Wastewater management and the Asia opportunity

June 26, 2019
Could Asia be a green leader in industrial wastewater?

Where wastewater management is concerned, Asia could become a global leader in the years ahead. This might sound counterintuitive, given that Asia is “at the intersection of water scarcity, high industrial growth, and environmental pollution,” says Luke Johnson, chief financial officer of Gradiant Corporation, a global leader in sustainable water solutions for heavy industries.

Across the region, rapid economic growth, the presence of industries that use large water volumes and generate lots of waste, years of environmental mismanagement, and insufficient regulatory frameworks have created huge problems with effluent. Yet, things are changing fast, as they typically do when Asia’s policymakers put their minds to it.

“Believe it or not, Asia is ahead of everyone else in terms of regulation,” says Anurag Bajpayee, the company’s CEO and co-founder, speaking on Singapore radio program Money.fm. “Countries like India and China that were long behind in terms of regulation, now have the most stringent requirements for industry.” Part of the reason is that things had become so dire. While enforcement might not be equally stringent thus far, there is also considerable popular pressure to clean up the environment and hold corporations to account.

Gradiant’s origins trace back to MIT, where its co-founders were working on water treatment and desalination technologies during the unconventional oil and gas boom. Water was “at the center of the discussion, both environmentally and economically,” says Bajpayee. The water used in drilling is usually disposed of in deep underground disposal wells that sit below the groundwater level. This highly contaminated water is effectively removed from the hydrological cycle, and leaves the company still requiring more water for its needs. Gradiant’s founders realized there was a win-win, Bajpayee says: “a market in our backyard.”

Having successfully built a business in the US, Gradiant expanded its services and found new markets in India, China, and the Middle East. “We found ourselves quite quickly setting up businesses in all those regions, working in different industries, from textiles and pharmaceuticals, to chemicals, and now the power industry,” says Johnson, who is based in Singapore, where the company established its regional R&D headquarters in 2018.

“The risk of operating and not doing anything is to be shut down. Industries have to react and they’re looking for the lowest cost, best-in-class solutions.”

Luke Johnson, CFO, Gradiant Corporation

The decision to move the majority of the R&D to Singapore was driven by the need to establish local relationships, support the regional operating businesses, and build an international talent base. The company retains strong ties with MIT as well as other US universities such as University of Florida and Northeastern, and now has three research collaborations with Singapore universities, including with both NUS and NTU. These make it easier to work with other universities, particularly in China such as Tsinghua University and the Indian Institutes of Technology. The Economic Development Board (EDB) has also been supportive in helping the company open its regional center of excellence in Singapore.

R&D is integral to the company’s operations and growth plan. “We have commercialized four out of eight main technologies in our portfolio,” says Johnson, “and we’re continually upgrading, as well as inventing new solutions for our customers.” The goalposts for water treatment depend on whether the water is intended for re-use in industrial processes, creating a closed loop, or whether the water needs to be brought up to potable levels. Solutions are entirely customized and are delivered end-to-end for the company’s customers.

The trend to relocate manufacturing facilities to lower cost locations in Asia has also created opportunity for Gradiant. For example, the textile industry moving factories away from traditional centers such as China and India to new locations in Southeast Asia allows environmental and wastewater management technology to be installed at the very beginning, further lowering the plants’ operating costs. As much as companies want to be good environmental stewards, tightening regulations on effluent criteria are creating urgency for Gradiant’s customers. “The risk of operating and not doing anything is to be shut down,” says Johnson. “Industries have to react and they’re looking for the lowest cost, best-in-class solutions.”

As well as continuing to develop and grow industrial wastewater decontamination technologies, desalination is another path to long-term growth. Across Asia, governments are establishing or evaluating desalination plants for shoring up future water supplies. In May 2019, Hong Kong authorities announced an HKD 7.7 billion (US$ 984m) investment in a desalination plant that will use reverse osmosis and meet 5% of the territory’s drinking water needs by 2022. Johnson says that Gradiant’s membrane technology can boost water recovery by at least two times: “With the growing need globally but particularly in Asia Pacific, this high recovery process is going to be another huge business for us.”

This article was produced by MIT Technology Review Insights in association with TM One and first appeared on mit-insights.my on June 25, 2019.