Quarterly Mexico Water Report

Issue 6
Winter 2011
Editor: Vince Lencioni
Contributors: Claire Carranza, Alejandro Vega, and Heber Vega

MEXICO WATER REPORT

This edition of the Mexico Water Report continues our series of articles on water issues in other Latin American markets as well as covering Mexico's water segments. In light of its highly developed market, Chile is profiled in this edition, following the review of Brazil's market in the last issue. The Chile article is a collaborative effort with our Chilean colleagues at Trade Chile, a consulting firm with a growing water segment focus that has helped foreign companies enter Chile and other Spanish-speaking South American markets since 1995. The LGA/Trade Chile alliance together with the Brazilian TVZ/LGA alliance allows us to offer comprehensive Latin America-wide market entry and market expansion services for companies with water-related products, as well as other industrial/B2B and retail products.

In this edition we will address:

Chilean Water Segment Overview
Water supply and sanitation in Chile is characterized by high levels of access and good service quality. Compared to most other countries, Chile's water and sanitation sector distinguishes itself by the fact that all urban water companies are privately owned or operated. The sector also prides itself on having a modern and effective regulatory framework.

Analysis of the Municipal Wastewater Projects for 2011
According to a list provided by the Mexican National Water Commission (Conagua), in 2011 there were 204 proposed projects with at least 65% federal funding from one of three principal funding sources (APAZU, PROTAR, FONADIN) for the construction or rehabilitation of municipal wastewater treatment plants. To find out how many of these projects were really bid and/or carried out in 2011, LGA Consulting reviewed and analyzed the information on each in two different ways.

Mexico Market Size Estimate Explanation for the 4 Major Water Sub Segments
In past presentations at WWEMA and WEFTEC events, the LGA Consulting General Manager provided extensive water sub segment market size estimates for municipal and industrial wastewater and municipal and industrial potable/clean water markets. In this article we explain the methodology behind the different sub sector scenarios and the data that applies to these areas.

2030 Mexico Water Agenda and 2011 Modifications
The water sector in Mexico has gone through positive and negative changes in the last few years. Despite the efforts made so far, the water sector faces various challenges that require strong measures. The 2030 Water Agenda was proposed to achieve water sustainability in Mexico during the next 20 years. The four main objectives are: clean rivers, universal coverage (potable and sewerage services), all waters treated, and habitable areas protected from catastrophic floods. The program has 14 actions directly related to these main objectives.

Water Reuse in Mexico
In terms of wastewater reuse in agriculture, Mexico ranks second in the world – but this is hardly an accolade since much of that wastewater is untreated. Of the wastewater that is reused in Mexican agriculture, 80% is not treated and its use is highly unregulated. While rain water reclamation projects at government levels are at infant stages here, Mexico is making some strides with strategies and efforts to reuse treated water. Two reasons for this change are related first and foremost to the scarcity and the cost of potable water. While residential potable water prices remain extremely low in Mexico, the prices that businesses have to pay is increasing significantly, supposedly increasing faster than general inflation for the first time in Mexico's history. Also, while the southern states in Mexico have over 15,000 m3 of water per capita, the northern and central states per capita water is only 500 and 1700 m3 respectively. Water stress severity is greatest where 75% of the population lives and where 87% of the Mexican economy is located.

Water Quality Problems and Challenges in Mexico
The lack of confidence in Mexican potable water supply and in general superficial water sources has caused the country to position itself as one of the major consumers of bottled water in the world utilizing 234 liters per capita, one of the highest consumption rates in the world. Over 80% of Mexicans are not satisfied with the water quality coming into their homes and do not drink it, fearful of contracting diseases because of the lack of treatment and aquifer pollution. Water quality is also affected by water pollution problems from somewhat uncontrolled municipal and industrial discharges and the insufficient monitoring and low compliance with related regulations. Furthermore, it is important to mention that in 2010, according to the United Nations Development Program, Mexico was 106 out of 122 countries in water quality.

Upcoming Activities and Visits by the LGA Consulting General Manager

LGA Webinar on the Latin America Water Segment, January 26, 2012, 2:00 P.M. Eastern – LGA will be offering a webinar to all companies interested in taking the “next step” in their Mexico and Latin America sales and channel efforts and discussing the pros and cons of regional presence to ensure success in the challenging but growing region. If anyone is interested in participating in the webinar, please contact us.

Mid-May Visit to the Upper Midwest: The General Managers of both LGA Consulting and TVZ International will be in the upper Midwest during the middle of May. If you would like to meet with either General Manager during this trip, please contact us.

AWWA ACE 12 Event in Dallas, Texas, June 10-14, 2012 – The director will be attending the event and available to meet with business people during and after the show.

Reorganization of the Mexico Water Report section on the website – LGA Consulting has reorganized the Mexico Water Report section of its website: http://www.lgaconsulting.com/water/report.html. With these changes, the front page of the section will show the title of each edition as well as the title of each article so that you don´t have to search edition by edition to identify articles of interest. We believe that this will be a significant value added for companies trying to access information from the last two years of Mexico Water Report editions for information.

If you would like copies of past Mexico Water Reports, presentations given by the director of the Wisconsin Trade Office in Mexico on the Mexican water segment, or copies of the translations of Mexico's two wastewater treatment regulations (NOM 001 and 002), please go to the LGA Consulting website or contact the office director by email at vlencioni@lgaconsulting.com or by toll-free U.S. Number: (1) (888) 750-0988.