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Sujit Doshi,
Director, Doshion Limited. |
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Managing Water - The Entrepreneur Way
While the story post-economic-reform of various segments of the Indian industry - IT, Pharmaceuticals, Ambanis, Tatas- is well-documented, few know about the emerging water business in India. The country, which, in its myths, considered water a sacred commodity, has now shed its inhibitions & is registering bumper trade in water. With quality of water deteriorating across the country, young entrepreneurs & qualified professionals are sensing blood in this segment.
To understand business in water & related issues, Ashutosh Bhardwaj interacted with Sujit Doshi, Director Doshion Limited, amongst the top players in water treatment. Doshion was earlier Doshi Chemical Ion Exchange. Ion exchange is one of the processes for purifying water. With time, new technologies emerged & the company moved beyond ion exchange technology. Since the company is always on, hence Doshion.
Sujit observes that water business has a great future in India. Many big players including MNCs are entering this segment. Nevertheless, it is still a sellers' market.
A missing link is technological innovation. Indian companies have comfortably borrowed technology from West, it's time they think for indigenous solutions, a fact, Doshi also admits.
Water apart, Sujit is an extremely amiable person. A creative person at heart, he once actively participated in theatre. Though involved in family business today, he constantly finds his calling in the world of stage & drama.
You are in the business of water management-a business inconceivable & unimaginable a decade before. Today it is amongst the most promising business venture. Why & when did you think of doing business in water?
This is a vision of my father. He was in the business of chemical technology. He imported lots of equipments to treat water. Being a Gujarati entrepreneur, he thought about manufacturing chemicals for water treatment. That's how we started into the ion exchange business. Later, with forward linkages & entry of the next generation into business, we developed specialization in water. We are five brothers - all engineers. We knew that the time would come when water would become a precious commodity. The vision of my father has paid off well.
What is the need & requirement of business in water management in India?
The need of business in water management corresponds with the need of water management in daily life. Water is required as a crucial commodity in every industry, except, probably only in banking & finance industry. Be it pharmaceutical, power, beverage or paper industry - water is required everywhere. Quality of water & water management affects everyone.
Professionals are required to research it, manage it & customize it to meet the requirements of various sectors. Quality of water required for drinking is entirely different from water quality required for the power industry. Water business tries to understand the requirement & offer a solution, which is optimum, and uses right approach for water treatment corresponding to the requirement of each sector.
What is the present status of water business in India?
Water as a business is one of the fastest growing business of
India. It is growing at a rate of 20-25% per annum. Many
companies are entering. Still, I would say the demand &
supply ratio is in favour of supply.
Favour of supply?
Suppliers are less, while demand is more. It is still a sellers'
market. Lot more is possible in water segment. Whole gamut
of municipal corporations are taking services of professional
companies for water treatment, like we have in Middle East. Entire
market is opening up. More players are required. MNCs are
coming in. Companies we never thought about, are now entering
into water treatment. GE, companies from Singapore, Ambanis,
Jindals are entering into water treatment. Its a very good sign. It
shows the untapped potential.
Are you worried about the entry of these big fish in the market?
I think there is a place for everyone. Larger players will need
smaller ones & vice versa. There would be sub-contracting
models. There would be vendor-purchaser relationship. Many of
these will require vendors and partners for technology and
contracting. The market size itself is very big, India's population is
so large, which gives space for everyone.
Technology will be the key at the end of the day.
What is the water business today in monetary terms?
It is difficult to estimate quantum of business in water because it is present with every sector. Yet, my estimate puts it at around 1500 crores a year.
You mentioned Middle East, which is an example of water business & intervention of private players. Is your business & operational model indigenous or based/imported from Middle East or Western countries?
We have been importing technologies from Europe & US. They are at the forefront of technological development. The Middle East is one of the largest markets for water treatment. In fact, now a scenario is developing where the Middle East is shifting its supplier base from US & Europe to Asian countries. Many Indian companies including ours are doing good business there.
What is your investment in R&D? How much of your technological solutions for water treatment are India specific?
Well, the fact is that the US & Europe are at the heart of water treatment technology. There have been some developments in countries like Japan & Israel, but the technology is dominated by the US & Europe. Indian research, in terms of technological innovation, when compared to them, is negligible. Our major problem is of implementation.
Implementation?
It means that we have to use existing technology & offer immediate solutions. Indian market does not have the patience to invest in R&D. There are institutions like BARC & a few companies doing research. However, since we are too far behind in the R&D side of water treatment, the more sensible approach has been to tie-up with the US & European companies & import the heart of the technology but do the rest of the thing. Today, when we make a system, the key 5% component comes from US but the rest of the 95% is designed & manufactured at our end.
But still, there is need for India-specific R&D, the technology which meets our exact requirements.
Well, with the present growth, focus towards R&D is gradually increasing. People are developing indigenous technologies. They are forming joint collaborative efforts also. This initiative has started aggressively during last few years & good results are expected within next few years. Simultaneously, lots of MNCs including GE are setting up R&D facilities in India. It will ultimately result in R&D boom, placing India at the forefront of R&D within five-ten years.
India suffers from various water problems. What solutions does Doshion offer?
We provide all kinds of solutions for all kinds of water management problems. We have deliberately attempted not to defocus from water. We do not do any business other than water management. We do not manufacture boilers or cooling towers. In water management, we do everything - whether contamination is due to microbial or dissolved solids or heavy metals. We treat all kinds of water for all kinds of application. The nature of water required by pharmaceuticals for making medicine or by power industry or by a household is totally different. We deal with all.
We have eight SBUs(Strategic Business Units), which focus on specific needs of water treatment. One SBU deals only with water required for power, another focuses on sewage recycling & effluents, one deals with water required by packaged food & beverage industry.
What you say is a revelation for a water- ignorant person like me. Water is, certainly, not a homogenous, monolithic commodity.
Absolutely. Waters are never the same.
You have an excellent desalination plant in Tamilnadu. People, including experts, normally view desalination plants are not cost effective for India. How do you view it?
I have two parts to my answer. RO (Reverse Osmosis) is often considered expensive. However, if you check actual figures, cost of setting up a RO plant has gone down by 66% in last decade. It now costs one-third of what it cost fifteen years ago. There is a perception that operating cost & power cost is very high. Even that cost has come down by more than 60%. Clearly, technology has now become cost-effective.
Second part of my answer is that people often ignore actual statistics. Today treated desalinated water is provided at 15 paise per litre. Unfortunately, people are still debating even at 15 paise. They find even this cost too high. I question them - how can they claim its expensive? What other cheaper substitute they have? We have provided desalinated water at those places, where actually there was no alternative at 5 paise, 10 paise or 1 paise. If they can obtain or provide water at lesser rate than 15 paise in such areas, they can call desalinated water costly. In absence of any such alterative, their claim does not hold ground.
Residents of such areas, mostly rural poor people, consume saline water & develop various water-borne diseases. What is more important-crying over 15 paise per litre water or consuming unhealthy water, falling sick & then incur medical bills, besides loss of productivity.
You find desalination is a reasonable, viable solution for providing clean water in coastal & other areas, where saline content is too high.
Exactly, usage of desalination is not just limited to coastal areas. People are digging bore-wells because municipal corporations have no water to supply. With thousands of bore-wells being dug, water table goes down & land fertility decreases. Water no longer remains good for drinking. Desalination becomes a good option here.
Can we hope ten years down the line, if not in hinterland, at least in coastal areas like Tamil Nadu, Mumbai, and Gujarat desalination would emerge as a viable option to provide clean drinking water?
Definitely. I would say that ten years is too far a target, five years is a long enough for you & me to see that municipal corporations resort to more & more desalination plants for providing drinking water. It may not be in Mumbai because it has enough rainfall & good lakes, but surely in places like Chennai.
Chennai has already set up a project-Chennai Metro in collaboration with a Hyderabad based company & a Spanish company to set up a huge desalination plant.
Gujarat government is setting up a desalination plant in Kachchh. Maharashtra & Andhra Pradesh governments are already talking about it. Clearly, desalination is very much here.
My mother has some serious issues with water technologies. We have a water treatment machine at home. Each time, machine installer visits our home for replacing filters or other components, he bombards my mother with certain words- Ultra Violet(UV), Ultra Filtration(UF) & Reverse Osmosis. My mother does not understand a bit of what he says. He uses a terminology for water treatment, which my mother finds Greek & Latin. In fact, she shouts that water treatment companies are fooling her in garb of super-technical jargon. She dismisses these machines as a marketing gimmick.
Can you explain these technologies & their relevance in a user friendly mode, which not just my mother but any ordinary reader understands?
Fine (smiles). I will reply from user's viewpoint. Tap water, you receive at home, has two major problems - suspended impurities like mud, dirt & organic impurities. Since this water comes from lakes through pipes, there is lots of microbial presence also. This water may not have dissolved salts in it, but it carries suspended impurities. These impurities are required to be treated by UF, which physically filters out dirt, mud & other such impurities. It is so fine that it can even dry out the bacteria from water. UF is a physical technology, a physical barrier or physical membrane, which drives all the suspended impurities.
However, it does not remove those impurities which are already dissolved in water. Water is a fantastic solvent. It dissolves everything which comes in its way. During course of its flow, it picks up several elements like calcium & magnesium. UF does not have the capacity to deal with it.
RO is superior to UF. It not only removes suspended salts, it also removes dissolved impurities. Calcium, which lends hardness to water, is found in abundance in water of states like Gujarat & Andhra Pradesh. It can be removed only through RO.
UV is a basic technology. It kills organic impurities like live bacteria & viruses in water. UV, through radiation, destroys their DNA structure. However, UV only kills; it does not physically remove them from water. It also does not remove dirt. If you use UV technology, you also have to use a filter on it.
I hope I was easy enough to be understood.
Yes, you were certainly. At least, I understood & I imagine all my readers would also.
Which technology do bottled water manufacturing companies-Bisleri, Kinley and all the others - use? Or is it a mix of all?
They use combination of these three or four. Though, various companies have different philosophies, a typical bottling plant uses filtration, RO & UV. Some of them are also using UF these days.
No one technology is sufficient to remove all impurities.
Well, this is a call- these companies have to take based upon their quality standards. However, I have not seen any company using just one technology.
The technology, which many households use at their home machines, is quite often plain RO. You suggest that is not sufficient alone.
I do not know which company RO you use. But, I would personally recommend that RO should be followed by UV to ensure safe drinking water. Any water that you store in a container for more than four hours has a tendency to develop microbial growth once again. UV further disinfects water.
What is your clientele base?
It is quite vast. We have accomplished more than 2500 projects during past 25 years. Our client base varies from power plants, metallurgy, textile industry, food & beverage industry, pharmaceuticals to automobile manufactures. Whoever uses water or discharges waste water is our client.
I can proudly say that today virtually every top company of the country is on our customer list.
Do you deal with individual customers also?
We have realized that considering our size & expertise, we will be more competitive & capable of addressing our customer when capacity goes more than 500 litres per hour. At lesser capacity, the market belongs to those companies who have a fantastic distribution, marketing & dealer network. That is the strength of Aquaguard or Eureka Forbes but not ours.
Can you go on record who are your biggest competitors in India?
There is no issue in naming them. Some companies are doing very good job. Ion Exchange India is one of the pioneers in this sector. Thermax is excellent in medium size systems. In our segment, we three are the major players.
Which areas in India have potential for greater water management & consequent water business? In other words, which areas have higher contaminated water?
Water problems are different in different states. Rajasthan has issues with salinity & nitrates. In Gujarat, the problem is with salinity & fluorides. West Bengal has arsenic content. Tamil Nadu has more problems with salinity. Maharashtra suffers from microbial contamination. Different states demand different kinds of treatments.
In a sense, entire India is a good market, but we see greater potential at Rajasthan, Gujarat, AP & TN. The states where the problem is severe & lots of commitment & action from the government are being taken.
That's exactly what I felt when you mentioned Southern states. Northern & North Eastern states, notorious for lagging behind in taking development steps, are once again sleeping on the water problem.
Well, I do not have the first hand knowledge or experience of states like UP & Assam. But I do feel that most of the states are getting up to the challenge. However, the states I named are those where we get maximum activity.
It's not only about quality of water in a state; it is about how government responds to a challenge.
True. Political will is the key step in any such activity. These technologies have been around for many years. We, as an industry, are here for decades. However, the amount of activity we have seen recently is due to clear political will. That is really going to be a deciding factor. Progressive states will have to take care of basic infrastructure & invite investment.
What challenges do private companies operating in the water business face today?
Infrastructure boom is a reality today. Today suppliers are less & demand is more. That creates obvious stress in finding right talent & people to operate & do justice with the business. Right now getting business is not difficult. Executing business, doing a good job & attracting the best talent is a challenge. Most of the companies doing business in water are facing shortage of talent.
Developing financial muscle enabling execution of such kinds of projects is a challenge. The revenue would come once projects are executed, but money is required for making investment.
Financial capacity, attracting the best talent & remaining on the forefront of technology are major challenges.
What do you expect form government? Any policy concession on water business?
Any industry, when asked about its expectations from government, it replies- no taxes.
That doesn't make sense. Taxes have to be there.
True. I, too, do not want to fall in that category. I do not want tax concessions. I would say we want stronger political will & quicker action from government to implement projects. Rest, industry will do.
Ashutosh Bhardwaj
27 Nov 2007
Hyderabad
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