Sanitation economy value chain opportunity assessment
Creators: name: Frost & Sullivan
Publisher: name: Gates Open Research
Year: 2021

description: The Toilet Economy encompasses both the products and services related to toilets, and refers to both centralized and decentralizes systems, as well as systems that are sewered and non-sewered. It also referrers to innovative technologies and designs that adopt and apply principles related to the circular economy to develop toilet systems that are able to function in areas with a low or zero water supply; are energy efficient; and produce waste that is beneficiated. In South Africa, the Department of Water and Sanitation is responsible for the provision of water and sanitation. There are a variety of sanitation solutions, both dry and wet, such as full water borne systems, septic tanks, biodigesters, container-based systems, pit and improved ventilated pit latrines, and composting toilets. These systems operated differently according to resources required, energy used, and most importantly, how the waste produced is processed. In South Africa, the majority of those with access to sanitation services use the flush toilet and are connected to South Africa’s vast sewage network. However, many areas across South Africa are water scarce, and do not have access to the sewage network, preventing the development of full water-born systems. In these cases, alternative sanitations, utilizing low or no water, are implemented.<br> This issue is not only common to South Africa. Globally, around 4.5 billion people lack access to basic, safely managed sanitation. To combat the issues faced by many water and energy scarce countries, the “Reinvent the Toilet Challenge” was developed to bring together innovators to showcase their solutions. These solutions can provide full on-site sanitation solutions which include generation and containment, as well as treatment of waste in areas without an access to sewer systems and water supplies. These solutions can bring sanitation to the world’s poorest communities and contribute to the Sustainable Development Goals. Historically, indigent communities were deprived of basic sanitation. These inventions can change that, and at low cost and can be suited to residential consumers, schools, and clinics.<br> The challenging nature of the sanitation landscape has allowed for the new and innovative technologies to flourish. These technologies, developed both locally and abroad, incorporate aspects of resource efficiency, energy efficiency, processing, and the idea of no longer view waste, as simply waste. The aim is to maximize the value that can be extracted from waste and to recovered or regenerate usable products that re-enter the value chain.<br> On a global scale, the poor sanitation is costing the global economy nearly USD 222.8 billion per year. In India alone, the sanitation economy is projected to have an estimated market value of USD 62 billion by 2021. Moreover, it is estimated that every USD 1 invested into the global sanitation economy, a global economic return of USD 5.5 can be expected. The opportunities to utilize this constant and high-volume supply of raw materials are endless.<br> However, end-user perception and acceptance of waste derived products has been highlighted as a barrier to entry. Many religious and cultural beliefs prevent the handling of waste, or simply view human waste as “taboo”. Education and awareness around the safety, usability, and advantages of waste derived products is necessary. Regulations around the safety and quality ofthese products could be developed as means of facilitating its growth and improving acceptability. Waste derived products range from energy sources such as biogas and briquettes, and nutrients to produce a natural and sustainable fertilizer for the agricultural sector. These products can create revenue streams, which are able to significantly offset the high cost of sanitation provision for indigent and low-income communities. Companies such as Sanivation has brought sanitation to Kenya’s poorest communities, through the incorporation of a circular economy business model which incorporates waste management and processing, to produce waste derived products. Various business models exist to provide affordable sanitation, and these include:<br> <br> • Product-As-A-Service: This model focusses on revenue generation, as customers are not purchasing the product, but rather paying for services they use.<br> • Integrated Utility Services Model: This model can be applied to reinvented toilets where utility companies offer a range of reinvented toilets to its customers<br> • Cross-Subsidization Model: The cross-subsidization model utilizes profits generated from the sale of RTs to less price sensitive customers to fund the installation of RTs to more price sensitive customers.<br> • Civic Crowdfunding Model: The civic crowdfunding model incorporates both micro-finance and web-based crowdsourcing to provide sanitation to communities who are unable to afford it.<br> • Advertising Model: The advertising model offers a source of revenue that can potentially offset the cost of sanitation for indigent and low-income consumers.<br> • Customer Experience Centre Model: A customer experience center can create awareness around the RT and build strong relationships with potential customers.<br> <br> Smart Sanitation Economy has changed the way we view the simple toilet even more. What the toilet could do verse what it can do. Smart sanitation incorporates technologies such as mobile applications, blockchain, sensors, and big data, to improve our daily lives, as well as improving efficiencies in the sanitation value chain. It has the power to connect service providers and customers, facilitate remote payments, and track health data to prevent the spread of diseases. Technology has the power to open multiple opportunities in the smart sanitation sector, which is still unexplored. Companies such as Loowatt in Madagascar, BRAC in Bangladesh and CleanTeam in Ghana have utilized the mobile money technology to enable customers to pre-pay for sanitation services or finance toilet systems.<br> GIS tracking of sanitation service providers has the ability to restructure and optimize the fecal sludge (FS) emptying and transport sector. Through the application of the tracking system and the analysis of the resulting data can inform on the market size and thereby help to optimize the operation strategy, transport routes and efficiency. Essential health data can be captured about individuals, households, and communities through analyzing human waste. This information can be used to provide valuable insight into basic human health. The data captured can provide insight into biome, blood related and genetic information. IoT in healthcare was estimated at USD 117 billion and expected to continue experience significant growth.<br> These examples of incorporating technology into the sanitation sector has shown how it can facilitate growth and ease access to basic sanitation, along with showcasing how technology will change the way we view and interact with sanitation infrastructure and utilize the valuable information it has to offer. It has the power to prevent disease outbreaks and prevent pandemics across the globe, along with diagnosing illnesses in patients before any symptoms are displayed. The advantages associated with incorporating technology and utilizing the available data are endless.<br> The toilet economy in South Africa, broken down into the residential, commercial and public sector which focuses on public schools, is estimated to contain 37.3 million toilets. The residential sector dominates with 94% of the market share in terms of volume, followed by the commercial sector, and public sector with 6% and 1% respectively.<br> The total capital investment into toilets (including works) in South Africa currently totals R2,178.2 billion. Similarly, the current infrastructure base excluding works also shows that the largest capital base is for flush toilets and pit latrines. The total investment into toilet infrastructure in South Africa (excluding works) totals R317.6 billion. The total operational revenue for sanitation in South Africa in the base year (2019) was R62.5 billion.<br> The Residential Market accounts for 94% of installed toilets, with 67% of toilets connected to the sewage network. Over 10 million pit and VIP pit toilets are being used by residential consumers. Access to sanitation services vary across income groups as indigent and low-income communities have access to low levels of basic sanitation. It is estimate that 34% of households require upgrades or replacement of sanitation infrastructure. This creates an opportunity for infrastructure and service provision, as government and municipalities aim to provide sanitation to those in need. The technology implemented to these communities may vary according to resource availability as well as topography and may result in a combination of wet and dry sanitation solutions.<br> The demand for sanitation services in the residential sector will be driven my population growth, the rate of urbanization, the desire to incorporate green and sustainable systems, as well as the development of new residential homes, complexes, and the deployment of RDP housing.<br> The Commercial Market is home to over 2 million toilet unit that reside abundantly in the office and banking sectors, the retail sector, and the industrial warehouse space. Rising utility costs, awareness around sustainable building designs and the need to incorporate resource efficient systems will drive the uptake of alternative sanitation solutions. This is coupled with the continued development of retail and office space.<br> The Public Market is estimated to have a total of 264,401 toilets present in public schools across South Africa. However, a total of 665,000 toilets is required to fulfil the Norms &amp; Standards requirements for public schools. This creates a significant deficit of 400,000 toilets that require upgrades, replacements, or new installation.