Thermax to focus on water treatment biz

After power equipment, engineering major Thermax is strengthening its presence in the water treatment business.

"If power is the theme today, we believe the next big story would be water," said Managing Director and Chief Executive M S Unnikrishnan, in a post-press meet chat with Business Standard.

The water infrastructure in SEZs and new cities could come through public-private partnership.

"We are willing to go beyond our role as equipment suppliers and can even do these projects on a turnkey basis," said Unnikrishnan. Thermax already has presence in all three segments of the water treatment business.

The company will look at opportunities from the development of new cities, special economic zones (SEZ) and upgradation of the municipal water treatment facilities. The Pune-based company is trying to position itself as the preferred equipment supplier across different segments.

The company is strengthening its presence in the Rs 800-crore point-of-consumption market, which involves localised treatment of water by setting up a distribution channel. The company has 10 per cent market share in the business, which is growing 20 per cent annually, driven by urbanisation.

Thermax plans to consolidate its position in the Rs 1,200-crore industrial water treatment business, where again it enjoys a 10 per cent market share. Increasing pollution of ground water is helping the business grow 15 per cent a year.

In both these businesses, Thermax has to compete with aggressive competitors such as Ion Exchange, Va Tech Wabag, Doshi Ion and Driplex Water Engineering. In the point-of-consumption market, it has to also compete with regional players.

Thermax is also present in municipal water and sewage treatment space. "Our bio-reactor needs only half the land required for conventional plants," said Unnikrishnan.

Under the Jawaharlal Nehru Urban Renewal Mission (JNURM), which is funding urban infrastructure, nearly Rs 1,500 crore is disbursed to municipalities a year. The funding through this channel is growing each year.

Thermax has technologies that qualify for JNURM projects, and plans to form a consortium with local civil contractors to bid for such projects in Gujarat, Maharashtra and the southern states. "We are looking for profitable and sustained growth. Water treatment could be one of the growth drivers," said Unnikrishnan.

The company could also partner multinationals such as GE and Siemens.

"We can also supply to them and become EPC (engineering procurement and construction), O&M (operations & maintenance) contractors."

Thermax is also consolidating its air pollution equipment business. In October 2007, it entered into a technical alliance with Balcke-Durr of Germany for electrostatic precipitators.

With higher level of compliance for air pollution norms among cement, steel and power plants, among others, the demand for air pollution equipment is growing 30 per cent a year.