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Biotechnology

Japanese manufacturers dip into global water business

At Ebara's plant in Futtsu, Chiba Prefecture, three large members for enormous pumps are bolted together in a row.

TOKYO   Water -- it's crucial for life, as well as for a smoothly functioning economy. Because water resources are a vital and basic part of infrastructure, large projects are teeming with activity, and commercial opportunities in the water business are bubbling up around the world. 

     Infrastructure companies are stepping up the battle for business related to water. Japanese companies are not on the scale of water majors like France's Suez or Veolia, but they have a presence in the market for the necessary equipment and technology. 

     The main plant of Ebara -- the largest domestic manufacturer of commercial pumps -- is located in Futtsu, Chiba Prefecture, near Tokyo. Lined up along the side of the building are parts and materials for pumps that weigh around five tons, and measure about two meters in diameter and three meters long. Each of the finished products sucks in enough water in 30 seconds to fill a 25-meter pool. The first of the pumps was completed in June and the last of the 12 is slated to be finished before year's end. Their ultimate destination is Jazan, western Saudi Arabia.

     "We might make pumps this large once a year," said a worker in the production management department. Including design time, the process takes around a year, the most difficult part reportedly being mounting the rotating shafts linked to the impeller. Being off by only a few millimeters can cause friction to generate heat, resulting in the shaft scorching the pump itself which in turn necessitates replacement of parts. Manually adjusting the impeller's balance requires considerable expertise.

INDUSTRIAL LIFEBLOOD   At Jazan, an industrial park is being prepared where the Saudi government hopes to cultivate industry, and coal gasification facilities and an oil refinery will be constructed. Ebara's pumps will be used in large-scale facilities that draw in seawater and process it into commercial-grade fresh water. The company will supply a total of 28 pumps with an estimated value of around 4.5 billion yen ($39.5 million). High-pressure pumps will be the heart of the site, and the water they will help circulate will be like lifeblood flowing through the entire industrial park.

     The water of the Red Sea features high temperatures and salt content, which demand strict durability parameters. Ebara in 2002 became the first in the world to develop a stainless steel pump that is both lightweight and corrosion-resistant, and has won numerous orders for it.

     Among the orders it has received was an order in 2013 for 24 pumps for a water pipeline linking a seawater desalination plant in Yanbu in western Saudi Arabia with the holy city of Medina. The pumps send water some 600km, and 10 of them can blow water to a height of 500 meters. Ebara President Toichi Maeda said that pumps like his company's, capable of pumping 5,000 cu. meters of water an hour, "can only be made by five or six companies worldwide."

     In Japan, they say that "water and safety are free," but that sentiment isn't shared by the entire world. Many regions suffer from water shortages or deteriorating water quality, and such problems become issues to be resolved at the national level. The worse such problems become, the more business opportunities arise, in desalinating seawater and improving water treatment and circulation.

     Ebara's Futtsu plant supplies many projects to the Middle East. It is frequently visited by officials from Saudi Arabia's state-owned petroleum company Saudi Aramco and Saudi desalination company Saline Water Conversion Corporation (SWCC). Each time, one room in the office is quickly converted into an Islamic prayer room for the visitors.

DEMANDING DURABILITY   Customers demand products that won't break down after even 40 years of continual use. If a supplier can win their confidence, that company will continue to be chosen for orders. An official in Ebara's Europe, U.S. and Middle East sales division emphasized that the company enjoys a "30% share of the Middle East's large pump market." Sales to the Middle East are targeted at 23.4 billion yen in fiscal 2016, a 56% jump from fiscal 2013.

     Ebara is also setting its sights on China. Wanjiazhai in Shanxi Province is a fortified town built in ancient times to keep out foreign tribes. Back in 1999, Ebara, along with Toshiba, received an order for 15 pumps for a pipeline that transports water from the Yellow River in this area to the provincial capital of Taiyuan.

     The pipeline stretches some 270km, with an elevation difference of 630m. Because the water contains so much sand that it appears yellow, high durability is required of the pumps. Pulling this off was a critical starting point for Ebara to exhibit a presence in China.

     The Japanese company also supplied 10 pumps from 2011 to 2013 for the "Eastern Route Project" pipeline in eastern China that was planned to divert water from Yangzhou in the central part of the country to Beijing. European companies landed the orders for the "Central Route," and competition is fierce for the upcoming "Western Route."

     In 2015, Chinese authority opened bidding for around 50 cutting-edge coal-fired power plants known as "ultra-supercritical models." More than 30% of the pumps for them were awarded to Ebara. They require high-pressure technology capable of pumping water to a height of 4,000m. An official in the global product sales division expressed confidence that Ebara "has the top share of the Chinese market for large pumps."

     Ebara is not alone in pursuing projects at the national level. Engineering companies do the same. The main stage is naturally the Middle East, where there has been a series of projects to build large-scale power generation and desalination plants that produce water and electricity at the same time.

     At a plant in Qatar for which Mitsubishi Corp. and Tokyo Electric Power won orders in 2015 and which is intended to go into operation in 2017, Hitachi Zosen is in charge of seawater desalination systems. The company completed another system in Qatar last fall and is steadily compiling a track record in the Middle East. 

     JGC is also increasing its presence in this field. Its investments in water and power-related fields now exceed 30 billion yen. It has even invested in desalination and power facilities at one of the world's largest petrochemical plants, which is run by Aramco and Sumitomo Chemical in western Saudi Arabia. The company in which it has invested will sell water and power to a state-owned company for around 20 years. Water will be cheap at around $1 per ton, but the project will be highly profitable because the seawater and land are free of charge.

     "Middle Eastern desalination and power businesses are safe assets," said an official at the company's global marketing division. Within two to three years, the aim is to increase the balance of investments to 50-60 billion yen, and have 90 workers, 50% more than at present.

     Some forecasts project that the worldwide water business will grow at nearly 4% per year. If this cuts into business at the national level, even more long-lasting profits can be anticipated.

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