The Journal The Authority on Global Business in Japan

Water—it’s crucial for life, as well as for a smoothly functioning economy. Because water resources are a vital and basic part of infrastructure, large projects are teeming with activity, and commercial opportunities in the water business are bubbling up around the world.

Infrastructure companies are stepping up the battle for business related to water. Japanese companies are not on the scale of water majors like France’s Suez S.A. or Veolia Environnement S.A., but they have a presence in the market for the necessary equipment and technology.

The main plant of Ebara Corp.—the largest domestic manufacturer of commercial pumps—is located in Futtsu, Chiba Prefecture, across Tokyo Bay from the capital. Lined up outside the maker’s building are parts and materials for pumps that weigh around five tons, and measure about two meters in diameter and three meters in length.

Each of the finished products sucks in enough water in 30 seconds to fill a 25-meter pool. The first of the pumps was completed in June 2015 and the last of the 12 on order is slated to be finished before the end of 2016. Their ultimate destination is Jazan, western Saudi Arabia.

“We might make pumps this large once a year,” says a worker in the production management department.

Including design time, the manufacturing process takes about a year, with the most difficult part reportedly being mounting the rotating shafts linked to the impeller.

Being off by only a few millimeters can cause friction and generate heat, resulting in the shaft scorching the pump itself, which in turn necessitates replacement of parts. Yet manually adjusting the impeller’s balance requires considerable expertise.

Industrial lifeblood
At Jazan, an industrial park is being prepared where the Saudi government hopes to cultivate industry, and coal gasification facilities and an oil refinery will be constructed.

Ebara’s pumps will be used in large-scale facilities that draw in seawater and process it into commercial-grade fresh water. The company will supply a total of 28 pumps with an estimated value of around ¥4.5 billion.

High-pressure pumps will be the heart of the site, and the water they will help circulate will be the lifeblood flowing through the entire industrial park.

The water of the Red Sea features high temperatures and salt content, which demand strict durability parameters. Ebara in 2002 became the first in the world to develop a stainless steel pump that is both lightweight and corrosion-resistant, and has won numerous orders for it.

Among the orders it has received is one in 2013, for 24 pumps for a water pipeline linking a seawater desalination plant in Yanbu, in western Saudi Arabia, with the holy city of Medina. The pumps send water some 600 kilometers, and 10 of them can blow water to a height of 500 meters.

Ebara President Toichi Maeda said that pumps like those of his company, capable of pumping 5,000 cubic meters of water an hour, “can only be made by five or six companies worldwide.”

In Japan, it is often said that “water and safety are free,” but that sentiment isn’t shared by the entire world. Many regions suffer from water shortages or deteriorating water quality, and such problems require resolution at the national level.

The worse such problems become, the more business opportunities arise, in terms of desalinating seawater and improving water treatment and circulation.

Ebara’s Futtsu plant supplies many projects in the Middle East. It is frequently visited by officials from Saudi Arabia’s state-owned petroleum company Saudi Aramco and Saudi desalination company Saline Water Conversion Corporation. Each time, one room in the Ebara office is quickly converted into an Islamic prayer room for the visitors.

A woman collects drinking water from a hand pump in Dhaka, Bangladesh.

A woman collects drinking water from a hand pump in Dhaka, Bangladesh.

Demanding durability
Customers demand products that won’t break down after even 40 years of continual use. If a supplier can win their confidence, that company will continue to be chosen for orders.

An official in Ebara’s Europe, US, and Middle East sales division emphasized that the company enjoys a “30 percent share of the Middle East’s large-pump market.” Sales to the Middle East are targeted at ¥23.4 billion in fiscal 2016, a 56 percent jump from fiscal 2013.

Ebara is also setting its sights on China. Wanjiazhai in Shanxi Province is a fortified town, built in ancient times to keep out invaders. In 1999, Ebara, along with Toshiba Corp., received an order for 15 pumps for a pipeline that transports water from the Yellow River in this area to the provincial capital of Taiyuan.

The pipeline stretches some 270 kilometers, with an elevation difference of 630 meters. Because the water contains so much sand that it appears yellow, high durability is required of the pumps. Pulling this off was a critical starting point for Ebara to develop a presence in China.

The Japanese company also supplied 10 pumps from 2011 to 2013 for the Eastern Route Project pipeline, in eastern China, which was planned to divert water from Yangzhou in the central part of the country to Beijing. European companies landed the orders for the Central Route, and competition is fierce for the upcoming Western Route.

In 2015, Chinese authorities opened bidding for about 50 cutting-edge coal-fired power plants known as “ultra-supercritical models.” More than 30 percent of the pumps for such plants were awarded to Ebara. They require high-pressure technology capable of pumping water to a height of 4,000 meters.

An official in the global product sales division expressed confidence that Ebara “has the top share of the Chinese market for large pumps.”

Ebara is not alone in pursuing projects at the national level. Engineering companies do the same. The main stage is, naturally, the Middle East, where there has been a series of projects to build large-scale power generation and desalination plants that simultaneously produce water and electricity.

At a plant in Qatar for which Mitsubishi Corp. and Tokyo Electric Power Co. won orders in 2015, and which is intended to go into operation in 2017, Hitachi Zosen is in charge of seawater desalination systems. The company completed another system in Qatar last fall, and is steadily compiling a track record in the Middle East.

Plant and facilities builder JGC Corporation is also increasing its presence in this field. Its investments in water and power-related fields now exceed ¥30 billion.

It has even invested in desalination and power facilities at one of the world’s largest petrochemical plants, run by Aramco and Sumitomo Chemical in western Saudi Arabia.

The company in which it has invested will sell water and power to a state-owned company for roughly 20 years. Water will be cheap, at about $1 per ton, but the project will be highly profitable because the seawater and land are free of charge.

“Middle Eastern desalination and power businesses are safe assets,” says an official in the company’s global marketing division. Within two to three years, the aim is to increase investments to ¥50–¥60 billion, and have 90 workers, 50 percent more than at present.

Some forecasts project that the worldwide water business will grow at nearly 4 percent per year. If this cuts into business at the national level, even more long-lasting profits can be anticipated.

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Ebara's Futtsu plant supplies many projects in the Middle East.