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BW Businessworld

‘We Are All About Water’

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The $4-billion Nalco is among the world's largest water treatment and recycling solutions companies. The US-based company helps business use water more efficiently and has customers cutting across sectors such as paper, steel, hospitality and refining.

With large swathes of the developing world experiencing water stress, Nalco, under chairman and CEO Erik Fyrwald, is moving quickly to focus on countries such as India and China. In India, where Nalco's business grew 35 per cent in 2010, Fyrwald also sees Nalco reaching out to governments that are building or improving municipal water infrastructure through public-private partnerships. He tells BW's Gauri Kamath that India is high on the company's agenda.


What difference can a business using water wisely make to India's water issues?
Industry is a big user of water. When there is not enough water available, how can a company protect its investment by being able to use less water and not have to reduce production because of water shortages? That is a very important economic driver. So progressive companies are thinking ahead.

Will focusing on their systems and processes be enough if other users are not improving at the same rate?
When companies are building their facilities, they can do so efficiently so that it has a good economic return. It is not like they are sacrificing cost to save water. They can use less water, be more energy efficient, and reduce cost. That's the real goal. It is also helpful if the government promotes good water use practices and if industry shares what is the best water-efficient practice for their products.

What will drive growth in India — marketing what you have or customising solutions?
Earlier we were trying to leverage our global capability in India, but the market is growing so fast, and here is an opportunity to develop solutions for India that the rest of the world will need.

Established: 1928
Headquarters: Naperville
CEO: Erik Fyrwald
Main businesses: Industrial water, energy and air applications
Presence: In 150 countries
Employees: More than 7,000

For example, we have an automation technology called 3D TRASAR to monitor water systems round the clock. This makes sure that just the right amounts of additives are being used and to detect if there are any problems in the water system.

We have about 16,000 units deployed around the world. All the remote monitoring is in our technology development centre in Pune by a staff of about 100 technologists. Their expertise in understanding how to solve problems is useful for the Indian market. Because we monitor water systems around the world, we can understand what is best-in-class and learn.

Then, take those learnings and apply them to somebody who wants to build a plant in India for the paper market, the steel market, refining or any industry. Now, we can advance that technology here for India, and leverage it to the rest of the world.

Do you see an opportunity in municipal water projects?
I do. And we don't do that in other parts of the world. Historically, our focus has only been on industrial water treatment. But India is different — the issue is so important and the investment will be large. Some of the capabilities we have — servicing reverse osmosis membrane systems, using automation to make sure they are optimised, etc. — can be important in municipal projects as well. Our model in India may develop to be broader than in the rest of the world.

What about the potable water segment?
Not a focus for us, but I am specially interested in the whole desalination area, because maybe there is some chance for us to bring our capabilities in the area by supporting others to make sure that desalination operations can work optimally.

GE spent $4 billion on acquisitions in the past decade in the water area. How do you stay ahead?
I think the benefit that Nalco has is our company is all about water — we think about it all the time. Our focus is a very powerful motivator to keep getting better. Now, there is tough competition; more companies want to get into the water business. But our goal is to get better faster than anybody. And so participating aggressively in an important, fast-growing market like India is a great thing for us to do. We will put more emphasis on India because it's good for our global business. It's how we can keep working to stay a leader.

Why do you consider the oil and gas industry an important customer?
There is significant water use in this industry and it is also very sophisticated in operations to reuse water. Also, in oil production, a lot of times water will come out with the oil. We pull the water out of the oil and clean up the water so that it can go back into the environment. Our ability to do that efficiently attracts us to that sector.

Your oil spill dispersant Corexit used in the BP oil spill has been controversial for its alleged toxicity...
If you listen to the US government, a bulk of environmental experts, and oil company senior executives, the consensus is that the use of oil spill dispersants and specifically Corexit was extremely effective in reducing the amount of oil that hit the shores.

Large amounts of oil were dispersed into small particles that naturally occurring bacteria were able to eat. And that kept the oil from doing environmental damage. You would not want to put chemicals into the ocean if you didn't need to, but the benefits of doing that far outweighed the negatives. The material in Corexit is less toxic than dish-washing liquid.

(This story was published in Businessworld Issue Dated 31-01-2011)