Time flies.
It might sound like an age old cliché...
But it does - fly, that is!
Only this time last week I was body surfing the rolling waves on the West Coast of Portugal...
Well, trying not to drown more like.
But it was great fun until a massive 10ft wave smacked me over sending half the Atlantic down my throat...
That was enough for me... I needed some water to swill.
Trouble was the local supermarket was completely sold out. I had to settle for a slurp from the tap...
Luckily the villa we stayed in had a filter attached under the sink so I could enjoy the holiday blues without a stomach bug...
But it got me thinking...
More than 1.2 billion people lack a secure water supply.
The U.N. reports that, “2.7 billion people will suffer from severe water shortages” by 2025.
That's astounding by today's standards. The Pacific Institute estimates that as many as 5 million people die every year from water-related diseases.
In China, 300 million people drink contaminated water. In India, it is said that unsafe water causes 21% of communicable diseases.
Whether it's drought, pollution, or geography, there are plenty of solutions - currently available - that could eliminate the problem...
So what IS the problem then, you say...
It's just very, very expensive.
Experts in the field have determined that, “investments in the hundreds of billions are needed to bring safe water to everyone who needs it.”
But here's an interesting statistic: Globally, 41 billion gallons of bottled water are consumed a year - for which the water consumer industry spent an estimated $100 billion.
Compare that to the $15 billion spent on water supply and sanitation, and it's easy to see the imbalance.
The earth is covered in water...
...but only 0.5% of it is drinkable. To meet future supply technology will HAVE to up its game... and that could mean profits for you...
Less than half of 1% of all the water on earth is fresh water.
Pollution problems and “climate change” have turned precious fresh water into the oil of the 21st Century.
One solution to this growing problem is desalination (disinfection). Another is purification.
"Just the former alone is a US$18 billion market growing at 10-15% per annum," said Steve Edwards in yesterday's Daily Wealth email.
"Chlorination has been the dominant technology in this sector, accounting for more than 80% of the market, but there are rapid technological advances underway in this area including ozone treatment, membrane filtration, and ultraviolet (UV) treatment...
"All these could account for half or more of the new sales of disinfection systems in the next decade."
In fact, a consortium of nine companies has come together to improve upon desalination technology.
In its brochure, the consortium states:
“Back in 1961, U.S. President John F. Kennedy noted that if humanity could find an inexpensive way to get fresh water from the oceans, that achievement 'would dwarf any other scientific accomplishments'.”
The consortium also estimates that desalination plants' annual sales will grow from $1.5 billion to $5 billion by 2025.
And this is just one area that has the potential to really give you great returns IF you know what companies are likely to profit (more on this in a sec) as the world starts to run dry of its most important liquid.
Water is a more important resource than oil
If you think I'm being alarmist, then consider this...
We barely hit February when mutterings about hosepipe bans began.
According to the Met Office the south of the UK is in the middle of its driest period for decades, and our reservoirs are running dry.
And it's not only the UK where water is fast becoming a luxury...
Last summer droughts over Europe hits the headlines; in the US several states are locked in disputes about access to the supply of fresh water in the Great Lakes; drought is devastating rural communities in Kenya; and in China millions are living with water supplies near what the UN calls "danger levels".
In a recent editorial column, Merryn Somerset Webb, editor of Money Week magazine, said:
"As the world develops and urbanises, we need more and more water (the water usage of a Chinese family doubles if it moves to a city) and there isn't enough to meet the end.
"This problem is not getting enough attention on any level. Ask any fund manager what the most important liquid in the world is and, while he may stop to take a swig of his Badoit before he answers, when he does answer he isn't going to think of water for a second... No, he's going to tell you that oil is the most important liquid in the world.
"But he's wrong. Oil is vital to the way we live now, but not only is it replaceable (wind, water, solar, nuclear), but we can also survive without it. Water isn't replaceable and we can't survive without it (you wouldn't last a week)."
The silver lining...
So what can we do about it?
"One answer," said Merryn, "is that we should try and use less (note that running a garden sprinkler for an hour uses up 540 litres of water and if you leave the tap running while you brush your teeth you will waste around five litres in the process)."
It's estimated that in the UK, nearly a third of our water is lost via leaking pipes with this rising to 60% in London where many pipes haven't been upgraded since Queen Victoria's day.
Things aren't so bad in the rest of the world.
But as the world's water supply continues to stretch, all this infrastructure will have to be upgraded - and soon.
And here I come back to the silver lining of this sorry tale...
With the ongoing need for desalination, for filtration, purification and for new pipelines, transportation and pumps all over the world, there are huge investment opportunities.
Until next week,
James Woodburn
Profit Watch
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