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Market overview

Brazil is highly investing in water treatment and reuse. Whilst companies are increasingly considering water recycling for reuse in the productive process, public authorities are forming partnerships with the private sector for the development of sewage treatment systems.

What are the drivers for investment?

Increasing water prices and tougher regulations are the main drivers.

The difficult access to water is affecting price in several Brazilian regions. The water supply is mostly controlled by concessionaires. South and South East, which are the most populous regions, show the highest water prices. In 2011, the whole country’s average water price was 2.30 BRL, around 1.38 USD per m³.

The industry is mostly capturing water from the basins, due to the high water prices from concessionaires. The superficial water is available at lower prices than the water from concessionaires, but throughout the last 20 years the committees which regulate the basins started to increase prices.

Among the three analyzed sectors, steel industry shows a long experience on water reuse, demonstrating an impressive number of 96.5% of water reuse in the production process. Food & Beverages and Pulp & Paper industry are conscious about legislation requirements and benefits of reducing water dependency, but have still a long way to go to reach same reuse levels as the steel industry.

The market is open for new trends

Large companies with production units often handled the water treatment issue through EPC system (Engineering, Procurement and Construction), building facilities on site. EPC was seen as the best alternative due to high volume of water to be treated. However, BOT system (Build, Operate, Transfer) has become a more cost-effective alternative for treatment of effluents. Also offsite is seen as an alternative for small-medium sized companies.

The public sector and municipalities are also restructuring how they approach the sanitation issues. For instance, the PPP (Public-Private Partnership) is seen as a mean of stimulating faster development, hoping to overcome public sector inefficiency by hiring private companies to provide public service for a period of time.