Water ETFs Soak Up Optimistic Industry Growth Forecasts

Exchange traded funds based on the water industry could be on the verge of major growth as rapid expansion and greater demand in the emerging markets drive the global water industry.

According to Harri Kerminen, CEO of Finnish chemicals firm Kemira, the global water industry may grow to $800 billion by 2035, report Nina Chestney and Henning Gloystein for Reuters. Other industry experts project the market will expand to $1 trillion by as early as 2020.

“Water is the fastest growing market at the moment, with a size of $500 billion globally,” Kerminen commented. “Most of that growth is in South America and Asia. By 2035, we estimate 50% of the whole market will be in Asia, and it could be worth $600 to $800 billion.”

Kemira points out the opportunities offered in South America and Asia, which are bracing for rapid economic growth, climate change, growing populations and regulatory reforms.

“The problem is, the water is the wrong quality in the wrong place. Just 1% is available for industrial and society use,” Kerminen remarked. “If nothing is done, there will be a 40 percent gap between supply and demand by 2030.”

Kerminen also points out the integration of water and energy sectors as a key area of growth. He believes this area may benefit from greater progress toward efficiency. Additionally, the move from re-treatment of waste water may could cheaper alternative to desalination, which is highly energy intensive.

“At the moment, there is not enough pressure cost-wise so people don’t act. But within 10 to 20 years, more of these solutions are needed,” Kerminen added.