Posted On: 28 Jan, 2013 Others में
Commentary: Population growth creates a 21st Century winner
In 2010 global water generated over a half trillion dollars of revenue. Global world population will explode from 7 billion today to 10 billion by 2050, predicts the United Nations. And over one billion “lack access to clean drinking water.”
A girl carries a container of water on her head at a creek in Myanmar’s new capital Naypyitaw.
Climate and weather patterns are changing natural water patterns. And industrial pollution is making water a scarce commodity. So the good news is that huge “opportunities exist for businesses that can figure out how to keep the pipes flowing.”
Yes, it’s a hot market. So, expand your vision for a minute. How many bottles of water do you drink a week? How much did you use for a shower? When you flushed a toilet? Wash your car? Cooking? Lattes? And my guess is your city water bill’s gone up in recent years.
So ask yourself: What happens in the next 40 years when another three billion people come into the world? Imagine adding 75 million people every year, six million a month, 200,000 every day, all demanding more and more water to drink, to shower, to cook, to everything. All guzzling down the New Gold that’s getting ever scarcer.
Now here’s the real scary stuff, the investor’s basic multiplier. In the 12 short years leading up to 2011 the world added a billion people. China’s population is now 1.3 billion. Plus they’ll add another 100 million in the next generation, while India adds 600 million according to United Nations experts.
China’s already planning as many as 500 new cities to house all their new folks. Imagine, 500 new cities each housing 100,000 or more people, and that’s just for half of China’s projected growth to 2050, all demanding more water. The numbers are overwhelming.
Today Americans use 150 gallons a day, compared with 23 gallons in China. But they’re catching up, just check out any panoramic travel photos of China’s beautiful megacities, Shanghai, Beiiing, Guangzhou. And read about skyrocketing sales of Ferraris, Cartier watches, Gucci handbags and luxury goods in China. China has its own version of the American Dream!
Seriously, just a few decades ago China was an emerging country, a bit backward, not a global economic threat. But change is happening at light speed. Soon their GDP will overtake ours.
India expects their water demand to double in one decade while Fortune says “expanding populations will also swell demand for agricultural water some 42% by 2030,” in two decades.
You probably “think individuals consume the most water,” says Fortune. Not so. Agriculture accounts for 71%, and industry another 16% for a total 86% of all water use in the world. It even takes 71 gallons to produce a single cup of coffee, forcing Starbucks to “cut its in-store water usage by 25% by 2015 with, for example, espresso machines that dispense less water.”
Here’s Fortune’s summary of the global market for all water users: Total worldwide revenues of $508 billion in 2010 … the bottled water market generated $58 billion of that total and growing fast … industry needs $28 billion for water equipment and services to all kinds of businesses … another $10 billion covers agricultural irrigation … another $15 billion in retail products like filters and various heating and cooling systems … $170 billion is used for waste water, sewage systems, waste-water treatment and water recycling systems … and $226 billion for water utilities, treatment plants and distribution systems. Read our Weekend Investor column on food and water investments to weather the drought.
So humans consuming lots of bottled water are not the world’s biggest guzzlers. It’s our lifestyle and consumer habits that accelerate the impact of population growth. Everything we eat, wear and use has a big water-use price tag, says Fortune:
“Consider the impact on the water supply when more people in developing nations begin living Western lifestyles. In India alone, water usage is expected to rise by nearly 100% over the next 20 years. Expanding populations will also swell demand for agricultural water some 42% by 2030.”
What we must do is grow more crops “with less water by applying genetically modified seeds, drip irrigation, and other technologies.”
In short, New Gold is costly to purify and the cost will keep going up. So the price of the New Gold will appreciate in the future for investors betting on this key commodity.
Consider this data: It takes 70 gallons of water to produce 50 cents worth of milk, says Danielle Commisso in Carnegie Mellon Today. In Fortune we learn those designer jeans your daughter just bought require 2,906 gallons of water, mostly from growing cotton … a pound of that juicy prime steak you had for dinner required 1,857 gallons … while a pound of that finger-licking-good chicken for lunch used 467 gallons … a pound of rice pilaf is a little less at 407 gallons … how about that bowl of shredded wheat you had for breakfast? A pound needed 160 gallons … and a pound of steel needs a mere 31 gallons … so why does a car requires 104,000 gallons you ask? Most of it from the rubber.
Add it all up and you got mega-opportunities the next generation, in a world adding a staggering 200,000 people each and ever day.
“The good news is that long-term solutions” do exist for today’s global water problems: “20% of Singapore’s drinking water comes from processed sewage” thanks to innovative superfine filters. China’s constructing a 1,816-mile “aqueduct to move water from rivers in the south to the parched northeast.” And global water companies like Veolia and Suez, in France, and ITT are “partnering with municipalities to manage water.”
“Beating the Coming Water Shortage” was the challenge headlining Fortune’s feature. To get the message across it also highlighted several examples where government and industry are cooperating to “beat the water shortage” problem:
In America a desalination project is underway, at a cost of $700 million, to supply 8% of San Diego County’s drinking water by 2014, a county growing at a rate of almost 17% a decade. The Tampa Bay Water Utility is spending $210 million for Veolia to build a treatment plant to provide 120 million gallons a day for 2.4 million people who had been using well water.
Where can you invest is the New Gold? Easy: Check out the two French giants, the $17 billion Veolia Environment VE +2.17% , a global leader in environmental services. And the $8 billion French company GDF Suez Energy North America, which has customers in 12 states. The $3.4 billion ITT is a competitor in water treatment technology arena. And $1.6 billion Siemens is a new player, in “services and water-purification membranes.”
Water bottlers duking it out for consumer and investor dollars are Coke KO -0.16% , Pepsi PEP +0.36% and Danone. Coke’s “goal is to safely return to nature and communities an amount of water equal to what we use in our beverages and their production.” That’s a partial response to negative press following the 2010 publication of “Coke Machine: The Dirty Truth Behind the World’s Favorite Soft Drink.”
And if all this is new to you, but you want get your toes wet investing in the New Gold, try some water-based ETFs. The Wall Street Journal’s Liam Pleven wrote about four water-based ETFs: PowerShares Water Resources PHO +0.41% is the “largest of the water ETFs, with $852 million in assets.” Other ETFs include: PowerShares Global WaterPIO +0.48% ; Guggenheim S&P Global Water Index CGW -0.09% ; and First Trust ISE Water Index FIW +0.40% . But in comparison to Veolia and Suez, these ETFs are a mere drop-in-the-bucket.
So yes, water is the 21st century’s New Gold. And, yes, growing shortages guarantee price appreciation for this ever-scarcer commodity. But still, something doesn’t feel right. Yes, Fortune presents a solid, upbeat picture. But in the end something was missing. Because this does not reveal a serious long-term strategy.
The fact is, no nation on Earth has a long-term plan to reverse the real problem, that’s not the “coming water shortage.” The real problem is our suicidal growth rate adding water users on a planet that’s incapable of feeding 10 billion.
Source : http://marketwatch.com/story/water-is-the-new-gold-a-big-commodity-bet-2012-07-24?pagenumber=1
Rate this Article:
इन देशों में पानी से भी सस्ता है पेट्रोल, कीमत जानकर हो जाएंगे हैरान
धोनी या कार्तिक कौन है IPL 2018 का बड़ा मैच फिनिशर, जानें क्या कहते हैं आकंड़े
जल्द पर्दे पर वापसी करेगा 'कौन बेनगा करोड़पति', आ रहे हैं बिग बी
वाराणसी से पहले बिहार, कोलकाता में भी पुल हादसों ने ली थी कई जानें
IPL के इन 4 सस्ते खिलाड़ियों ने दिखाया है अपना जलवा
अनुष्का से लेकर काजोल तक, इन 5 एक्ट्रेस ने करियर के पीक में की शादी
प्रिंस हैरी और मेगन की रॉयल शादी में खर्च होंगे इतने करोड़, जानें खाने से लेकर ड्रेस तक की कीमत
कैटरीना से लेकर सोनाक्षी तक, इन स्ट्रगलर्स के गॉडफादर रहें हैं सलमान खान
इस गेंदबाज ने 8 साल तक नहीं ड़ाली थी IPL में नो-बॉल, ये Facts कर देंगे हैरान
चक्रवाती तूफान 'सागर' का खतरा, 7 राज्यों में तेज आंधी का अलर्ट
'गुस्से वाले हनुमान' के पेंटर ने बनाई पीएम मोदी की तस्वीर, सोशल मीडिया पर हुई वायरल
मुंबई में डब्बावाला टिफिन ही नहीं, आपका पार्सल भी सही पते पर पहुंचाने जा रहा है
8 साल छोटे एक्टर के साथ स्क्रीन शेयर करेंगी करीना, करण जौहर होंगे प्रोड्यूसर!
मोदी सरकार के 4 साल पूरे, इसपर क्या हैं आपके विचार लिखें ब्लॉग
5 टीमें 2 स्थान, जानिए किस टीम के प्लेऑफ की कितनी संभावना बाकी
कर्नाटक के इस लग्जरी रिजॉर्ट में रुके हैं कांग्रेस के विधायक, मौजूद हैं कई लग्जरी फैसिलिटी
‘कभी खुशी कभी गम’ का टीवी वर्जन बनाएंगी एकता कपूर, ये होगी स्टार कास्ट!
कभी किसान का बेटा बना था देश का पीएम, अब कर्नाटक की राजनीति में किंगमेकर की भूमिका
IPL 2018 में ओपनर्स के बल्ले से निकल रहे सबसे ज्यादा रन, लिस्ट में है भारतीयों का जलवा
इस हफ्ते से शुरू होगी मजेंटा लाइन, इतने समय में पहुंचेंगे नोएडा से गुरूग्राम