VA Tech Wabag, a leading water and wastewater management multinational, benefits from its presence in diverse markets. While the domestic business appears to have hit a lull, other emerging markets have contributed to a sustained order flow, which is now picking up further.

In the first quarter of the current year, it bagged orders of over ₹1,000 crore, which puts the company well on track for its target of ₹3,500-3,700 crore.

Sharing his outlook with BusinessLine , Wabag Managing Director Rajiv Mittal said he is confident the domestic market will pick up in the coming months and its potential will be realised. Excerpts:

How did the water sector fare last year? Did it live up to the initial promise?

Last year was generally tough. But our multi-geographic presence helped make it a reasonable year.

We saw 10 per cent growth and cash flow also ended at the same level as the previous year. So I think we were happy to see the year go by.

Order intake of ₹3,000 crore was mostly from our international presence.

This year too we are more bullish looking at the order pipeline from international markets. In India there were not many government-funded projects and neither were there industrial investments.

So, except for some prestigious orders such as the Ganga Action Plan, order intake in India was poor.

What factors contributed to the growth in international markets?

Our multi domestic presence is a highlight of this year. Three-four years back when we were hit by the Arab Spring, we started with multi domestic units (MDUs).

There are 18-20 MDUs including in Switzerland, Romania, The Czech Republic and Austria. We created one last year in Thailand, which is also looking at opportunities in the region.

The MDUs in the Phillipines and Turkey had a great year. The former won prestigious orders and commissioned a good scheme to treat the Laguna Lake in Manila. Order intake is also good.

They are going to be almost autonomous, building their own team and capability. They will be less and less dependent on India.

That is a true model of MDU, in which we initially do the handholding and then they strike out on their own for day-to-day business.

In Turkey Wabag is handling the complete wastewater generated in Istanbul.

But are the concerns of a slowdown in Europe and China a cause for concern?

Though we are present in Europe, not much of business comes from there. The main markets are north Africa, West Asia and Eastern Europe, such as Poland, Bulgaria and Croatia. We only focus on emerging markets.

We do not see a major impact there. Money is flowing in from the rest of Europe plus they are investing their own money.

We pulled out of China last year. We decided that it is not a market for us. We saw success earlier, when soft loan funding was going in. But in the past seven-eight years, with just local fund flow, we cannot compete with local players with our technology and overheads as an international player. Just as Chinese players cannot compete here.

What are the market opportunities in South East Asia?

Wabag is keen on all areas other than China, Japan and Taiwan. We are looking at Hong Kong, the Philippines, Vietnam, Malaysia, Singapore, Indonesia and Lagos.

Myanmar is going to open up with projects funded by multilateral agencies. Water will be the next big topic there. The focus is now on roads and transport. And Myanmar will be our next big destination.

India action appears to be delayed…

In the next six months we will see traction in India.

We will see a balance in order flows between India and international markets in 2016-17, which is the way we want it to be.

Government initiatives and allocation of funds of the order of ₹20,000-50,000 crore have started for smart cities and the Amrut (Atal Mission for Rejuvenation and Urban Transformation) scheme launched two weeks back. This clearly shows that the Centre wants to move.

It now depends on implementation by the administration and the ministry. Last week I was in Delhi at a meeting of select companies organised by the World Bank and Ministry of Water Resources.

It was entirely on how to encourage private sector participation and the risks the government has to take on itself. The Centre is aware it needs to implement projects fast.

In India nothing gets constructed in less than two-three years.

What has happened on the desalination business end?

We are a bit disappointed.

Globally, last year was the lowest in two decades in terms of desalination project awards.

I think desalination — of sea water and for water reuse — to us remains an interesting market.

If you look at Tamil Nadu and Chennai there is great desalination opportunity as quite a few projects have been announced. Maybe things will happen in a year or two. So we will stay with it in the long term.

What are the emerging opportunities in the water sector?

I think domestic and industrial wastewater recycling will be a focus area. Wastewater is not a liability but a resource which generates revenue.

The whole scheme has to be made self-sustaining.

Even last week the World Bank and Water Resources Ministry discussed sustainability, efficiency and private sector involvement. Companies should be held accountable but payments must be guaranteed.

Private companies shy away from government investment because there is no assurance of returns. It will be good if the Centre guarantees that and demonstrates it with a few pilot projects.

Funding or technology is not an issue but just the need to instil private sector confidence that it can invest and get money back.

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