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French water service firm Veolia Water is ramping up efforts to secure industrial wastewater treatment deals with corporate customers in China.

So said Antoine Frerot, the company's chief executive officer. "We have been focusing on municipal water service projects in China for many years, but the new deals we sign in the future will be more balanced between municipal business and corporate projects," he said.

Frerot said Veolia Water's business in China would account for 10 percent of the firm's global business in 10 years. The China business now contributes 3 percent of Veolia Water's global sales, but it has seen double-digit growth per annum in recent years, much faster than the average rate of other markets.

Frerot made the remarks on the sidelines of the Fifth World Water Congress being held in Beijing from September 10 to 14.

The French water service company's determination to diversify its business portfolio in China comes at a time when the government is poised to establish a market mechanism in the wastewater treatment sector to meet its target for curbing water pollution in the 11th Five-Year Plan (2006-10) period.

The government encourages industrial enterprises to outsource their wastewater treatment to professional contractors by tender, according to a document issued by the State Council at the end of last year.

Of the 19 projects Veolia Water has signed in China, only two are wastewater treatment projects with corporate clients.

Veolia Water signed a partnership contract at the beginning of this year with Beijing Yanshan PetroChemicals (BYP), a subsidiary of the nation's largest oil refiner China Petroleum & Chemical Corp (Sinopec).

Under the 25-year agreement, Veolia Water and BYP set up a 50-50 joint venture to operate facilities to collect, treat and recycle industrial wastewater at BYP, located 50 kilometers to the southwest of Beijing. The joint venture is managed by Veolia Water and is expected to generate revenue of 580 euros (US$736 million).

The company also won a 15-year outsourcing contract in 2003 to manage the entire water system at Michelin's tyre manufacturing plant in Shanghai.

The 150-year-old company has signed three projects on average every year in China since 2002, making it the most active foreign water company in the country.

"We are very satisfied with that speed and hope to maintain the same pace in the next 10 years," Frerot said.

Veolia Water's latest contract in China is a 30-year agreement to manage water production, distribution and customer relations in Liuzhou, south China's Guangxi Zhuang Autonomous Region. The contract was signed on September 5 and will take effect from the end of this year.

The deal is Veolia Water's fifth full water service contract in China. The other four projects are in Shanghai, Shenzhen, Changzhou of Jiangsu Province, and Kunming, Yunnan Province.

(China Daily September 12, 2006)