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Wastewater treatment levels in Mexico remain fairly low despite national schemes that oblige municipalities to build treatment plants. While high-profile projects such as the 4.3Mm3/d Atotonilco wastewater plant in Mexico state (Edomex) are a big step forward, it's unclear whether there's room for such large-scale projects across the country.
On the technological side, tighter Mexican regulations are spurring the entrance of high-tech national and international companies into the water industry. One such company is locally based Dinámica Y Saneamiento De Caudales (Dysac), which provides technology for the water sectors in Central America as well as Mexico.
BNamericas spoke with Salvador Sánchez, Dysac's commercial director, about ongoing projects, wastewater treatment levels in Mexico and how domestic companies are catching up with their foreign counterparts.
BNamericas: Dysac offers a wide range of services. Where would you say the company fits into the water industry?
Sánchez: We are specialists in the design, manufacture, installation and maintenance of electro-mechanic equipment for water processes. We filter water to remove large solids and we provide grates and floodgates for large stretches of water in the potable water, wastewater, sewerage and rainwater drainage sectors.
So we can either participate in new projects to equip a plant or work on projects involving improvements to existing systems.
BNamericas: What projects have you worked on recently?
Sánchez: We recently delivered floodgates for the Carrizal river in Veracruz that will prevent flooding in Villahermosa. One of the country's big construction companies, Coconal, is carrying out the works on behalf of the Mexican national water authority, Conagua, and we were contracted by them to install four gates that are 5m wide.
We've also worked on other important projects such as the second main water transfer line in Querétaro, in conjunction with ICA and Aqualia. In addition, we provided Brazilian construction company Odebrecht with floodgates for the Francisco J Múgica dam in the state of Michoacán. We're also working with Conagua on emerging projects on the Compañía river in Edomex.
In general, we sell our products to the large construction companies that are running projects, rather than directly to the municipal governments.
BNamericas: How much are these type of projects worth?
Sánchez: In Peru, Ecuador, Colombia and other Central American countries we are quoting around the US$5mn to US$10mn mark for the large projects, but this obviously depends on the amount of water we are required to manage.
In Mexico, project values oscillate between US$3mn and US$5mn.
BNamericas: How does the Mexican market compare with other Central American countries?
Sánchez: I think the Mexican market is technologically very demanding. The projects are becoming more and more exacting due to government regulations, which regulate everything from discharges into drains and the quality of water treatment to the durability of the machinery. The regulatory system also intervenes in a concession holder's financial and construction planning, as they are keen to avoid additional maintenance costs.
The demands are lower in Central American countries that are still in the early stages of market development. These countries will definitely achieve higher levels of technology as they develop more regulation, and perhaps it will take place even more quickly than we have managed here in Mexico.
BNamericas: Who is your competition in Mexico?
Sánchez: There is a lot of opportunity in the Mexican market and many brands that are looking to establish themselves here. Our current competition is from Europe; from the Spanish, German and French companies. Our competition at a national level is still very incipient as most companies are not as prepared or able to provide the technical support we offer.
International companies have introduced technical innovations that have taken the national companies a while to respond to. As a result, those companies have had an advantage in the market, but companies like ours are now reaching a competitive level.
BNamericas: Do you think the government is doing enough to attract private investment to the sector?
Sánchez: There is already a lot of private involvement in the industry. In the water sector there is no restriction on foreign participation as the large construction companies subcontract to whichever company they choose. At the same time, I think the national companies have the competitive edge as we are based here and so can provide the necessary maintenance work required.
BNamericas: Which sector is your most successful?
Sánchez: Wastewater and sewerage are the most complex sectors in terms of the materials and size of equipment required and so they are very profitable.
However, the difference between the sectors is minimal. For example, irrigation and hydroelectric projects are almost on a par with wastewater treatment projects in terms of profitability.
BNamericas: Wastewater treatment levels in Mexico average around 60%. What can the government do to increase the level of treatment?
Sánchez: While the figures have increased a little recently, treatment levels continue to be lower than desired. For the past few years states across Mexico have been aggressively developing wastewater treatment projects.
I think Mexico can definitely achieve an interesting wastewater treatment percentage in the short term.
BNamericas: Do you think the projects like the Atotonilco wastewater treatment plant being developed in Edomex could be replicated in other cities across the country?
Sánchez: It's a very big project, as is required by a large metropolis such as Mexico City. With a lot of forward planning, it could effectively be replicated across other large cities, although the current scheme that requires smaller plants is more flexible and easier to realize.
Wastewater treatment is a hot topic in Mexico in general.