (202) 619-6655

Fax: (202) 619-5646

U.S. Trade Representative

Office of Environment and Natural Resources

600 17th St., NW, Room 410

Washington, DC 20508

Tel: (202) 395-7320

Fax: (202) 395-4579

White House

Office of Science and Technology Policy

Old Executive Office Building

Room 443

Washington, DC 20502

Tel: (202) 456-6084

Fax: (202) 456-6025

U.S.-ASEAN Council

1400 L St., NW, Suite 375

Washington, DC 20005-3509

Tel: (202) 289-1911

Fax: (202) 289-0519

United States National Committee for Pacific Economic

Cooperation

1755 Massachusetts Ave., NW

Suite 412

Washington, DC 20036-2102

Tel: (202) 745-7444

Fax: (202) 797-1355

Pacific Basin Economic Council

1100 Connecticut Ave., NW

Suite 1300

Washington, DC 20036

Tel: (202) 728-0993

Fax: (202) 728-0998
88 U.S. Department of Commerce, International Trade Administration

Appendix F

Helpful Documents

U.S. Government Reports

Environmental Market in Japan, U.S. Department of

Commerce, International Trade Administration, 1998.

Financing Environmental Exports: A Guide to the Fundamentals and Sources, U.S. Department of Commerce,

International Trade Administration, 1998.

Global Competitiveness of U.S. Environmental Technology Industries: Municipal and Industrial Water and

Wastewater, U.S. International Trade Commission, 1995.

Hungary: Water Treatment Equipment and Services, Industry Sector Analysis, U.S. and Foreign Commercial

Service and U.S. Department of State, 2001.

Meeting the Challenge: U.S. Industry Faces the 21st

Century: The U.S. Environmental Industry, U.S. Department of Commerce, October 1998.

Journal Articles

“Competitive Analysis of U.S. Environmental Exports

and Global Market Update,” Environmental Business

International, 1995.

“Global Environmental Markets 2000,” Environmental

Business Journal, vol. XII, no. 9/10, 2000.

“The U.S. Water Industry,” Environmental Business Journal, vol. XII, no. 7/8, 1999.

“Vivendi Acquisition of US Filter Fuels Global Growth

to $13 Billion in Water,” Environmental Business Journal, vol. XII, no. 7/8, 1999.

“Wastewater Instrument Firm Sees Opportunity Abroad,

Global Environmental Markets 2000,” Environmental

Business Journal, vol. XII, no. 9/10, 2000.

“The Top 200 International Design Firms,” Engineering

News Record, July 17, 2000.

Private-Sector Reports

Baudon, T., “Developing Water Projects in Emerging

Markets: What Are the Challenges and What Does it Take

to Succeed?” Global Infrastructure Development: World

Markets in 1999, Standard & Poors, 1998.

Central and Eastern European Water and Wastewater

Treatment Equipment Markets, Frost & Sullivan, report

no. 3792-15, 2000.

European Commercial Scale Water Treatment Equipment

Markets, Frost & Sullivan, report no. 3822-15, 2000.

Goldman Sachs, B2B: 2B or Not 2B? version 1.1, part 1

of 5, November 12, 1999.

Middle Eastern, North African, and European Desalination Plant Markets, Frost & Sullivan, report no. 3857-

15, 2000.

Other Reports

Export Commodity Report, Oregon State University,

1994–1998.

Financial Performance and Expenditure of the Water

Companies in England and Wales: 1999–2000. Office of

Water Services, 2000 (www.ofwat.gov.uk).

Global Water Supply and Sanitation Assessment: 2000

Report, World Health Organization, 2000.

Silva, et al., “Private Participation in the Water and Sewerage Sector—Recent Trends,” Public Policy for the Private Sector, The World Bank Group, 1998.
Water and Wastewater Export Market Plan 89

3926909885 other articles of plastic and other materials, headings 3901–3914, NESOI

4601200000 mats, matting, and screens of vegetable materials

5603140000 non-wovens, of manmade filament, weighing greater than 150g/m2

8413600020 hydraulic fluid power pumps, rotary positive, vane

8413600030 hydraulic fluid power pumps, rotary positive displacement

8413600040 hydraulic fluid power pumps, rotary positive displacement

8413600070 roller pumps, rotary positive displacement

8413600090 rotary positive displacement pumps, NESOI

8413702004 submersible pumps, centrifugal

8413702005 centrifugal pump, single-stage, single-suction, close-coupled, discharge outlet under 5.08 cm

in diameter

8413702015 centrifugal pump, single-stage, single-suction, close-coupled, discharge outlet over 5.08 cm in

diameter

8413702022 centrifugal pump, single-stage, single-suction, frame-mounted, discharge outlet under 7.6 cm

in diameter

8413702025 centrifugal pump, single-stage, single-suction, frame-mounted, discharge outlet over 7.6 cm in

diameter

8413702030 centrifugal pumps, single-stage, double-suction

8413702040 centrifugal pumps, multi-stage, single- or double-suction

8413702090 centrifugal pumps for liquids, NESOI

8413810020 turbine pumps, NESOI

8413810030 household water systems, self-contained; windmill pumps

8413810040 pumps for liquids, NESOI

8421210000 water filtering or purifying machinery and apparatus

8421290005 refrigerant recovery and recycling units

8421290015 oil-separation equipment

8421290040 hydraulic fluid power filters, rated ge 1000 kpa

8421290065 other filtering, purifying equipment for liquids NESOI

8479820040 mixing, kneading, or stirring machines, NESOI

8479909565 parts of machines/mechanical appliances for treat mtl, NESOI

8479909580 other parts of machines and mechanical appliances

NESOI = not elsewhere specified or included

Source: U.S. International Trade Commission, Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes,

14th ed. (Washington, D.C.: U.S. Government Printing Office, 2001).

Appendix G

Water Equipment Harmonized

Tariff Schedule (HTS) Numbers
90 U.S. Department of Commerce, International Trade Administration

Appendix H

U.S. Exports of Water Equipment by Country,

1996–2000 (U.S. dollars)

Country 1996 1997 1998 1999 2000

Mexico 93,343,528 127,157,630 1,289,996,024 1,872,116,328 2,390,043,094

Canada 409,997,307 482,477,551 989,460,379 1,295,019,848 1,344,168,465

Japan 176,353,541 144,427,435 174,236,876 374,991,002 449,632,374

South Korea 102,886,025 83,996,914 38,458,813 248,243,991 390,933,496

Taiwan 60,743,153 77,967,756 108,215,349 244,196,294 362,394,294

Singapore 36,646,507 45,230,488 61,353,899 183,567,220 262,563,797

Germany 67,208,335 61,333,742 88,682,297 170,097,231 230,560,520

United Kingdom 75,019,301 79,073,038 143,278,219 196,174,867 208,886,139

France 53,110,661 86,978,086 115,563,487 163,321,098 178,407,443

China 41,354,395 45,127,524 63,643,971 99,783,457 126,844,896

Netherlands 20,896,491 30,900,506 43,724,770 133,969,341 105,169,938

Malaysia 26,023,435 29,156,205 18,141,955 66,113,790 96,348,261

Italy 13,532,509 16,173,438 25,581,771 64,493,152 84,913,383

Belgium 24,447,034 39,228,640 57,688,342 69,368,090 84,329,724

Israel 10,459,408 10,161,733 13,974,421 64,192,547 77,280,271

Australia 34,644,327 40,091,322 51,484,883 68,254,903 63,593,976

Philippines 20,207,644 25,620,903 16,667,567 65,699,970 63,205,375

Hong Kong 29,198,793 32,368,092 43,258,295 57,848,505 61,016,339

Saudi Arabia 39,202,950 57,230,214 42,749,539 41,917,655 48,371,345

Ireland 3,947,662 7,114,857 13,589,077 45,061,967 44,942,225

Brazil 20,840,445 33,318,195 39,477,569 45,793,730 44,434,150

Venezuela 14,229,571 15,042,739 23,153,567 39,124,016 39,287,994

Russia 12,528,744 18,531,684 21,672,546 30,407,587 35,641,692

Thailand 36,052,558 38,921,066 25,734,794 27,729,191 33,764,047

Spain 13,345,247 14,878,713 19,030,488 38,774,007 33,153,723

Egypt 19,326,968 19,330,024 18,028,679 27,061,179 26,099,155

India 16,725,260 12,256,370 21,372,203 19,488,029 24,094,831

Argentina 16,066,988 13,926,747 21,339,355 27,439,289 19,422,350

Switzerland 7,402,770 6,011,720 7,633,475 22,023,096 18,887,465

Chile 14,992,963 22,293,715 18,570,350 17,453,843 18,679,696

United Arab Emirates 10,404,792 9,779,734 10,042,325 18,884,156 17,783,142

Kuwait 12,982,402 5,583,950 13,624,825 5,918,198 15,216,345

Sweden 6,836,346 8,143,899 9,427,262 13,572,077 15,008,546

Czech Republic 1,606,234 886,805 2,068,443 3,107,089 14,991,975

Dominican Republic 4,127,007 3,243,029 7,541,428 7,918,970 12,045,521

Republic of South Africa 7,218,152 11,034,848 11,802,615 10,998,955 11,852,622

Austria 3,172,623 3,797,140 8,331,394 12,905,912 11,617,969

Peru 4,438,113 9,620,736 12,864,125 8,316,944 11,170,875

Hungary 425,422 340,085 604,539 2,272,754 10,528,350

Indonesia 20,167,804 11,940,330 8,923,994 13,230,407 10,481,445

Aruba 276,884 399,702 7,040,696 58,830,092 9,799,351

Colombia 14,691,827 11,595,861 15,273,857 17,647,388 9,793,857
Water and Wastewater Export Market Plan 91

Country 1996 1997 1998 1999 2000

Denmark 9,847,560 6,872,075 8,428,985 10,127,250 9,749,023

New Zealand 5,060,169 6,149,190 7,782,156 12,773,825 9,042,307

Honduras 1,541,329 1,863,322 4,611,699 7,746,125 8,582,086

Brunei 3,010,596 1,034,780 748,780 1,761,796 8,528,789

Costa Rica 3,400,613 2,030,650 3,589,460 8,660,123 7,957,232

Finland 5,366,144 3,387,242 4,916,642 9,696,857 7,873,401

Turkey 5,986,321 16,792,489 17,481,784 14,627,019 7,404,486

Algeria 3,084,290 2,400,537 1,790,405 3,004,073 6,737,342

Bahamas 2,225,061 5,602,573 3,438,720 2,856,137 5,539,359

Norway 2,201,109 3,728,101 4,202,744 5,840,591 4,433,538

Jamaica 2,628,790 2,548,887 4,165,514 2,992,951 4,423,618

Trinidad and Tobago 1,584,751 5,817,088 3,925,879 3,660,501 4,189,865

Poland 4,029,119 4,538,150 4,722,754 5,767,893 3,994,755

Guatemala 1,819,865 2,383,709 5,962,612 5,271,870 3,945,651

Ecuador 4,570,760 6,575,657 5,825,572 5,958,286 3,941,795

Nigeria 1,855,543 1,046,557 6,083,844 2,464,253 3,831,012

El Salvador 2,049,595 3,018,717 2,505,590 3,896,969 3,672,651

Panama 1,231,935 1,482,369 6,693,049 9,065,526 3,644,975

Kazakhstan 115,031 215,179 732,380 880,394 3,482,866

Jordan 2,696,061 2,579,963 4,706,286 2,433,578 3,365,946

Greece 1,698,359 7,201,040 2,545,769 5,223,201 3,296,321

Cyprus 263,009 459,306 531,312 1,131,102 2,893,168

Paraguay 241,461 710,914 691,831 227,829 2,630,221

Qatar 1,034,475 7,435,876 771,305 1,326,001 2,593,578

Portugal 2,177,537 1,807,911 1,720,345 3,433,549 2,559,337

Malta and Gozo 587,186 1,102,659 1,551,673 1,181,489 2,453,119

Angola 433,268 287,511 2,705,289 3,007,116 1,900,579

Oman 8,154,660 4,244,563 2,223,178 2,166,612 1,873,302

Kenya 176,379 370,269 372,216 446,882 1,831,741

Haiti 395,283 233,886 448,134 360,274 1,792,342

Azerbaijan 1,028,035 334,278 28,225 41,722 1,746,466

Vietnam 2,125,510 1,036,905 1,658,334 2,332,430 1,658,506

Bermuda 562,691 378,559 886,069 2,624,259 1,656,159

Tunisia 792,580 871,525 2,085,583 579,709 1,637,262

Bahrain 575,170 511,059 1,219,054 1,859,758 1,618,225

Nicaragua 838,346 642,655 599,960 1,018,075 1,469,967

Iceland 216,253 673,976 632,687 695,512 1,353,039

Pakistan 1,058,705 5,146,099 4,223,487 2,330,943 1,334,016

Barbados 185,558 341,351 446,966 2,259,034 1,327,151

Belize 1,095,432 512,803 887,410 1,840,257 1,323,897

Senegal 116,897 134,012 41,763 98,600 1,219,891

Grenada 118,539 104,059 3,124,868 472,319 1,203,998

Morocco 171,820 337,138 4,065,154 2,853,543 1,165,538

Slovenia 289,229 19,342 353,276 130,197 1,145,730

Uzbekistan 527,137 450,854 234,289 1,464,970 1,120,221

Croatia 44,654 1,943,477 247,565 196,462 1,108,842

Syria 1,664,977 1,359,089 1,776,321 1,274,448 1,056,534

Netherlands Antilles 593,732 2,758,352 717,390 2,699,495 1,027,035
92 U.S. Department of Commerce, International Trade Administration

Country 1996 1997 1998 1999 2000

Bolivia 613,201 1,273,386 1,119,340 2,387,346 992,173

Romania 645,431 650,267 381,705 1,512,744 867,201

Suriname 785,763 534,714 601,938 634,954 714,186

Uruguay 692,387 865,943 544,900 1,465,742 684,388

Sri Lanka (Ceylon) 371,504 177,335 693,253 1,044,625 547,424

Congo 136,952 830,719 1,530,088 429,782 537,877

Federated States

of Micronesia 0 2,660 265,857 74,295 535,262

Luxembourg 285,532 62,404 410,173 1,139,943 533,616

Ghana 615,420 423,613 246,446 654,284 519,772

Lebanon 2,007,816 2,761,344 1,598,702 1,407,620 503,449

Macedonia 0 0 97,278 398,871 493,418

Latvia 140,335 557,759 390,094 390,318 464,678

Yemen (Sana) 107,186 119,499 306,065 557,149 458,385

Slovakia 56,123 159,718 1,099,429 474,028 411,617

Nauru 0 0 21,587 23,160 404,461

Ukraine 294,952 3,832,211 3,019,641 504,612 383,258

Cayman Islands 223,476 534,906 685,546 1,841,604 362,291

Antigua Barbuda 459,127 87,773 528,581 296,677 279,687

St. Lucia 123,604 93,956 537,282 564,039 271,225

Guyana 206,480 346,004 173,694 1,226,128 269,032

British Virgin Islands 146,803 290,989 198,371 258,789 255,786

Bangladesh 755,373 454,877 580,392 157,543 254,924

Malawi 82,218 0 12,629 4,823 244,822

Lithuania 91,786 1,053,145 172,084 1,588,935 230,394

Gabon 34,881 45,033 274,996 27,771 226,108

Turks and Caicos Islands 184,411 463,223 542,247 395,202 217,243

Guadeloupe 108,369 132,083 320,062 143,918 217,022

Mauritius 644,587 2,590 116,818 145,421 205,148

Burkina Faso (Upper Volta) 0 12,120 0 70,000 196,575

Belarus 474,125 511,712 448,533 708,025 192,284

St. Christopher-Nevis 63,968 156,205 38,907 153,840 169,319

Zaire 320,268 16,203 33,425 14,602 167,974

Anguilla 25,593 65,612 164,139 428,354 163,004

Bosnia-Herzegovina 0 0 25,124 39,166 161,433

Fiji 97,376 10,440 12,997 155,292 153,406

Seychelles 21,846 0 587,105 55,022 149,741

Zimbabwe 120,462 145,603 73,357 157,340 146,461

Georgia 399,271 156,347 0 37,215 136,559

Tanzania 3,440 3,136 28,020 74,977 126,547

Uganda 0 0 84,101 26,644 123,531

French Polynesia 152,690 184,026 202,501 528,683 121,746

Madagascar 0 0 26,866 83,461 120,548

Cameroon 89,506 58,000 79,581 351,011 111,423

Turkmenistan 54,255 288,352 11,919 90,775 107,355

Rwanda 0 0 8,191 0 103,000

Tokelau Islands 0 0 11,618 0 102,262

Ethiopia 145,276 12,845 128,177 8,188 97,724
Water and Wastewater Export Market Plan 93

Country 1996 1997 1998 1999 2000

Estonia 95,187 16,341 223,900 166,759 95,467

Palau 0 104,794 38,400 38,160 81,185

Maldive Islands 187,395 269,335 347,875 586,019 79,738

Bulgaria 59,619 45,579 131,375 1,003,722 79,023

Mali 4,584 57,746 5,638 10,432 76,276

Togo 0 43,545 17,313 93,736 73,300

Western Samoa 3,000 20,900 2,602 3,477 72,320

Mozambique 111,625 170,768 20,265 100,030 68,510

Ivory Coast 15,111 2,268,151 181,688 56,308 66,899

Macao 11,145 167,942 371,586 98,747 58,784

French Guiana 24,052 36,194 49,368 93,710 53,939

Sierra Leone 8,315 0 0 0 51,223

Equatorial Guinea 840,610 1,365,998 1,029,403 1,443,188 40,197

Burma (Myanmar) 63,983 2,693 23,000 115,713 36,979

Chad 10,618 15,055 82,826 0 36,300

Liechtenstein 6,035 5,725 19,109 0 34,524

Papua New Guinea 52,512 78,809 31,951 120,203 33,609

Niger 0 18,922 0 0 33,372

St. Vincent and Grenadines 6,953 73,028 61,726 83,001 33,073

New Caledonia 153,882 82,815 4,811 359,219 31,743

Martinique 41,532 16,192 88,299 927,985 28,887

Mauritania 32,076 6,047 7,759 2,793 27,761

Guinea 54,866 19,180 36,960 127,435 24,929

Albania 12,354 0 0 65,465 18,819

Gibraltar 45,001 47,735 26,466 19,429 18,554

Réunion 0 46,028 0 17,090 13,278

Marshall Islands 141,621 91,758 330,089 330,516 12,191

St. Pierre and Miquelon 0 0 0 9,973 12,088

Swaziland 0 7,150 0 48,677 11,600

Dominica 29,070 4,980 27,797 69,763 11,232

West Bank 0 0 9,609 0 10,430

Liberia 0 29,740 35,531 360,589 10,280

Djibouti 13,000 56,099 62,889 54,092 9,702

Zambia 10,646 81,672 154,254 65,278 8,529

Eritrea 7,629 0 49,130 65,651 6,720

Yugoslavia

(Serbia/Montenegro) 0 436,193 35,157 29,186 6,533

Montserrat 0 96,306 0 2,560 6,228

Namibia 32,502 84,478 16,820 0 5,513

Lesotho 0 0 2,814 0 5,000

Cape Verde 0 28,685 0 274,624 4,903

Kiribati (Gilbert Islands) 3,619 8,890 0 4,100 4,771

Moldova 0 34,037 587,084 217,103 4,500

São Tome and Principe 0 0 0 0 3,964

Mongolia 7,740 7,950 19,612 21,646 2,863

Cambodia (Kampuchea) 2,865 28,600 21,078 0 2,590

Vanuatu (New Hebrides) 0 0 0 0 2,547

Andorra 0 0 17,604 0 0
94 U.S. Department of Commerce, International Trade Administration

Country 1996 1997 1998 1999 2000

Benin 0 0 4,853 0 0

Botswana 0 60,000 0 30,425 0

Central African Republic 0 231,249 0 12,473 0

Cook Islands 2,563 0 4,102 0 0

Faroe Islands 0 0 50,130 71,698 0

French S. Antarctic

 Territory 0 130,962 0 0 0

Gambia 16,268 0 0 34,429 0

Gaza Strip 0 0 0 540,598 0

Greenland 44,859 3,341 0 11,015 0

Korea, North 0 0 0 8,390 0

Kyrgyzstan 2,551 28,650 381,433 0 0

Laos 0 0 121,149 0 0

Nepal 217,000 31,506 222,372 34,654 0

Niue 339,441 926,519 0 0 0

Solomon Islands 0 0 0 6,495 0

Sudan 154,328 102,150 0 0 0

Svalbard,

 Jan Mayen Island 0 0 14,260 97,829 0

Tonga 0 3,802 2,782 3,210 0

Total 1,703,201,600 1,939,040,860 3,885,819,399 6,186,760,483 7,295,843,950

Source: U.S. International Trade Commission, Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes,

14th ed. (Washington, D.C.: U.S. Government Printing Office, 2001).
95

Water and Wastewater Export Market Plan

Appendix I

Water Equipment Exports by HS Number, 1996–2000

(domestic exports, FAS value, U.S. dollars)

HS Number Description 1996 1997 1998 1999 2000

3926909885 Oth Art of Plastic and Oth Mat, Hdg 3901-3914, NESOI 0 0 1,946,467,338 2,398,615,497 2,860,166,919

4601200000 Mats, Matting and Screens of Vegetable Materials 2,517,038 2,957,518 3,228,831 3,172,077 4,795,897

5603140000 Nonwovens, of Manmade Filament,Weighing Gt 150g/M2 30,121,265 47,894,757 52,534,167 43,537,218 88,652,769

8413600020 Hydraulic Fluid Power Pumps, Rotary Positive, Vane 117,247,416 104,178,978 129,505,111 197,175,250 191,620,001

8413600030 Hydraulic Fluid Power Pumps, Rotary Positive Displ 36,583,572 44,271,788 43,957,145 37,089,486 39,232,439

8413600040 Hydraulic Fluid Power Pumps, Rotary Positive Displ 44,157,484 58,377,691 79,496,790 66,748,744 64,038,300

8413600070 Roller Pumps, Rotary Positive Displacement 915,700 1,169,156 2,711,892 5,538,850 2,194,256

8413600090 Rotary Positive Displacement Pumps, NESOI 107,055,546 132,425,519 107,547,131 109,747,960 120,703,574

8413702004 Submersible Pumps, Centrifugal 63,318,194 74,142,726 61,866,804 73,067,782 80,231,956

8413702005 Cent Pmp Liq,Sing-Stg,Sing-Suc,Clos-Coup, Dis5.08cm 28,825,891 28,202,965 20,955,834 20,296,618 18,941,926

8413702015 Cent Pmp Liq,Sing-Stg,Sing-Suc,Clos-Coup, Ov 5.08cm 10,703,595 8,369,752 5,455,856 7,499,621 6,996,571

8413702022 Cent Pmp Liq,Sing-Stg,Sing-Suc,Clos-Coup, Disc7.6cm 26,199,344 28,592,995 22,819,717 19,124,232 20,058,405

8413702025 Cent Pmp Liq,Sing-Stg,Sing-Suc,Clos-Coup, Ov C7.6cm 27,672,914 32,158,716 24,733,877 21,258,470 25,744,541

8413702030 Centrifugal Pumps for Liquids, Sing-Stage, Dbl-Suc 5,281,174 10,778,979 8,099,479 5,571,524 7,215,520

8413702040 Cent Pumps for Liquids Multi-Stag,Sing or Doub-Suc 39,376,422 52,761,930 57,380,236 50,144,464 49,601,298

8413702090 Centrifugal Pumps for Liquids, NESOI 110,852,434 134,713,883 154,488,235 149,244,613 159,221,126

8413810020 Turbine Pumps, NESOI 20,932,622 23,686,464 30,652,747 31,136,119 29,837,688

8413810030 Household Water Syst,Self-Contain; Windmill Pumps 11,123,433 11,845,861 6,854,429 8,614,371 7,881,434

8413810040 Pumps for Liquids, NESOI 178,141,773 193,160,963 190,626,591 192,606,318 200,601,340

8421210000 Water Filtering or Purifying Machinery & Apparatus 634,790,553 664,389,246 628,338,373 579,591,512 638,157,780

8421290005 Refrigerant Recovery and Recycling Units 2,287,885 2,274,773 5,131,453 8,860,041 13,586,039

8421290015 Oil-Separation Equipment 22,328,945 28,726,226 28,897,677 22,516,084 28,560,531

8421290040 Hydraulic Fluid Power Filters, Rated Ge 1000 Kpa 6,746,503 8,704,507 9,343,805 14,809,992 16,531,155

8421290065 Other Filtering,Purifying Equip. for Liquids, NESOI 176,021,897 188,187,767 206,742,199 235,153,517 218,225,109

8479820040 Mixing, Kneading or Stirring Machines, NESOI 0 57,067,700 57,983,682 56,850,010 46,059,286

8479909565 Parts of Mach/Mechanical Appl for Treat Mtl, NESOI 0 0 0 22,789,832 27,283,920

8479909580 Other Parts of Mach & Mechanical Appliances 0 0 0 1,806,000,281 2,329,704,170

Total 1,703,201,600 1,939,040,860 3,885,819,399 6,186,760,483 7,295,843,950

NESOI = not elsewhere specified or included

Source: U.S. International Trade Commission, Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes, 14th ed. (Washington, D.C.: U.S. Government

Printing Office, 2001).
96 U.S. Department of Commerce, International Trade Administration

Appendix J

U.S. Imports of Water Equipment by Country,

1996–2000 (imports for consumption,

Customs value, U.S. dollars)

Country 1996 1997 1998 1999 2000

Canada 523,764,993 611,943,451 714,236,373 857,201,935 941,134,164

Japan 652,019,047 642,685,660 616,871,948 627,582,023 741,586,794

China 569,998,125 480,060,828 428,283,935 524,155,775 635,652,323

Germany 458,014,550 503,896,405 542,250,365 562,207,696 574,370,738

Mexico 220,495,897 273,602,037 397,456,859 411,005,780 415,702,127

United Kingdom 207,900,915 250,737,527 288,998,862 346,357,762 292,326,227

Italy 166,924,999 211,604,096 194,804,522 246,276,890 217,078,083

Taiwan 162,373,691 164,048,077 171,065,192 182,285,181 211,704,115

Sweden 101,989,697 104,360,940 105,012,838 112,735,178 149,751,436

France 101,756,658 103,401,229 106,741,578 116,719,994 117,265,332

Switzerland 81,789,770 81,038,280 100,447,009 116,862,502 109,956,485

Netherlands 61,118,843 55,404,048 49,250,878 66,330,210 77,452,763

South Korea 68,337,106 67,271,693 58,193,781 59,100,084 67,101,440

Israel 45,981,046 46,432,483 55,937,179 47,054,243 63,952,632

Ireland 17,033,982 22,962,434 21,761,268 43,597,804 45,501,025

Hong Kong 48,590,157 45,716,001 31,421,936 30,372,128 38,043,249

Belgium 31,043,384 25,474,502 27,849,730 30,031,682 37,894,170

Denmark 36,122,132 41,971,332 26,520,357 34,637,065 36,494,768

Austria 19,151,442 26,433,750 28,243,441 31,070,368 32,480,858

Finland 19,449,472 20,954,600 32,299,527 26,082,709 28,517,870

Australia 13,872,873 11,360,687 23,662,830 15,820,135 22,418,948

Spain 11,927,766 12,106,823 18,459,380 13,350,398 22,224,890

Dominican Republic 9,648,486 9,082,796 10,436,062 12,528,124 19,023,474

Brazil 15,567,582 14,685,568 17,677,855 13,839,663 18,439,571

Singapore 19,142,990 24,426,235 28,258,815 15,347,222 17,056,955

India 5,555,414 5,060,965 6,491,813 9,158,304 14,501,264

Malaysia 14,221,177 8,679,515 10,962,720 11,065,929 14,229,996

Thailand 16,672,814 21,790,559 12,146,384 10,607,940 12,973,605

Costa Rica 8,215,662 9,365,890 7,734,794 8,578,133 8,697,079

Norway 6,341,165 7,861,444 7,006,100 5,818,503 7,458,694

Republic of South Africa 6,473,088 8,434,128 6,774,349 7,129,991 7,265,435

Poland 2,960,479 5,082,631 3,727,971 4,834,751 6,898,556

Turkey 4,148,600 3,012,612 4,942,419 4,360,378 6,565,716

Philippines 5,622,667 9,174,422 4,606,780 4,555,622 6,054,629

Hungary 1,224,226 2,146,367 3,133,816 3,838,338 5,906,183

New Zealand 1,747,727 2,438,139 2,561,635 3,235,899 5,518,492

Indonesia 6,976,310 3,368,501 4,339,911 4,057,221 4,628,107

Czech Republic 1,700,554 1,188,138 1,801,259 2,230,996 4,081,709

Sri Lanka (Ceylon) 74,927 317,076 394,970 660,008 2,384,703

Colombia 441,988 649,613 563,421 969,754 2,129,617
Water and Wastewater Export Market Plan 97

Country 1996 1997 1998 1999 2000

Honduras 66,912 407,522 788,689 632,175 1,318,806

Venezuela 1,386,114 1,613,814 1,064,820 818,719 1,053,567

Argentina 750,714 467,188 339,771 539,293 1,046,212

Luxembourg 310,662 543,754 680,452 200,233 994,626

Slovenia 1,014,580 652,090 539,715 665,892 942,490

Portugal 804,275 577,528 675,519 1,065,488 849,386

Panama 101,835 58,013 339,223 289,128 600,863

Chile 327,742 169,496 302,656 268,835 594,355

Greece 598,789 2,029,228 735,956 678,801 549,136

Trinidad and Tobago 85,928 267,146 699,122 857,518 486,351

Macao 184,769 859,194 182,490 80,162 485,363

Saudi Arabia 47,472 15,352 7,194 114,294 437,125

Egypt 99,045 10,662 30,569 260,925 434,246

Bangladesh 80,690 45,619 10,138 42,036 429,859

Slovakia 251,603 170,238 279,134 596,679 365,683

West Bank 0 0 0 0 289,581

Lithuania 83,212 149,518 135,028 182,597 282,900

United Arab Emirates 342,768 645,380 81,789 130,569 246,567

Russia 818,822 555,721 266,678 166,847 238,959

Liechtenstein 522,252 684,763 588,081 609,047 220,324

Oman 9,000 0 8,811 65,667 214,999

Jamaica 80,881 154,507 146,655 56,839 187,325

Bulgaria 21,335 46,312 56,719 78,823 185,103

El Salvador 5,247 12,766 1,873 10,937 163,801

Peru 92,477 107,507 497,951 127,635 159,552

Guatemala 58,484 28,626 63,939 103,016 125,033

Romania 38,860 66,664 45,462 28,321 123,808

Iceland 69,890 37,503 21,435 55,654 110,242

Malta and Gozo 50,687 77,332 8,987 11,737 100,859

Niger 4,388 1,456 51,087 8,428 99,031

Bahrain 0 0 42,400 22,823 95,709

Cameroon 263,015 0 117,593 28,034 91,618

Pakistan 11,492 20,784 102,445 38,945 90,614

Mongolia 0 0 0 0 88,224

Bolivia 0 0 0 10,644 87,489

Congo 1,679 0 0 0 68,714

Ecuador 122,577 28,139 97,390 334,136 67,108

Vietnam 26,547 13,672 40,995 75,482 66,588

Croatia 17,069 15,598 46,087 98,527 60,328

Georgia 7,216 0 25,900 993 59,635

Jordan 10,485 4,245 3,359 0 58,485

St. Lucia 1,560,852 282,193 96,308 88,975 53,688

St. Christopher-Nevis 27,708 86,000 340,982 44,193 50,546

Monaco 32,872 12,399 42,709 116,545 50,200

Estonia 29,725 29,016 199,412 395,543 49,186

Kenya 27,636 65,943 23,295 338,966 45,181

Barbados 13,207 20,770 57,285 18,669 43,656

Cambodia (Kampuchea) 2,369 0 0 20,940 37,024
98 U.S. Department of Commerce, International Trade Administration

Macedonia 0 0 0 0 35,408

Morocco 1,919 3,054 2,486 5,585 33,364

Mauritius 160,027 103,004 15,242 752 23,918

Ukraine 6,569 45,319 45,828 205,696 22,854

Qatar 0 1,530 2,000 10,927 22,509

Nigeria 3,549 2,999 3,883 2,679,756 21,528

Haiti 377,809 14,053 13,107 20,268 21,199

Nepal 0 5,234 12,997 17,592 17,889

Cyprus 0 85,444 66,414 19,635 17,754

Nicaragua 490 0 0 11,557 17,387

Madagascar 46,523 86,336 76,188 91,798 16,731

Bahamas 2,805 8,563 10,324 1,671 16,114

Fiji 446 0 10,409 20,334 15,866

Lebanon 2,125 4,055 252 7,202 15,516

Ivory Coast 32,705 17,502 4,496 53,209 15,128

Netherlands Antilles 0 43,256 71,610 1,500 14,740

Suriname 1,059 2,187 3,484 1,507,062 14,713

Syria 0 1,500 1,650 0 10,763

Belize 960 0 270 0 10,500

Bermuda 0 0 700 4,600 10,000

Moldova 18,500 0 0 0 8,544

Dominica 7,021 18,552 2,597 699 8,121

Antigua Barbuda 0 0 0 0 7,529

Sierra Leone 0 0 0 5,796 6,635

São Tome and Principe 0 0 0 0 6,001

Bosnia-Herzegovina 2,446 0 0 0 6,000

Guyana 3,919 10,821 14,850 83,769 5,404

Réunion 0 0 0 840 5,000

Albania 0 0 9,310 0 4,300

Montserrat 4,181 0 0 0 4,292

Gibraltar 0 0 0 0 4,162

Uruguay 11,574 157,500 103,653 10,238 4,147

Greenland 0 0 1,995 4,325 3,878

Gabon 3,857 0 1,684 1,851 3,822

Namibia 18,488 1,537 0 3,886 2,621

Malawi 0 0 0 0 2,520

Paraguay 0 1,541 0 0 2,293

Christmas Island 0 0 0 0 2,264

Brunei 2,276 8,725 0 0 2,054

Burma (Myanmar) 0 0 0 43,754 1,706

Belarus 0 912 14,511 6,797 1,592

Ethiopia 0 0 0 0 762

Zimbabwe 14,270 626 3,716 0 715

Comoros 0 0 0 0 598

Ghana 2,335 1,271 3,748 0 580

Azerbaijan 0 750 0 0 507

St. Vincent and Grenadines 0 0 0 0 446

Maldive Islands 0 0 0 0 412

Country 1996 1997 1998 1999 2000
Water and Wastewater Export Market Plan 99

San Marino 0 676 261 0 378

Tunisia 65,763 5,965 0 9,560 337

Afghanistan 18,190 0 0 0 0

Algeria 0 3,119 0 0 0

Anguilla 4,320 0 0 0 0

Armenia 23,258 6,740 15,950 4,184 0

Aruba 0 3,000 0 0 0

British Virgin Islands 727 0 1,566 0 0

Burkina Faso (Upper Volta) 0 0 0 966 0

Cayman Islands 0 2,795 0 0 0

Chad 1,280 0 0 0 0

Cocos (Keeling) Islands 0 0 4,610 0 0

Faroe Islands 1,464 0 0 0 0

Gambia 0 3,060 0 0 0

Grenada 12,783 0 0 0 0

Guadeloupe 0 1,756 11,675 0 0

Kuwait 13,500 0 5,000 0 0

Latvia 50,250 26,248 29,270 29,104 0

Lesotho 0 918 5,109 0 0

Mali 14,634 25,081 0 19,000 0

Martinique 0 0 3,159 554 0

Nauru 0 0 0 376 0

New Caledonia 19,642 0 0 0 0

Pitcairn Island 0 0 0 0 0

Senegal 0 6,860 7,443 8,576 0

Seychelles 0 5,000 0 0 0

Somalia 0 9,072 0 0 0

Swaziland 16,441 0 8,327 0 0

Tanzania 0 0 579 16,500 0

Tokelau Islands 0 16,156 0 0 0

Tonga 1,522 1,900 0 15,670 0

Uzbekistan 0 0 0 585 0

Western Samoa 0 0 12,170 0 0

Yemen (Sana) 0 0 0 23,814 0

Yugoslavia

(Serbia/Montenegro) 0 11,067 12,500 0 0

Zaire 0 2,000 0 0 0

Total 3,757,825,910 3,952,022,824 4,183,831,988 4,638,984,016 5,057,395,868

Source: U.S. International Trade Commission, Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes,

14th ed. (Washington, D.C.: U.S. Government Printing Office, 2001).

Country 1996 1997 1998 1999 2000
100 U.S. Department of Commerce, International 

Trade Administration

Appendix K

U.S. Imports of Water Equipment by HS Number, 1996–2000 (U.S. dollars)

HS Number Description 1996 1997 1998 1999 2000

392690 articles of plastics, nesoi 1,908,833,690 1,910,533,895 2,025,435,385 2,284,724,537 2,527,923,676

460120 mats, matting, and screens of vegetable materials 10,958,216 7,855,350 9,612,232 12,395,215 17,179,705

560314 nonwovens, of mmf weighing > 150 g/m2 17,180,874 31,512,038 48,016,621 43,321,229 47,247,716

841360 rotary positive displacement pumps, nesoi 233,539,895 235,875,813 268,354,258 251,046,026 253,490,101

841370 centrifugal pumps, nesoi 205,625,192 226,541,461 247,372,965 280,594,744 303,390,268

841381 pumps for liquids, nesoi 144,622,078 170,963,873 157,300,796 174,472,575 178,614,131

842121 water filtering or purifying machinery and apparatus 149,569,842 138,672,248 188,164,488 240,938,783 252,919,155

842129 filter/purify machine and apparatus for liquid nesoi 163,580,306 202,143,652 197,279,724 247,935,187 255,526,675

847982 mixing, kneading, crushing, grinding machinery, etc. nesoi 110,563,006 111,874,023 117,215,608 136,468,280 148,696,105

847990 pts of mach/mechncl appl w indvdul function nesoi 813,352,811 916,050,471 925,079,911 967,087,440 1,072,408,336

Total 3,757,825,910 3,952,022,824 4,183,831,988 4,638,984,016 5,057,395,868

Source: U.S. International Trade Commission, Harmonized Tariff Schedule of the United States Annotated for Statistical Reporting Purposes, 14th ed. (Washington, D.C.:

U.S. Government Printing Office, 2001).