Opportunities &

Realities in Mexico's
Water Sector
May 2010
Vincent Lencioni
LGA Consulting
 Outline of 4 Part Presentation
A. Current Situation in Water Sector
– Problems & current Infrastructure – Public & Private
B. Opportunities in Water Sector
– Public & Private Sector Needs, Budgets, Activities
– Preferred Products, Targeted Segments, Goals
C. Opportunities in the Context of Sector Realities
– Regional challenges that limit access to and the
viability of many public and private sector projects.
D. LGA Assistance: How and why we can help.
 A. Current Situation - Outline
• Brief Water Sector Overview
• Brief Analysis of state of Mexican
economy in the context of water sector
• 10 Sector Problems & Challenges
• Wastewater treatment – Industrial & public
• Treatment Plants – Industrial & public
 A. Water Sector Overview
Sector Dynamic
• Geographical Challenges
– North vs South
– Coastal vs Interior
• Decentralization
– 13 Water Basins
– States & Municipalities
– Funding Realities
• NIP & Water Plans
• Gov’t Bid Dynamic
– Nafta weakness, problems
identifying & following bids
• Private vs. Public
Economic Climate Affect
• 2009: Worst since ‘32
– Construction down 7%
– Industry fell 20%
– Govt revenue & spending
– Water: Public > Private
• 2010: “Moderate
Reactivation”
– Public still strong, private
up 2nd half, solid macro.
• 2011: Recovery Year
– Construction & Industry up
– Water: Private & Public up
 A. Related Economic Info
• GDP
– 2009:Down 8%
– 2010 & 2001: up 4% each
• Infrastructure Spending: $47.8 B in 2010 =
5% of GDP
– Both Historic figures
– 5% was target for healthy growth
• Mexican Imports
• 2010: Up 10%; 1st Qtr: Up 12%
• Exports up 10% as well
• By Segment (1st Qtr, 2010)
• Consumer: 37% up (31)
• Intermed: 20% up (23)
• Capital: 11% down (22)
• Mexico Demographics
• 120 million population
• 40% (1-19); 24% (25-34)
• Sector Dynamic 2009
– Agriculture*: Up 1.8%
– Water/Electricity* Up 1.2%
– Food & Beverage*, Paper*, Chemicals*: -1 to
2%
– Clothing/Textile: -10%
– Machinery/Equip: -20%
• 2-5% Growth in 2010
• Construction
– 2009: Down 7%
– 2010: Up 2-4.6%
• Slow 1st Half, 8% last Qtr
– 2011: Recovery Year
• Public Revenue
• Oil Price: $60 (2009) to 75 (2010)
• Source for 1/3 of govt spending
• Balance of Payments solid
• Fiscal/Financial Stability
• Banks: Revenue up 20%, 4th Qtr 2010
 A. Crime & Violence: Impact on
Business
• Fighting the Drug Cartels: Past vs. Present
– Right fight, hard to win, negative image
– Historic military and US cooperation
– Guns vs Drugs; Supply vs. Demand
• Business Travel Concerns for Foreigners
– North/Pacific Coast vs. South/Central
– Victim Profile Dynamic: 7000 deaths in 2009
• 93% = Police, Military, Narcos
• Kidnapping (locals only) vs. General Crime (anyone)
– Federal Oversight Up, Local Police Concerns Persist
• Only 6% of Mexican companies consider crime & violence to have
major impact on business activities
– Traditional international & domestic economic concerns
 A. 10 Water Sector Problems
& Challenges
1. Geographical Challenges
– 2/3 of water in the south: 25% population, 15% GDP
– 1/3 of water in the north/center: 75% population, 85% GDP
– No water transfer system, No water collection strategies
2. Overexploited aquifers: 30%
– 653 aquifers: over 100 severely overexploited, 68 close
3. From 18,000 m3 (1950) to 4,400 m3 (2010) per capita
– But Mexico is still 7th in world rankings: 1. Canada (90,767), 2. Brasil (45,039), 3.
Argentina (20,707), 6. US (6,902)
– Area of need but society that does not perceive the need yet
4. Conagua says 40% national wastewater treated, probably less
– 12% Federal District, 18% Jalisco, 21% State of Mexico
– Only 5 states treat over 2/3 of their municipal waste
– Other sources: Industrial below 10%, municipal below 20%
 A. 10 Water Sector Problems
& Challenges
5. Traditional Water Statistics: Urban good, Rural needs work
– Potable Water Coverage: 97% Urban, only 76% Rural
– Sewer/Sanitary Coverage, 96% Urban,only 63% Rural
6. Law requires 100% meter coverage, reality: 65% or less
– 80% coverage in large (>250,000) cities, minimal to none in smaller areas
– Even where coverage exists, water often does not flow because of (a) lack of water, (b) poor
delivery systems, or © lack of pressure
– Water authorities tend to buy cheap meters that do not last & breakdown
7. 50-60% of water lost in delivery system, little recent improvement
8. Water Infrastructure Competitiveness in Latam
– Rated far below Brazil, Chile, Columbia, and Argentina
– 20% below Latin America average, even behind Peru
9. 64th in Infrastructure Index of Competitiveness
– Well below Brazil as well as Chile (35) and Panama (46)
10. Known for having some of the slowest and most bureaucratic water project
development processes in Latin America – heard/said in lots of quarters.
 A. Municipal Wastewater Treatment Plants,
Installed Capacity, Treated Volume (1992-2008)
Municipal Wastewater Treatment Plants 1992-2008

Year Treatment Plants Installed Capacity Treated Volume

(l/s) (l/s}

4x more plants since NAFTA, 2x installed capacity

since 1997 and 2x treated volume since 1999.
Calderon: Plants up, capacity & treatment not.
 A. Wastewater Plants and
Treatment by River Basin
No. Hydrologic Region = Number of Plants in Installed Capacity Water Treated
Organismo de Cuenca Operation (m3/s) (m3/s)

Lerma = 25% of plants; Rio Bravo = 25% of

Installed Capacity and Water Treated; using
75% of Installed Capacity, Need a lot more.
 A. Treatment by Basin Analysis
Municipal wastewater treated by 13
River Basins (Total = 100%):
• Conclusions
– Majority of Treatment in
1.- Rio Bravo/Northern Border 26.5% North (#1,3,5,7,8)
2.- Lerma-Santiago-Pacífic 21.5% • Over 50% of all treatment
3.- Pacific North 8.0%
4.- Valley of Mexico 7.4% – Significant Treatment in
5.- Penisula of Baja California 7.3% Center (#2,4,6)
6.- Balsas 6.5% • About 1/3 of rest
7.- Central Northern Basins 4.8%
8.- Northeast 4.0% – Insignificant treatment in
9.- Center Gulf 3.7% south/gulf areas
10.- Southern Border 3.1% • Less need for water, less
11.- Gulf North 2.7% industry and population
12.- Pacific South 2.3%
13.- Península of Yucatan 2.0%
A. Municipal Wastewater Treatment
by State (Only Table Showing Coverage %)
State Municipal Wastewater Plants Coverage (%)
Number of Installed Capacity Treated Water (l/s)
Plants (l/s)
A. Municipal Wastewater Treatment
by State Analysis
• Majority of Plants in dry, • Installed Capacity
northern states 1. Nuevo Leon (12%)
1. Durango (167, 10%) 2. Chihuahua (8%)
2. Sinaloa (136) 3. State of Mexico
3. Chihuahua (119) 4. Baja California
• Most important states: 5. Federal District
fewer plants • Treated Water
– State of Mexico (105) 1. Nuevo Leon (14%)
– Jalisco (96) 2. Chihuahua (7%)
– Nuevo Leon (61) 3. Baja California
4. State of Mexico
 A. States Treatment Woes
- Less than 25% of waste water • Only 6 states treat more
treatment coverage
1. Yucatan 2.1%
than 2/3 wastewaters
2. Campeche 3.8% • 5 Top States: All in North:
3. Hidalgo 7.5% (DF wastewater)
1. Nuevo Leon = 100%
4. Zacatecas 12.1%
5. Federal District 12.9% 1. AGS = 100%
6. Tabasco 18.3% 3. Baja Cal = 93%
7. Morelos 18.9%
4. Chihuahua = 71%
8. Queretaro 22.7%
9. Jalisco/Guadalajara 24.7% 5. Sinaloa = 68%
10.State of Mexico 21.1%* • Aquaculture focus
* 7th most plants but 3rd most 6. QuintanaRoo/Cancun=67%
installed capacity & 4th most
volume treated. • Eco-tourism focus
 A. Urban (Industrial & Municipal)
Wastewater Discharge Realities (Present)
Present situation and Projection of Water Treatment of Urban Wastewater

Cost of total Annual

Discharge of Present Discharge of Needs of accumulated operational
wastewater capacity wastewater treatment investment in cost in
at present of treatment in 2020 2020 2020 ( Ref 2) 2020 (Ref 2,3)

m3/s 231 54 304 250 2780 2130

Biochemical
Oxygen
Demand
tons/year 1.8 0.42 2.36 1.94

Ref 1.- Includes plants that are not currently operating

Ref 2.- Millions of current US dollars
Ref 3.- Includes existing plants (operating & non-operating) and those under construction

Only 23% of urban wastewater & 23% of BOD is

being treated. 2002 treatment need: 4-6x. Cost:
$2.78 Billion in Investment & $2.13 annually.
 A. Non-Urban Industrial Wastewater
Treatment Realities (Present)
Present Situation and Projection of Industrial Wastewater

Cost of Annual
Wastewater Wastewater Treatment accumulated Operational
Discharge Treatment Discharge Needs investment Cost
At Present At Present In 2020 In 2020 In 2020 In 2020
(millions of (millions of
dollars) dollars)

m3/s 64.5 5.3 76 70.7 $1,571 $1,060

Millions
of DOB
per
ton/year 1.6 0.12 1.88 1.76

Only 8% of top 1387 non-urban companies’

wastewater is being treated. 2020 treatment
need: 13x: $1.5 B in investment, $1 M annually.
 A. All Urban & Industrial Wastewater
Treatment, Installed Capacity, Treated
Volume (Present)

Present Situation and Projection of National Waste Water

Cost of Annual
Wastewater Wastewater Deficit accumulated Operational
Discharge Present Discharge in treatment investment Cost
At Present Capacity In 2020 In 2020 till 2020 in 2020
(millions of (millions of
dollars) dollars)

m3/s 295.5 59.3 380 326 $4,350 $3,190

Only 20% of all Wastewater is treated today; Needs:

$4.35 Billion in investment until 2020, $3.19
Billion in annual operating costs as of 2020.
 A. Industrial Treatment Plants:
Type and Number
Total Industrial Plants: 2082 (100%)
• Primary: 648 (32%)
• Adjusting PH levels & removing materials > .1mm
• Secondary: 1185 (56%)
• Removing colloidal & dissolved organice materials
• Tertiary: 66 (3%)
• Removing dissolved materials including gases
• Other: 183 (9%)
• Without above or other concrete objectives
 A. Industrial Wastewater Treatment
Plants & Water Treated by State
Less than 60% used capacity; #1 State of Mexico (319,
15%); #3 Veracruz (161): 20% total installed capacity
& 25% total water treated, 2.5x State of Mexico.
State Number of Installed Water State Number of Installed Water
Plants in Capacity Treated Plants in Capacity Treated
Operation (m3/s) (m3/s) Operation (m3/s) (m3/s)
 B. Opportunities - Outline
• Private and Public Sector Definition
• Federal & Local Water Budgets
• Goals: 2012 Water Plan, 2030 Water Agenda
• NOM/Standard Development
• Competition Analysis
• Domestic vs International Product Preferences
• Industrial Discharge Regulation
• Water Rate Comparison and Analysis
B. Private Water Sector Targets
- Private water infrastructure
- Hotels & Resorts, Restaurants, Golf Courses, Malls, Industrial
Parks, Residential, Hospitals
- Industry water pollution
- Commercial & Industrial Discharge & Treatment
- Industry water reuse & savings
- Water costs, Water reclamation, water capturing systems
- Manufacturing processes using purified water
- Segments
- 2030 Target Industries: Sugar, F&B, Paper, Metals
- Problem Segments: Textile, Pharma, Chemicals, Leather
- High Use Segments: Agriculture, Aquaculture
 B. Public Water Sector Targets
A. Aquifers and Water Supply Solutions
- Limited Resources
- Pollution – Water Treatment
B. Clean Water Delivery Systems
C. Potable & Wastewater Measurement Products
D. Sewer & Drainage Collection & Distribution
Systems and Flood Prevention
E. Wastewater Treatment & Reuse Strategies
F. Segments: Agriculture, CFE, Pemex
 B. Federal & Local Water Budgets
• Conagua (National Water Commission) Budget
- Since 2006: 125% increase ($1.2 to 2.7 B) and over $100 Billion Pesos
($8-9 billion US) invested
- 2010: 5% up despite economy & cuts in other infrastructure sectors
- Potable water & sewage projects = $1.45 B US, double 2008 budget
- Agriculture: $577 Million US, 60% greater than 2009 budget
• State & Local Water Budgets
– Responsible for 95% of all water bids; try to remain independent of
Conagua technical specification and oversite, some friction
– Dependence on Conagua funding: majority of projects
• Smaller/Poorer States & Municipalities: 70-90% of funding
• Larger/Wealthier Entities: Some without assistance, others 40-70%
• Fonadin Water Trust & Banobras Financing Options
– Fully Funded, unused, still available to federal & local entities
– Banobras and other development bank options still viable & active
 B. 2030 Water Agenda
Priorities
All municipal water treated Increased Irrigation technology

All rivers % lakes without River Basin auto administration

trash

Contamination All treated water

sources under 100% River Basin reused
control Clean
Rivers Equilibrium
Efficient regional
All industrial order
water treated
Universal Habitable
Water areas free
Urban suburbs Coverage from floods
Flood zones without
connected to the habitations
network

All rural areas with potable Disaster alert systems and

water prevention
B. Goals: 5 Year Water Plan (2012)
& 2030 Water Agenda
• 5 Year Plan (2007-2012) • 2030 Water Agenda
– Potable water coverage: 92% – By 2016: all major urban
– Sanitary/sewer coverage: 88% areas free from risk of flood
– Wastewater treatment: 60% – By 2015, All Irrigation
– 8% increase in efficiency from technified, all treated water
80 local water utilities
reused
– From 64th in world in water
infrastructure to between – 2024: Complete rural
Panama (46) & Chile (35). potable water access
– Improve Water Productivity in – 2025: All Industrial
the Agricultural Sector
wastewater treated
– Better flood prevention actions
• – 2030: All aquifers and
Results So Far: Decent effort
but well below expectations contamination in balance
 B. New NOM Regulations in 2010
Opportunities to influence technology & infrastructure specifications:
• Minimum flow levels for river basins to ensure caudal preservation/recuperation
• Water consumption specifications for plumbing/bathroom devices;
• Specifications and test methods for potable water system, sewer, and domestic water intake
related to hermetic questions;
• Maximum allowed pollutant limits for brine water discharge of sea water desalination plants
into national waters and related environmental impacts;
• Modification of NOM-011-CONAGUA-2000, which establishes the specifications and methods
to determine the mid-annual availability of national waters;
• Discharge for urban wastewater that is not connected to a sewer system;
• Requirements to obtain the seal of “Ecological Grade” for laundry washing machines;
• Specifications for rainwater discharge in urban zones; and
• Flow control devices, water flow regulators, and test methods.

Process includes committee meetings to discuss appropriate approaches and

technology. Domestic companies and foreign companies that can demonstrate their
focus in the area are allowed to participate in the process, LGA can assist.
 B. Local & Foreign
Competition
- 70% of Products Used in Water Sector: Imported
- US Provides 2/3 of imported products to water sector
- Israeli: Strong and growing presence
- Treatment plants (Companies: Aqwise, Amiad, Odis,Yamit)
- Waste water treatment products (dewatering systems),
filtration products (plastic, steel and automatic filters).
- Some in-roads with metering products (MasterMeter/Iroda)
- Spanish: Engineering firms/Integrators (OHL)
- Chinese: Commodity products up with quotas off
- German: Products and Equipment mostly
- Mexican: (See Preferred Products Page)
 B. Water Product Preferences
Imported Product Both Domestic Product
Preference Preference
GIS & SCADA Analyzers & Contractors & Construction
Manometers
Automation & Controls Filtration Equipmt & Pipe/Water Distribution
Equipment Products Equipment
Wastewater –Reuse Equipment Treatment Plant Sludge Handling Systems
Systems
Treatment Plant Systems Tanks Gates & Flumes
Data Management Systems* Leak Detection Metal Fabrication
CIS & Meters Laboratory & Chemical Feed Equipment
Sampling Products
Well Drilling/Systems Process Equipment Corrosion & Cathodic
Aerators, Diffusers Protection/Control Equipmt
Chemicals Compressors & Chlorine
Blowers
Desalination Equipment Disinfection Systems Coating & Lining

Leak Detection Consulting* Sewer/Collection Systems &

Equipment
Laboratory & Sampling Pumps & Valves Traditional Treatment Options
Equipment
Rain Water Reclamation Storm/rain drainage
Solutions
 B. Industrial Discharge
Regulation: Nom 002 Semarnat
Maximum Levels Allowed
Parameters Monthly Daily
(miligrams per liter, except when Average Average Instantaneous
something different is specified)

Greases & Oils 50 75 100

Sedimented Solids (mililiters per liter) 5 7.5 10
Arsenic 0.5 0.75 1
Cadmium 0.5 0.75 1
Cyanide 1 1.5 2
Copper 10 15 20
Hexavalent Cromium 0.5 0.75 1
Mercury 0.01 0.015 0.02
Nickel 4 6 8
Lead 1 1.5 2
Zinc 6 9 12

Less stringent than US & Europe standards;

Lower standard + unclear enforcement = ?
 B. Comparative Water Rates
(Price per m3 in pesos, minimum 1000 up to 15,000 meters)

• Poorer Area Rates • Richer Area Rates

– Federal District: 2 – Federal District: 9
– Atizapan (Edomex): 5.5 – Naucalpan: 11.1
– Tlalnepantla (Edomex): 7.6 – Tijuana: 12.3
– Leon (Gto): 8.8
– Tlalnepantla: 13.1
– Naucalpan (Edomex): 10.2
– Tijuana (BC): 12.3
– Huixquilucan: 15.1
– Huixquilucan (Edomex): 15.1 – AGS: above 25
– Aguascalientes (AGS):
above 25
 C. Realities Outline
• Government & Societal Realities/Factors
• Revenue Realities
• Factors affecting Industrial Discharge
Regulation
– Carrots & Sticks Analysis
• Doing vs. Talking Analysis
• Good vs Bad Projects
• BOT Analysis
 C. Limiting Government
Factors
- Decentralization
- Municipalities and Basins: Domestic & Agriculture
- CONAGUA vs ANEAS
- Slowness
- Process in getting bids out and post-bid process
- Budget Process and Payment issues
- Limited government resources, low efficiency
- Corruption
- Tendency towards Traditional Technology
- Limited market information from Conagua
- Low cost & prices, limited water revenue
 C. Limiting Societal Factors
• Water considered a commodity
– Population, Farmers, in General
• Drinking Water Quality Challenges
– Problems with source & delivery contamination
– Low use and expectations from population
• Smell, Taste, Consistency, Minerals
– Low demand for tap water, strong bottled water sector
• Most bodies of water contaminated
– No polluted body of water has been recouperated
– Low societal expectations for water
– Culture: Avoid complaining, find a way around
 C. Revenue Realities
• Federal/Conagua • State/Municipal
– Conagua income – Decentralization:
stream = no growth Transfer of Authority &
and below preNafta Responsability without
– 1994: 9.7 Billion pesos sufficient revenues
vs. 8.1 Billion in 2006 – Politically impossible
• Revenue emphasis up to increase domestic
but still problematic end-user rates
– Low subsidized rates – 80% of industrial &
to local entities commercial billed but
– Bill 20% of industrial & corruption/inefficiency
commercial directly affect income stream
 C. Factors Affecting Industrial
Treatment Viability & Action
• 4 Principal Factors • Degree of Concern
A. Cost of Water A. Cost: North vs South
B. Regulatory and in general
Environment B. Regulatory: Very
- Inspections & Fines ambiguous coverage
A. Importance of water • 60% vs 40% vs < 20%
in mfging process • Federal, State, Muni?

B. Level of pollution C. Heavy water users

from mfging process seem to be targeted
- Sugar, Textile, F&B D.Unclear to what extent
high polluters targeted
 C. Wastewater discharge:
Carrots & Sticks
• Government Regulations
– NOM 002 Inspection and Declaratorias Process
• In effect since 1998, previous regulations voluntary
• Required compliance, periodic inspections, payment of discharge
rights (vs. fines) when non-compliant
• Next step: requirements according to pollution levels of specific
water basins and municipal discharge levels
– Sufficient regulations, insufficient enforcement
• Unclear regulatory responsibilities (local vs. federal)
• Still questionable water official regulation: “whimsical”
• Enforcement differences: New vs. Existing companies
• When economic crisis hits, authorities tend to back off
– 2010 Goal: 100% compliance; Reality: 20-40%
• Carrots & Sticks are just not there or on the horizon
 C. Impact of Carrots & Sticks
• Sticks
– Fines/Discharge Rights
• No purchases driven by fear
– Different in parts of Latam
• Amounts not worrisome
– Closures
• Do not hear about them
• Strategy of targeting new vs. Existing
companies
• Crisis or not,
– Enforcement
• Do not hear companies complaining
about it (like tax)
• Corruption vs inefficiency
• Carrots
– Few and ineffective
• No true incentive program
regarding potable use or
wastewater treatment
• No tax incentives for installation
of systems
– ProSanear Program
• Discharge fees paid will be
reimbursed if an effort is made
to comply
• 86 companies in 2009, 34 more
in 1st Qtr 2010
• Repayment: Not annual
 C. Doing vs Talking: Status of
Treatment Plants Projects
• Cons (Talking)
– Atotonilco bid dispute
– Concerns about 2010 timing of
Caracol & Zumpango plants
– Rumors of delays with Nextlalpan
& Vaso El Cristo Plants
– Some Conagua official comments
about lack of funds for 2010
– Apparent slow down in projects
and awards
• Classic & New Budget
Assignment Issues
• Only 17% of 1st Qtr Bids awarded
so far
• Are authorities being told to slow
spending despite having
budgeted funds?
– Mexico reputation for talking about
projects but not delivering
• indefinite unexplainable delays
• Pros (Doing)
– 5% GDP spent on infrastructure
– Since 2006: Over 200 new plants and
43 rehabilitations
– 50 under construction: end 2009
– Recent, Historic Awards
• Largest Latam treatment plant in
Federal District
– Create 60% coverage
• Two large plants in Jalisco
– Create 100% coverage
– Conagua officials: 100 new plants in
2010
• 31 bids: 1st Qtr 2010
• Funding up, financing ok
• 2012 goal: 60% coverage: Have to work
on problem, BOT medium-term at best
C. BOT: Opportunities & Concerns
• Mexican govt push before & after crisis
– Even with continued increased funding for plants &
systems, perception that need more
– Well behind world & Latin America in BOT projects
• Problems & Concerns
– Juridic Insecurity concerning contracts
• Concerns: Local political issues and election impact
– Payment Guarantee Issues
• Poor gov´t payment image, concerns and trends
• Poor gov´t revenue stream: Water viewed as commodity
 D. LGA Services Outline
• Water Sector Activities
• Why LGA Can Help
• LGA Website & Materials
• LGA Services for Water Sector
 D. LGA Water Sector Activities
• 15 Years working with Wisconsin companies
with products for water sector
• 2 years of formal & extensive water focus
• Quarterly Mexico Water Report
• Monthly compilation & review of water bids &
awards
• Development of Intermediary lists
– Distributors, Reps, Integrators, EPCs, Consultants
– Winners of Awards, Participants in Bids
• Interaction with local water officials and
intermediaries for early project information
 D. Why LGA Can Help
• We understand the water sector pretty well
– Study it every day (clients, Quarterly, Bids)
– Knowledge increasing continually
• We know many key gov´t officials
– Continuous/Regular Outreach at federal and local levels
• Reaching out to water officials in 12 states
• We know many of the intermediaries/integrators
– Reaching out for searches, networking
– Following them via bids (winners, participants)
– We may not know them, but we know how to locate them
• We know that what we do not know we can find and understand
Strength: focus on a particular company & identify success strategy
– Private: 15 years of industrial & commercial sector research, market
analysis, business development, intermediary searches
– Public: Active & focused on segment like no other firm in Mexico
 D. LGA Website & Sector Info
• New Website: www.lgaconsulting.com
• Water Section: Bids, Services, Clients, Quarterly
Water Report
• Staff of 7, experienced and bicultural
• List of Water Sector Clients
– Pumps/Meters/Valves, Filtration, Municipal,
Residential/Retail, Industrial, Commercial
• Blog & Presentations – Variety of Water Issues
• Specific Services: Water Sector Products
 D. LGA Services: Water Sector
• Water Product Market Analysis
• Water Product & Channel Viability Analysis
• Project & Client Business Development
– Early Sales Pipeline Assistance: Customer research
& qualification, database development, prospecting
calls, assessing competition
• Intermediary/Partner Location
– Distributors, Reps, Integrators, EPCs, Partners
• Intermediary & Client Evaluation for business &
payment issues
• Related legal, regulatory, fiscal services
 Annexes
• Demand for Water 2020
• Domestic Water Price Comparison
• Commercial & Industrial Water Price
Comparison
• Tips on winning projects
 Water Demand by Sector (2020)

Km3/year (m3/s)

National Agriculture Industry Public Other Difference

Supply 2020-1997

3180 2640 95 381 64 856

100 83% 3% 12% 2% 27%

Other Sources establish current water demand as:

77% Agriculture, 12% Public, 9% Industrial.
 B. Domestic Water Prices:
AGS vs. Naucalpan
Naucalpan AGS Naucalpan AGS Naucalpan AGS

DOLLARS 30-45m3 31-50m3 75-100m3 75-100m3

Domestic A Popular A $8.72 $25.20 $48.64 $235.36

(Price per additional m3) $0.76 $2.42 $1.25 $10.08

Domestic B Popular B $21.12 $32.16 $72.72 $300.96

(Price per additional m3) $1.00 $2.83 $1.63 $10.08

Domestic C Medium $22.32 $38.00 $74.64 $347.20

(Price per additional m3) $1.01 $2.83 $1.55 $12.16

Domestic C High $22.64 $38.00 $76.08 $347.20

(Price per additional m3) $1.04 $2.83 $1.50 $12.16

Aguascalientes (AGS) considered most expensive

water in Mexico; Naucalpan average/low.
 B. Commercial & Industrial Water Prices:
AGS vs. Naucalpan
How do they compare to the US?
Naucalpan AGS Naucalpan AGS Naucalpan AGS

Are they sales drivers or inhibitors?

DOLLARS 75-100m3 75-100m3 500-700m3 500-1000m3 1200m3 plus 1500m3 plus

Commercial $133.12 $339.52 $1,929.04 $2,502.00 $5,313.28 $6,139.60

(Price per additional m3) $3.09 $8.88 $4.35 $4.04 $3.42 $2.42

Industrial $136.32 $414.24 $1,929.04 $2,607.04 $5,313.28 $6,244.64

(Price per additional m3) $3.16 $10.08 $4.35 $4.04 $5.30 $2.42
 C. Tips on winning projects
• Foreign company
problems
– Importance of Mexican
intermediary
• Public: all bids must go
through local entity
• Private: Less so but still
key to success
– Keep tabs on projects
• Intermediaries not always
proactive or don´t/won´t
share info
– Competition & Bribes
• Non-US companies: get
business at any cost.
• Tips for Success
– Develop relationships with
Mexican intermeds
– But don´t give exclusivity
nor rely on them
exclusively for
• Market Information
• Business Development
– Early access to entity
• Spec Development key
• “Right” Intermediary key
– Bring Financing Plan
– Avoid non-Professional
Water Officials & Entities