What potential markets are you considering entering in the future?
One potential market is ultrapure water (UPW), which is extremely pure in composition, below 0.1 microsiemens. We have recently begun a project to produce this. For this we teamed up with a group that has invested in the Canadian company Enpar Technologies. The first trial unit was conducted at our plant in the south of Jeddah and we produced water with the purity of about 1 microsiemens, or 0.5 ppm. We are now trying to go even higher in purity and lower in concentration or conductivity, with the hope of servicing extremely niche markets with such water as is used for testing stainless steel pipes in oil refineries. We will be ready to service that market in the next few months. There will always be demand for UPW, and it will always remain a niche market. It is not feasible to build an entire business around UPW, but it can certainly add to an existing and varied portfolio.
How do you evaluate the role of the private sector in the water industry now and in the future?
Water is a serious business and a matter of national security for Saudi Arabia. The country is huge, its population is young and growing, and it has an active industrial base, yet water resources are limited. There is huge demand and the demand is constantly growing, requiring billions of dollars of investment. In the last eight to 10 years, the private sector played a key role in Independent Water and Power Projects (IWPPs), and these IWPPs were largely done with private sector investments, with perhaps a billion cubic meters of desalinated water being produced through private-sector funding and contribution. That being said, the government is also still actively investing in water projects and infrastructure, be it the production of water, seawater desalination, or brackish water desalination. Small- and medium-size producers like ours contribute about 40,000 cubic meters per day. The government will continue to invest billions of dollars in water infrastructure. The private sector can play two main roles, in IWPPs or like us at a medium-size capacity producing 20,000-100,000 cubic meters per day. Under current conditions, the government will be keen to involve the private sector more in the water industry.
What are some of the biggest challenges in the water sector?
In a volatile region like the Middle East, challenges come without warning. We try to adapt, but sometimes it is beyond individual private companies' capacity to mitigate all the challenges. Saudi Arabia is still a large country with a healthy economy, despite the challenge of low oil prices. Another challenge is getting paid by contractors and collecting money in specific industries. Also, the process for obtaining permits is difficult and stringent, and sometimes it can take two or three years to get the right permits.
What role does the ethics of water distribution play in Saudi Arabia?
Water has a strong ethical dimension. Water is not purely a commercial commodity; of course water is commoditized, but how it is sold, distributed, and consumed must be managed sensitively. Everyone requires water—factories, resorts, hospitals, and residences. Hospitals and schools, of course, also have precedence for all excess capacity, followed by residences, which have precedence over resorts or hotels. People need water, and the ethics of that transcends all commercial concerns. Whenever there is a shortage, we determine where the water is most sorely needed and distribute it accordingly.
What kinds of environmental standards does SAWACO maintain in its operations?
We undergo strict and regular supervision and reviews by the PME, which checks our plants and whose divers check the quality of the coral near our plants as well as the concentration of the fish where the brine goes into the sea. If we failed these reviews, we would be shut down. These standards will also create more incentive for creating more solar desalination plants.