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21/03/2007. Source:IVCJ.
Innovation in advanced water solutions has been synonymous with Israel for many years. In this IVCJ article, Mira Rashty, general manager of Waterfronts – Israel Water Alliance examines several water segments where Israeli companies are making waves. Today, the world’s water community knows that over the next 15 years the citizens of this earth will experience a 35 percent shortfall in consumable water. Israel is well acquainted with this problem, having existed under a "water shortage economy" for more than 50 years. Israel’s population has grown from less than one million when it achieved independence in 1948 to more than seven million today.
Despite being in one of the world's most arid regions, Israel’s constant growth in demand for water has been satisfied by more efficient water management including rain harvesting, the national water carrier (1964), a wastewater and sludge treatment plant (Hashafdan, 1969), flood reservoirs, the world’s largest seawater reverse osmosis (100 million m/y) desalination plant in Ashkelon, desalinated seawater (Eilat, 1997) and the introduction of innovative irrigation techniques for farming.
Israel's accumulated experience in the water field has resulted in an export sector with annual sales of $800 million. While traditionally the emphasis has been on agriculture, specifically low pressure irrigation systems, global water stress has prompted Israel to expand its focus to include water management, integrating water sources, desalination, water security and wastewater treatment among other areas.
In developing these advanced water solutions, dozens of Israeli companies have taken care to nurture technologies that preserve the environment, while providing the purest possible water quality. In pioneering sewage recycling, Israeli firms have also developed innovative methods of sewage treatment including municipal sludge treatment, on-site compacting of sewage and biological treatment of solid waste, industrial effluents, medical waste and biologically contaminated materials.
Historically, much of the credit for Israel's remarkable achievements in water production is due to Mekorot, the national water company. Mekorot was established in 1937 to serve the prestate population. By the mid-20th century, Mekorot's biggest challenge was to overcome regional and seasonal inequalities in rainfall. The pride of the nation was the completion of the National Water Carrier in 1964, which transported water from the Sea of Galilee (Israel's largest reservoir) in the relatively wet north of the country to the desert in the south.
Drip system revolutionizes irrigation
In the early 1960s, an Israeli water engineer developed the concept of drip irrigation by leaking water onto designated spots through plastic piping, thereby maximizing the effectiveness of limited water resources. Shortly afterwards, Kibbutz Hatzerim established the Netafim production facility to produce drip irrigation systems, which has grown to a $350 million business for Israel's leading micro-irrigation company. Netafim, together with Israel's other irrigation equipment manufacturers, including NaanDan Irrigation Systems and Plastro, controls about half of the global market estimated at $1 billion-$1.5 billion annually.
Drip irrigation allows for an economic distribution of fertilizer via drip pipes – a process known as "fertigation." It uses saline or minimally treated sewage water, since the water is delivered directly to the ground, thus minimizing health risks and continuously washing away salts from the root system.
Industry experts expect the current demand for irrigation products to soar should water subsidies be withdrawn by governments in the US and Australia.
Desalination – the future hope In recent years desalination has emerged as Israel's major hope of keeping up with demand for water, and the country has become a world leader in transforming salt water into drinking water. In the past 20 years, Mekorot has built and operated small desalination plants, which serve the southern parts of the country. Some 29 small plants generate 25 million cubic meters of water per year, mainly from brackish water.
The Ashkelon seawater reverse osmosis (SWRO) plant is the world’s largest desalination plant. The plant will eventually produce 100 million cubic meters of water annually, about 5-6 percent of Israel's total water needs or 15 percent of the country's domestic consumer demand. The plant design includes membrane desalination units and facilities for seawater pumping, brine removal, and raw water pre- and post-treatment. The project had cost $250 million and was funded by a mixture of equity (24 percent) and debt (77 percent). IDE Technologies, which provided the innovative reverse osmosis technology, is interna-tionally recognized as a pioneer in the delivery of sophisticated water solutions. Other Israeli companies involved in desalination include Crytec, Fluid Ice Systems, Odis Filtering and Nirosoft.
Emphasis on wastewater treatment and reclamation
For its size, Israel has devoted more resources to the development of wastewater treatment and reclamation than any other country. It leads in the rate of wastewater effluents reused for agricultural irrigation and wastewater reuse per capita, ranking second in overall wastewater reuse after California.
Today, Mekorot treats 32 percent of Israel's wastewater (160 million cubic meters of a total of 500 million cubic meters a year) in nine plants. Mekorot reclaims about 75 percent of Israel's reused effluents. Even though the reclaimed water is as pure as the country's freshwater supplies, the purified water is for agricultural use rather than household consumption.
Side-by-side with this expertise in water reclamation, some Israeli companies specialize in sewage treatment. The Tahal Group, for example, assists Mekorot in water planning and wastewater treatment. Tahal is Israel's largest engineering firm, specializing in consultancy, planning, management, construction and operation of water and wastewater projects. With annual sales of $60 million, Tahal has overseen projects on every continent.
Other companies have specialized in various technological aspects of wastewater treatment, such as nutrient or contaminant removal (AqWise, Bio Dalia), innovative water recycling solutions (Hetz Ecology, Elif) and advanced nanotech membranes (Nano-Pro, BPT).
Water management brings it together
The most sophisticated technologies have enabled Israel to make a little water go a long way. But old fashioned planning, management, efficiency and paying meticulous attention to infrastructure maintenance have allowed the country to optimize its limited water resources. The Israeli water technology solutions industry has developed a wide range of products, systems and applications to control, monitor and measure water and identify leakages. Bermad Technologies, based on Kibbutz Evron in northern Israel, has been producing leading edge water valves for over 40 years. The company develops and produces automatic control valves for water pressure and flow regulation, reservoir level controls, and pipeline and pump water hammer controls. In the metering and measurement sector, Arad Technologies has developed the world’s first transmitting meter, which combines mechanical accuracy with micro-electronics. The operation of Mekorot’s installations is based on sophisticated, computerized remote-controlled systems that assure reliability and high quality of water supply.
Israeli firms active in assuring water quality
Water quality is one of the world's pressing public health concerns. Water borne diseases and pollution are being combated by the development of new methods for preventing and detecting contamination. In addition, innovative filtration techniques, as well as chlorination and other treatments, have been developed to improve existing water sources and meet increasingly stringent, international, microbiological water standards. Many Israeli companies are global leaders in this sector, developing and manufacturing systems that either improve the quality of fresh water or enhance the purification of reclaimed wastewater. Amiad Filtration Systems has developed fast, efficient, self-cleaning technologies ensuring a continuous flow of filtered water. Owned by Kibbutz Amiad in Israel's Upper Galilee, Amiad recently enjoyed a successful IPO on London's Alternative Investment Market (AIM). Amiad offers suction scanning technology, thread technology and a range of filter elements that have been installed in thousands of filters and filtration systems worldwide.
Israeli companies involved in water quality markets provide a diverse range of equipment, services and solutions including filters and valves, pipes and fittings, softeners, and monitoring, measuring, anti-leakage and security systems.
Water safety and security is foremost concern
Protecting water resources from contamination is an ever-increasing challenge. Israel has developed technologies and systems that deal with the ongoing threat to water supplies from global terrorism, natural disasters and technical mishaps.
One of the world’s foremost experts on water safety and security, IDF Lieutenant Colonel (retired) Patrick Bettane, says, "Israel is a microcosm of what can happen worldwide, but no country has more operational experience than Israel in guarding against threats to its water system from terrorism as well as from industrial pollution or system breakdowns." Israel has put an entire package of solutions in place, comprising risk analysis, homeland security hardware to physically protect water infrastructure, sensors to measure water quality and bio-sensors to detect toxins. And if prevention fails then crisis management procedures that are integrated into decision-making processes can keep casualties and economic damage to a minimum.
Looking to world markets
Having satisfied Israel's growing thirst for water, the country's industry has turned its attention to meeting global needs for water. In 2005, Israeli exports of water technologies reached $825 million. A study undertaken by Tel Avivbased Trigger-Foresight Consulting proposed that with a government investment of $160 million over five years, Israeli firms could increase their exports to $2 billion by 2010, $5 billion by 2015 and $10 billion by 2020 in a world water market currently worth $400 billion a year and growing seven percent annually.
As a result the government conceived the Agamim 10 plan, which encourages supportive government policies to make the water sector a strategic industry and calls for major support, incentives and investments for R&D and companies involved in developing infrastructure, technologies and services.
This article appeared in the Israel Venture Capital & Private Equity Journal (IVCJ). IVC Research Center publishes the Israel Venture Capital & Private Equity Journal, a quarterly review of trends and developments in the Israeli-related venture capital industry. IVCJ, distributed worldwide, is dedicated to provide wide-range coverage of Israel's venture capital industry. For more information please visit www.ivc-online.com
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