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France's Veolia forays into nuclear waste cleanup in Japan

Veolia CEO Antoine Frerot talks about the company's plans in Japan in a recent interview with The Nikkei in Paris.

PARIS -- Veolia, the world's leading water treatment company, sees an opportunity to expand in Japan by processing low-level radioactive waste, CEO Antoine Frerot said in a recent interview with The Nikkei.

     Veolia anticipates strong demand in Japan, where a number of nuclear power plants are expected to be decommissioned in the coming years. The company's endeavor will center on newly acquired Kurion, a U.S. business with expertise in treating low-level radioactive waste.

     The French company estimates that waste disposal and other businesses related to decommissioning nuclear reactors will be worth $200 billion by 2030. Veolia aims to generate $400 million in sales by 2020 from those businesses, focusing on processing of low-level waste, Frerot said. He positions Japan, the U.S., France and the U.K. as key markets, with more than half of demand expected to come from those countries as more reactors become too old to operate safely.

     In decommissioning reactors, low-level radioactive materials such as concrete and various equipment account for more than 90% of waste in terms of weight. Veolia aims to focus on handling such waste, rather than taking down reactors and dealing with highly radioactive materials.

     "Kurion is currently the only company capable of concentrating and capturing low-level radioactive waste at an acceptable cost. Its skills also fit very well with those of Veolia," Frerot said. "We will offer [Japanese] electricity companies a service that includes cleaning up and treating [such waste] at an affordable cost."

     The CEO cited contaminated soil around Tokyo Electric Power Co. Holdings' Fukushima Daiichi power plant, the site of the March 2011 nuclear disaster.

     "Veolia, with Kurion, is capable of treating and decontaminating that large volume of soil so that [the area] can become habitable again," he said. "We will offer these services to the public authorities."

More opportunities in water

Veolia first ventured into Japan with its water services in 2002.

     "We are capable of helping cities improve the performance of their water networks, the quality of the water distributed, control over costs and investments and customer service," Frerot said, indicating the company's desire to expand this side of its business in Japan as well.

     "We are currently the only non-Japanese company working in Japan's water industry," he said. "We are the only private-sector foreign company to have won a public service concession, the drinking water contract in Hakone [in Kanagawa Prefecture] in 2014."

     "Developing our business in Japan is a genuine ambition of ours," the CEO said. "In particular, we think we can provide water management services at a more attractive price. I hope that the value we add will convince municipal clients to work with us."

Asian ambition

Veolia also looks to expand in other Asian countries. China, where Veolia has operated since the mid-1990s, is the company's biggest market in Asia.

     "We have developed a large business managing water services for major cities," Frerot said. "We now want to develop our activities relating to the circular economy [i.e., an industrial economy that produces little waste] and our services for large manufacturers: treating hazardous waste, managing the water cycle at industrial parks and managing heating systems."

     In South Korea, the company is focusing on industrial water management, but "we want to develop our biomass, energy efficiency and hazardous-waste treatment businesses" as well, he said.

     "We expect our Asian revenue to grow by 17% between 2015 and 2018, with annual revenue growth of 30% in industrial contracts alone," Frerot said. "We are planning to expand our business in all existing Asian markets" including India and Singapore.

     In addition to managing water and sewage-processing plants in roughly 7,500 locations worldwide, Veolia offers waste-processing and renewable-energy businesses in various countries. The company's sales totaled 25 billion euros ($28.2 billion) in 2015.

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