Israel and Germany: It's All Water Under the Bridge


Last year, Red Herring business magazine said water will become the new oil. German-based conglomerate Siemens recently has shown its interest in buying liquid assets. Yesterday, the company announced a development agreement with Israel's national water carrier Mekorot to co-develop water technologies. The deal came as no surprise as last month, a Siemen's VP was at Israel's Agritech conference, the annual agricultural shindig, touting Israel as one of the world leaders in advanced water technologies. This year Agritech hosted a special water forum Tides of Change, which brought out potential investors and buyers from all corners of the earth looking to Israel for advanced water technology solutions. Visitors included China, Holland, Spain, the Ivory Coast and the US. According to a press release from yesterday, Siemen's agreement with Mekorot will join the two companies in a strategic partnership to develop and market technologies specifically for wastewater treatment and reuse, desalination, and water treatment security techniques and solutions. Siemens will have the opportunity to use Mekorot as a beta site for new technology, partial funding of R&D;, and exposure to new technology development under Israel's water technology incubator program.

"Water is an extremely precious commodity in Israel. The landscape there provides the perfect environment for researching and developing water technologies in 'real-world' conditions and then marketing and selling them globally," said Dr. Roger Radke, CEO of the Water Technologies Division of Siemens Group I&S.; "Nearly 2 billion people in the world today do not have access to clean drinking water and in the next 20 years, one-third of the population may be facing a serious water crisis," he added. "People are now only beginning to respond to the issues of clean water though investment and research, which will be critical to solving the world's water dilemma."

Siemens estimates demand for new water treatment, reuse and recycle technologies, estimated at $40 billion, will double in the next 8 to ten years.

Earlier this June, Canadian investment group SPI demonstrated its interest in being part of the water gold rush. SPI bought out Israel's first and only technology incubator solely devoted to advancing water technologies for $25 million USD, showing that Canadians too, despite the amount of water they possess, are looking to get into the water business.

Some stats on Mekorot: It is Israel's national water company with annual sales of $500 million. It supplies 1.3 billion cubic meters of water per year--90% of the drinking water in Israel and 70% of all the water supply in the country. The company's experience, know-how and advanced solutions enable Israel to successfully confront the water shortage, resulting from years of drought and its location on the desert fringe, and the rapid rise in water consumption.

Some stats on Siemens: Siemens includes the USFilter Group of Companies for building reliable water and wastewater treatment systems and services to municipal, industrial, commercial and institutional customers worldwide. The division "Water Technologies" is part of Siemens' Industrial Solutions and Services Group (I&S;) which is a system and solution provider for industrial and infrastructure facilities. In fiscal 2005 (to September 30) I&S; employed a total of 31,700 people worldwide and achieved total sales of EUR 5.390 billion.

More on water in Israel