Beijing Water

Suez Environment to invest more in China

(April 16, 2011) Paris-based Suez Environment plans to invest more in the Chinese market, aiming for a double-digit growth this year, said the head of the world’s second biggest water and waste utility company.

“China has always been an important part of our global business strategy as water shortage is becoming a major issue in the country,” said Jean-Louis Chaussade, chief executive officer of the global market of the company, without revealing more details on the amount of investment in China.

But he told China Daily that the company plans to invest about 1.3 to 1.4 billion euros in the global market this year.

Chaussade was speaking as Suez Environment posted a 40 percent increase in net profit to 565 million euros ($770 million) and an approximate 13 percent growth in revenue to 13.87 billion euros for 2010.

The company said the total turnover in the Chinese market in 2010 was 1 billion euros with an increase of more than 10 percent year-on-year.

China, which presents 21 percent of the world’s population, has only 7 percent of water resource. The water shortage in China is likely to worsen due to the growing population in big cities, Chaussade said.

As more and more people from rural area are moving to big cities in China, it’s estimated that the population in cities and large towns is going to reach two-thirds of the total population in the near future, according to the company.

“At that time there will be more needs for the clean water and water management is going to be a key issue in China if the government wants to keep the economic growth,” he said.

In China, where state-owned companies are major players of the water industry, setting up joint ventures with SOEs becomes an entry point for the private operators such as Suez Environment.

The French company, which now owns 32 joint ventures in China, said its earnings are also boosted by new projects and new contracts with local water companies.

In 2010, through its subsidiary Sino French Water, Suez Environment invested 250 million yuan to form a joint venture with Chongqing Water Group Co Ltd and Changshou Chemical Industrial Park Development and Construction Co Ltd to provide water services to an industrial park in Chongqing, a southwestern city in China.

“The consumption of water in Chongqing is growing 14 percent in one year,” said Chaussade. “Only by volumes, the growth is there. From time to time our tariff will increase according to the needs for the investment,” he said.

Lu Chang, China Daily, April 16, 2011

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