In interaction with Mr. Rajneesh Chopra – Global Head Business Development, VA Tech Wabag Ltd
Speaking with DSIJ, Mr. Rajneesh Chopra – Global Head Business Development, VA Tech Wabag Ltd, states that VA Tech WABAG, a leading Indian MNC and a pure-play water technology company, has been maintaining a lead in this sector with its emphasis on research and development, innovations and the experience gained from its global projects. Following is the detailed discussion.
What are your top three key strategic business priorities?
WABAG is a leading Indian MNC and a pure-play water technology company. Backed by our decades of experience and technical expertise, we are focused towards honouring our motto of providing sustainable solutions for a better life. Our top three key strategic business priorities, evaluating the current global scenario post-pandemic and our business interests are as follows: Enhanced focus on digitization, automation and the use of artificial intelligence to build plants with enhanced performance while operating with optimised manpower. Given our strong order book, which currently stands at Rs 10,700 crore, we will focus on scaling up execution of orders to ensure timely completion. Being a technology player and backed by a healthy order book, going forward we will look to selectively target the high technology orders to strengthen our order book as well as to improve our margins.
What is the growth outlook for your company in the coming quarters?
As you are aware, VA Tech WABAG is a pure-play water technology company having a multinational presence and spread across four continents and over 20 countries. WABAG has executed projects in over 30 countries across various segments. Post the pandemic, the entire water and sanitation sector has assumed increased importance. Water is now an imperative factor for health and sanitation. Thereby, most of the governments in various countries, including our home country India, now have enhanced focus on water and sanitation, more than what it has been historically.
In our home country India, the outlook is extremely positive, driven mainly by the government’s initiatives, which were reaffirmed in the recent Union Budget. The ambitious Jal Jeevan Mission with an outlay of Rs 2.87 lakh crore which involves resource augmentation, improved focus on recycle and reuse and leveraging the vast coastline for desalination are a few key segments where technology players like WABAG will have a key role to play. The ‘Namami Gange’ programme, under which WABAG has bagged a few orders, is now planned to be replicated across major Indian rivers, which will again open up huge avenues for wastewater treatment and management.
On a global level, compliance to United Nations’ Sustainable Development Goals (SDGs), especially SDG 6 (clean water and sanitation) and emphasis on environment, sustainability and governance (ESG) are expected to be the key growth drivers. Once the market starts growing, especially in India where we foresee double-digit growth YoY, being a market leader we would like to retain our leadership position on the technology front and like to grow in line with the market growth.
What is your research and development budget and is it expected to increase in 2021?
WABAG over the years has been known for its technical expertise worldwide, backed by comprehensive research and development and proven global references which have successfully demonstrated our technological prowess. Currently we have three research and development centres – Chennai in India, Vienna and Switzerland. We have tie-ups with several leading development partners, which include Vienna University, IWW Water Centre, Istanbul Technical University, to name a few. WABAG currently holds about 90 patents to its name across the fields of water treatment, wastewater treatment, water reclamation and sludge treatment.
In the present scenario, especially post-pandemic, there is an enhanced focus on digitization and automation in water sector. We have been allocating a significant portion of our revenue for research and development and going forward we will be prioritizing our emphasis on research and development, driven by our focus on incorporating digitization in our business and infusing innovation, knowledge, data and expertise. We have invested in real-time monitoring remotely in the past and that has paid rich dividends especially during the pandemic phase.
Going forward, investment in automation, digitization and AI will help us build plants with enhanced performance and optimised operations. Reiterating our focus on research and development, WABAG has emerged as a global leader in the removal of micro pollutants, an area which requires state-of-the-art advanced technologies. In Switzerland, which is the first country to pass a legislation mandating removal of micro pollutants, WABAG has implemented seven plants with a cumulative capacity of 1,50,000 cubic metres per day with a further 12 plants under execution.
What kind of opportunity does WABAG see in waste water management and the ‘Clean Ganga’ project?
Wastewater management in India is an extremely critical issue. At present, only 37 per cent of the total wastewater generated in India is treated. This leaves a huge gap, wherein almost two-thirds of the wastewater generated in India today has to be treated. When it comes to wastewater treatment and management, the Clean Ganga project has been an extremely successful model in ensuring pollution abatement across the river Ganga belt. The model, under which WABAG has been one of the frontrunners, has been an example of successful execution of wastewater treatment. As mentioned earlier, drawing from the success of the Clean Ganga project, the government now plans to replicate it across various rivers under NRCD, starting off with rivers which are the most polluted.
WABAG will be a serious player when it comes to the hybrid annuity model (HAM) projects under Namami Gange. HAM is fast emerging as the preferred model, and we expect this model to be replicated across various Indian states in the water sector. Hence, WABAG will definitely be a frontrunner to play its role in pollution abatement and river rejuvenation. Being a technology player, WABAG will strive towards making its infrastructure sustainable by incorporating the resource recovery model by reusing the treated water, utilising the biogas generated from sludge to generate green energy and by converting the treated sludge into useful manure or fuel for further application.
What is the future of waste water management solutions business?
As mentioned earlier, there is a substantial gap in terms of wastewater treatment in India. Without doubt this opens up a huge market in terms of wastewater treatment in India. When it comes to management of wastewater, the ‘one city, one operator’ model, under which WABAG is managing the wastewater infrastructure of the cities of Agra and Ghaziabad, is definitely the way forward. WABAG was entrusted with the operation and maintenance of wastewater infrastructure of these two cities where we are responsible not only for the treatment facilities, but also the pumping stations, manholes and sewer network.
The one city, one operator model is a win-win situation for the wastewater management companies as well as the urban local bodies since they are able to compress and optimise both the time and cost involved in the development, rehabilitation and operations of the existing and new infrastructure. Hence, the time and cost of implementation is reduced since it follows a single tender and single performance contract. This also brings about increased accountability and enhanced performance to provide sanitation services to citizens. We have gone on record to say that this will be the next multi-billion-dollar segment in water and sanitation sector in India for the industry.
What are your key growth drivers?
WABAG has been growing consistently and going forward we look at continued growth in line with the market. The key growth drivers, as listed below, are governed by a multiple factors such as revised regulatory norms and key government initiatives in the markets where we are present. We foresee that the factors mentioned below will help further consolidate our position as technology leader.
In the industrial segment, zero liquid discharge (ZLD) is going to be mandated, in which 100 per cent of water has to be recycled and reused to make the large industries self-sufficient in terms of water.
Industries located on the coastal belt have now started to adopt captive desalination as a sustainable, affordable and reliable source of water.
The Government of India’s ambitious plan to provide water under Jal Jeevan Mission, for which a massive outlay of Rs 2.87 lakh crore has been allocated over the next five years, will require significant need for resource augmentation with 20 per cent of demand to be met by recycled water.
Egypt’s mega desalination programme estimated at USD 15 billion, under which 10,481 MLD of desalination capacity has to be created over the next three decades.
Kingdom of Saudi Arabia’s large-scale expansion of desalination to meet the increasing water demand.
One city, one operator model in India, which we foresee as the next multi-billion dollar segment.
Draft wastewater regulations approved in Vietnam, compliance to which mandates an expenditure of USD 8-10 billion.
Substantial outlay of USD 6.5 billion in Philippines for wastewater collection and treatment with 16 large-scale greenfield WWTPs in the coming years.
What steps are being taken to expand internationally?
If you look at the history of WABAG, we have been an international organisation since our inception in Germany. In a proud feat for us, the Indian subsidiary of VA Tech WABAG acquired the erstwhile parent company to establish the Indian MNC, which is now a renowned company. As you might be aware, our business is now spread across the India cluster – India and SE Asia, the Middle East and Africa (MEA) cluster and Europe cluster, with footprints across 30 countries. Also, we will focus on multilateral funded and G2G projects. We have in the past said that we want the contribution from our overseas business to increase, and we have been working to ensure the same, expanding our overseas business. We have our footprints across 30 countries, and even our order book for FY21 till date has substantial contribution from our overseas projects with WABAG securing projects across Saudi Arabia, Tunisia, Libya and Switzerland, which is evident of our focus to expand our overseas business and in turn ensure an increase in contribution from our overseas business.