"Mexico is treating 100m3/s of wastewater, so there is still a lot of room to grow"

Friday, July 15, 2011

Wastewater and waste treatment is a growing industry in Mexico and projects such as Jalisco state's US$710mn Atotonilco wastewater treatment plant, billed as one of the largest in the world, are set to drastically expand the market.

While large-scale projects are increasing, a lack of homegrown technology for use in the industry and a government slow to encourage the market are hindering expansion.

BNamericas spoke with Fernando Madrazo, the operations manager of treatment technology company Icap Bio-Organic, about some of the issues facing the industry and the solutions his company offers.

BNamericas: What technical solutions does your company offer to the water and waste treatment industries?

Madrazo: Icap Bio-Organic has exclusive distribution rights to the Bio-Organic Catalyst (BOC) technology across Mexico, Central America and the Caribbean.

BOC is a broad-spectrum liquid catalyst that treats water and waste by making organic components soluble. The technology is completely non-toxic, biodegradable and stable with the same density and viscosity as water.

BNamericas: In what industries can BOCs be used?

Madrazo: The product can be used by the hotel industry to break down fats and grease so that grease needs to be removed from grease traps every two months rather than every two weeks. The product also eliminates odors that can be very potent in this industry.

We also work in the wastewater treatment industry and this is where our product has the broadest spectrum of application. Sometimes a treatment plant needs an extra punch and that's where we come in. Our products can accelerate biodegrading, generate 30-40% aeration energy savings, and reduce sludge and odors.

BNamericas: How does the product save on energy?

Madrazo: Injection of our product into a wastewater treatment plant increases the amount of dissolved oxygen in the water. This means that the amount of oxygen you have to pump into the plant through the aeration system is less and that saves considerable costs. A plant that treats 1000l/s costs 800,000-1mn pesos (US$68,000-$85,000). With our product you can save up to 30-40% of that cost. We can also reduce the amount of sludge left at the end of the treatment and so reduce the cost of final disposal.

The product also speeds up the process and increases capacity in a plant. This is particularly important because many plants are backed up. For example, a plant designed to treat 100l/s might actually be receiving 120l/s and so it doesn't have the capacity to treat the water properly. Our product increases capacity without the cost of physically expanding the plant.

BNamericas: Who are you selling your technology to?

Madrazo: We're currently working on the remediation of lakes. A lot of Mexico's artificial lakes, for example in parks, receive treated water. Although the water is treated properly at the plant, it still contains some organic loading that stimulates algae growth that turns the water green and emits an odor of rotten eggs.

We're working on lake projects in the states of Aguascalientes and Mexico City with Bosques Urbanos y Educacion Ambiental. We are also working with Mexico City water authority SACM on three odor reduction projects in water treatment plants and drainage tunnels.

BNamericas: How expensive is the technology?

Madrazo: It's very affordable. For example, in the wastewater treatment industry our product is cheaper than an infrastructure spend to increase capacity, as it only involves a maintenance cost. You just need a pump to inject it into the system.

A very small dosage of the product is needed and so it's more cost-effective than other treatment technology. For example, a water treatment plant treating 1Ml of water per day usually only requires 1l of product per day.

BNamericas: How do BOCs compare with other technology on the market?

Madrazo: There's very little direct competition as this technology is unique. The most similar technology uses enzymes to treat water or waste, but they are all very specific to different uses; you'll have one for sludge, one for smells, etc.

In addition, enzyme technology is not 100% non-toxic and often requires special storage. Our product is 100% organic and certified non-toxic. It has a broader spectrum of application and its dosage application is smaller than competing technology.

BNamericas: What opportunities are there for expansion?

Madrazo: We are very interested in bio-digestion and the waste-to-energy market. I see a lot of value in this market, as it's growing following investment from [national agriculture and rural development authority] Sagarpa in waste-to-energy projects, but the market isn't even close to its potential.

Current bio-digesters input organic waste and generate methane to be used for electricity; however, the percentage of methane generated is highly variable. Methane levels can vary between 30% and 75% and this variation is bad for the machinery. Our product can increase the amount of gas produced by about 30%, but more importantly, we can stabilize production to within five percentage points.

A municipal wastewater treatment plant will receive water with around 350mg/l BOD [biological oxygen demand]. A pig farm would produce an effluent stream with 15000mg/l BOD. The wastewater created in those industries has to be treated much more thoroughly for it to be reused for agricultural purposes. This could be a big growth market.

BNamericas: Your company uses technology from the US. Are there many homegrown Mexican companies in the market?

Madrazo: There are a lot of good water and waste treatment companies in Mexico, both Mexican and international. However, Mexico is not traditionally a technology-producing country. In my market, the technology end, the competition is usually foreign.

There are some great projects at the Mexican universities Tecnológico de Monterrey and UNAM, but the extent of investigation is very small compared with the US, where universities receive much more funding. While this is growing in Mexico, we are still a developing country. That is the main reason why our technology is usually imported.

BNamericas: What can the government do to expand wastewater treatment?

Madrazo: The government doesn't have the resources to invest widely in wastewater treatment and so they do need help from the private sector. The government could facilitate private investment by paying more for treated water. Companies are allowed to treat water but there is no incentive to optimize use of the sludge as the government retains ownership of the water and the sludge.

Sludge is very valuable as it can be used for compost, for agricultural purposes, and in waste-to- energy projects. In other countries companies are designing great projects that are eligible for carbon credits. Companies can't do that in Mexico because they don't own the product. This is something the government could look at.

Mexico has some of the best water and waste treatment regulations in the world, but the government could do more to enforce them. Stricter enforcement would incentivize companies to treat their waste properly.

The market in Mexico is much bigger than in Central America and the Caribbean; however, the government needs to develop awareness about the treatment industry. We are very far behind in comparison with the US or Europe. The environmental consciousness of the average Mexican is increasing, especially in Mexico City, but there is a lot more to be done. Mexico is treating 100m3/s of wastewater, so there is a lot of potential and a lot of room to grow.

About Fernando Madrazo

Fernando Madrazo is the operations manager for Icap Bio-Organic and is a qualified chemical engineer, having trained at the Tecnológico de Monterrey university.

About the company

Icap Bio-Organic is a joint venture between the technology owners Bio-Organic Catalyst and SIF Icap Mexico, a subsidiary of the Mexico City stock exchange (BMV) and global brokerage Icap.