Can Ontario companies tap into China’s new US$320 billion cleantech commitment?
Following China’s 2013 strategic action plan on air pollution, its wastewater sector has now been put on the agenda and the country’s sector action plan is expected to launch in early 2015. There is no doubt that this will give China’s cleantech sector a strong boost.
Will Ontario companies be able to catch the wave? How can they tap into this lucrative market?
According to Netscribes, the amount of discharged wastewater in China has been increasing steadily from 41.5 billion tons in 2000 to 68.5 billion tons in 2012. Survey data released by China’s environmental protection department shows that, in 2012, China’s 10 major river systems and 62 major freshwater lakes fell short of drinking water quality at 31% and 39% respectively. This has posed serious health threats to the population.
In China, the main sources of water pollution include:
- industry (chemical, organic and thermal waste);
- municipalities (largely sewage, consisting of human waste, other organic waste, detergents etc.); and
- agriculture (animal waste, pesticides and fertilizers).
It is estimated that the upcoming Wastewater National Action Plan will inject over US$320 billion in the sector. The investment will be mainly put toward building new wastewater treatment facilities, upgrading existing wastewater treatment plants, constructing pipelines and treating village and town sewage. Technologies that can improve the re-usage rate of wastewater or that promote efficient infrastructure operations would be of strong interest to the market.
Encouraged by the promising opportunities and government supports, many foreign multinational companies have already begun buying into China’s wastewater market through active mergers and acquisitions. Interestingly, there are also a growing number of companies and investors in China going abroad to look for innovative technologies and assets.
Beijing Capital Group, which is one of the biggest wastewater treatment companies in China, acquired Transpacific New Zealand, that country’s largest solid waste treatment company, for US$800 million in 2014. It was China’s biggest overseas cleantech acquisition in its history. Another key player, Beijing Enterprises Water Group Ltd., acquired Veolia Water Technologies’ assets in Portugal with EU$95 million in 2013. Shanghai Safbon Water Service Co. Ltd. is also actively pursuing foreign acquisition targets in 2015.
In the third installment from MaRS’ Going Global Series – China, we will examine China’s cleantech market opportunities in more detail and the implications for Ontario companies. The report will be available in April—stay tuned!
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Xuefei Mao provides market insights to Technology Transfer communities in Ontario as part of the MaRS Market Intelligence team. She has extensive market research experience in the commercialization space across different industry sectors and is cross-appointed from the University of Toronto. See more…