Explosive population growth, improved living standards, and increasing industrialization are causing a surge in global demand for water. However, the infrastructure for supporting the stable supply of clean water, including water and wastewater treatment facilities, is often either outdated or insufficiently developed.

Against this backdrop, Mitsui made a bold leap into the water business, through strategic investments in Thailand, Mexico and elsewhere, establishing itself as a comprehensive water infrastructure services provider with global reach and strong growth opportunities in a market set to exceed US$1 trillion by 2025.

Higher demand for water is stemming from two main sources. The world's population increased about 2.7-fold from around 2.5 billion in 1950 to approximately 6.8 billion in 2009, and is projected to grow by around another 30% to about 9.2 billion in 2050. At the same time, industrialization in developing countries is driving demand for water for industrial use.

To meet this rapid increase in global demand, the world must rely on a finite supply of water. Although our oceans mean that we are not short of water per se, the accessible freshwater in our rivers and lakes comprises only around 0.01% of the earth's total water, while that in the form of groundwater accounts for only about 0.8%. So although we are surrounded by water, most of it is not suitable for domestic or industrial use.

On top of that, our available water supply is being diminished by pollution, both natural and man-made. Arsenic, fluorine and other contaminants are present in our groundwater, while the water cycle is being polluted by untreated domestic and industrial wastewater. Developing countries have a shortage of water supply and treatment facilities, while those in developed countries are becoming outdated. Meanwhile, floods, drought and changing demographic trends and lifestyles have led to unevenness in water distribution and difficulties in ensuring a stable supply of clean water. Often the places that need water most have the greatest shortages. And as it is not economically viable to transport water over long distances like oil or LNG, water problems are more localized and must be addressed individually in each specific region in which they occur.

Some regions, such as Asia and Latin America and the Caribbean, have particularly pressing needs, and it was to these regions that Mitsui turned when it decided to enter the water business.

Water purification facility of Thai Tap Water

The early 2000s saw a number of global commitments to address water problems, such as the Millennium Development Goal to halve, by 2015, the proportion of people without sustainable access to safe drinking water and sanitation. It became evident that significant infrastructure investment would be needed to realize these goals, and that the private sector had an important role to play.

Amid a growing trend toward water industry privatization, particularly in Asia, Mitsui took its first major step into the water business with the March 2006 acquisition of a 35% stake in Thai Tap Water Supply Company Limited ("TTW") in Bangkok (Mitsui's ownership interest is now 26%), Thailand, from TTW's other major shareholder, Ch. Karnchang Public Company Limited ("CHK"). It was a significant investment. TTW has a 30-year water supply agreement with the local waterworks authority to supply tap water to two provinces to the west of Bangkok. It owns and operates the largest privately owned water treatment plant in Thailand, which has a capacity of 320,000 tons per day.

Mitsui then built on this initial investment by joining forces with CHK again. In April 2007, Mitsui and CHK announced their next step-the acquisition by TTW of a 98% stake in Pathum Thani Water Co., Ltd ("PTW"). PTW, which supplies water on a similar long-term supply agreement for the northern suburbs of Bangkok, increased TTW's total capacity to around 700,000 tons per day. Mitsui had successfully developed the platform and partnerships needed to succeed in the water business in Asia.

Industrial wastewater treatment plant of Atlatec

Around the same time, on the other side of the world in Mexico, Mitsui was nurturing a partnership that would be crucial to its goal of becoming a major player in the global water industry. Mitsui had previously been participating with water and wastewater treatment engineering and construction company Earth Tech Mexican Holdings ("Earth Tech") in several water and wastewater treatment projects for Pemex, Mexico's state-owned petroleum company, and Queretaro State. Earth Tech brought to the table its expertise in industrial and municipal water and wastewater treatment, which was complemented by Mitsui's strong track record in international infrastructure development and its global network for providing services to customers.

Then, in July 2008, Mitsui acquired Earth Tech from AECOM Technology Corporation, a leading U.S. engineering company. Mitsui acquired 85% of the company's shares, with Mitsui affiliate Toyo Engineering Corporation taking a 15% stake. The acquisition gave Mitsui the necessary foothold to begin addressing global water problems as a leading water business developer in its own right, with involvement throughout the water business cycle, from the design, financing and construction of water and wastewater plants, through to their operation and maintenance.

Earth Tech's name was changed to its original company name, Atlatec S.A. de C.V. ("Atlatec"), and in December 2008, after post-acquisition integration, Atlatec won its first bid as a consolidated subsidiary of Mitsui, together with a Mitsui USA subsidiary, the investment firm Servicios de Agua Trident, S.A. de C.V. ("SAT"). The project, known as the El Ahogado wastewater treatment project, was to undertake the engineering, construction, operation and maintenance of a wastewater treatment plant in Guadalajara City, Mexico's second-largest city, which faces serious environmental problems due to contamination by untreated water. When completed, the plant will have the capacity to treat around 190,000 tons of wastewater per day. At the end of the 20-year BOT (build, operate and transfer) agreement under which the project is operated, the plant will be transferred to the local public water commission.

With Mexico urgently needing to develop, improve and maintain wastewater treatment plants in many of its cities, Mitsui's role in contributing to Mexican society through water business has continued to grow, as has its portfolio of water assets. In September 2009, for example, Atlatec, together with SAT and ICA, the largest construction firm in Mexico, inked a deal to construct and operate the biggest wastewater treatment plant in Mexico, also in Guadalajara City, with a capacity of around 730,000 tons per day. Through this project and the El Ahogado project, Mitsui and its subsidiaries will meet almost the entire demand for household wastewater treatment in the metropolitan area of Guadalajara City.