Global water services firm recognizes environment concerns of new expansion

The world's leading water services provider, the French company Veolia, is savoring the latest development of Lanzhou New Area as it expects to tap into an increased demand for water supply.

"We have a long presence in China and are very happy to participate in Lanzhou's development, because it is becoming a very important place," says Guillaume Dourdin, Veolia Water's vice-president for China and CEO for North West Region.

"It is very exciting news for the city and also it is a very interesting opportunity for us. The new area is going to attract a lot of investment, and companies will increase their need for water services."

Veolia's water laboratory in Lanzhou. The French company says it has spent 20 million yuan renovating it. [Photo/China Daily]

But the opportunity also involves a major conservation challenge, he says.

"The more investment coming in, the more environmental preservation is going to become an important issue in water service and waste water management."

China is different to the other developing countries in which Veolia Water operates, Dourdin says.

"With its large population and size, China has many unique features which bring challenges to environmental protection. The industry also has to face more stringent regulation, as indicated by the country's 12th Five-Year Plan (2011-15)."

He says China will face challenges concerning water availability, quality and preservation of resources, especially in the western regions.

Lanzhou has many heavy industries, such as machinery manufacturing and chemical works, which require a lot of water and environmental monitoring.

"That provides us with the opportunity and also an interesting challenge. It is a challenge we like, because we consider that with our technology and service, we can make a difference."

Founded in 1853 as Compagnie Generale des Eaux, the company was renamed Veolia Water in 2003. With a workforce of more than 96,000 in 69 countries, it reported revenue totalling 12.6 billion euros ($16 billion) in 2011.

Veolia's partnership with Lanzhou began in 2007, when the company signed a concession contract with the Lanzhou Water Supply Company, acquiring a 45 percent stake of the municipal water company for 1.7 billion yuan ($272 million).

"At that time, we decided to cooperate with Lanzhou, because it promised to be a developing city," Dourdin says.

"We take care of all the water services, including production of drinking water, distribution and management of network and customer services."

Currently, Veolia's contract is limited to the old city, but it is in discussions with the Lanzhou authorities about providing water for the New Area.

Dourdin visits Lanzhou every two months, and what impresses him most is how quickly the city is changing.

"When speaking of China, two words come to mind - urbanization and industrialization. China has been experiencing rapid growth in the past decade and will probably see it continue in the next.

"I am fascinated to see the changes, some big, some small. After some time in China, you may get used to it; to seeing a bunch of buildings coming down and new buildings going up. But when bringing my French colleagues to visit, they are amazed."

Dourdin says developing countries represent about 30 percent of Veolia's business, and the company aims to increase that to 50 percent.

The company won its first water management contract in China in 1997 for Tianjin.

"The key advantage of Veolia is that we are able to bring global expertise to a local context and customize our services based on local needs," Dourdin says.