CHANGZHOU • Global sewage and water treatment firms are eyeing opportunities in an unsavoury place: a growing pile of waste in China, the world's most populous nation.
The country has been for years battling contamination from fertiliser run-offs, heavy metals and untreated sewage. A survey in 2015 showed that nearly two-thirds of China's underground water and a third of its surface water was unfit for human contact.
To reverse this, China has pledged to lay 126,000km of new sewage pipes by 2020, enough to circle the globe three times, and raise urban wastewater treatment by 50 million cubic m a day, equal to 20,000 Olympic-size pools.
This has opened the floodgates to sewage specialists, such as Israel's Emefcy, RWL Water - controlled by Estee Lauder's Mr Ron Lauder, and France's Veolia, who want to grab a share of the market, with China's annual environmental spend estimated at 3 trillion yuan (S$609 billion) over the next five years.
Mr Tong Weidong, vice-chairman of China's legal work commission, said: "Right now, the problem of wastewater from agriculture and the countryside is very serious and wastewater treatment work is a weak link."
Recently, there were reports of villages dumping sewage into the reservoir of the Three Gorges Dam, the world's biggest power station, spanning the Yangtze River in central Hubei province.
But change is afoot, Mr Tong said.
Length in kilometres of new sewage pipes China has pledged to lay by 2020.
Local officials will be forced to improve sewage capacity under new legislation that makes them directly responsible for water quality.
Cities need to hike treatment rates to 95 per cent by 2020 from 92 per cent in 2015, while rural regions in central and western China need to reach 50 per cent.
Mr Yong Wong Jin, the chief executive for Emefcy in China, said: "The market is massive."
It estimates the potential in Beijing and nearby provinces at more than US$1 billion(S$1.4 billion).
Foreign players have been in China for a while - such as Veolia, which has water projects across the country - but the focus on a large-scale clean-up has gained impetus only recently. China's latest five-year plan, released in 2016, emphasises tackling pollution, while in an action plan published in 2015 the government vowed to improve water quality nationwide by 2030, pledging to spend billions of dollars.
The local authorities, meanwhile, have struggled to fund their plans, opening the door for more private-sector involvement.
Emefcy plans to put eight small-scale sewage treatment units into operation in China by the end of this year and is building a local factory, saying its small-scale units can treat 20,000 litres a day, take two months to install and have significantly lower energy costs, making them ideal for the rural market.
General manager Xue Xiaohu at Jiangsu Greenway, which sells water treatment technology to the textiles industry, said stricter environmental standards are drawing in companies of all sizes, but big state-owned firms still dominate major projects.
China has promised to give environmentally friendly projects a leg-up by providing banks with more incentives to lend and encouraging green financing.
Offshore players have the added hurdle of navigating local rules and typically also need to team up with local partners. "There are challenges in dealing with local governments and that is where our partners kick in," said Mr Yong from Emefcy, which has a number of Chinese partners, including Zhejiang Provincial Energy Group and Jiangsu Jinzi.