Expert Speak
Suez Environnement & Degremont India
India business in high growth phase
We hosted a call with the management of Suez Environnement and its subsidiary Degremont to
gain perspective on their India expansion plans. Key takeaways:
Degremont India's business currently is worth around Euro 50m and is in high growth phase,
considering the market growth potential. Degremont is qualified to bid for large projects in
India and has successfully completed large projects such as 650 MLD WTP in Delhi and a 900
MLD project in Mumbai. Recent orders wins worth Euro 61m in India, justifies management
optimisim for Indian operations.
Degremont focuses on payment as per its contractual terms and major contracts are as per
international standards. Average debtor days across Indian operations are in the range of
45-60 days.
Market for waste management solutions is in evolving stage in India, but can grow
significantly for Suez, considering its domain expertise and capability to provide multiple
solutions.
19 May 2014
Sector: Capital Goods
Suez Environnement S.A. is a
France-based utility company
which operates largely in the
water treatment and waste
management sectors. It is the
second-largest water
company in Europe.
Suez has been present in
India for over three decades
through its subsidiary
Degremont India, whereby it
has constructed over 153
plants and is operating 18 of
them. In drinking water
production, the Bhandup plant
in Mumbai produces 1.9b
liters/day and is the largest
plant of its type in Asia. In
sanitation, Degremont treats
600m liters of waste water
per day, serving 5m people in
India. It built and operates the
Rithala waste water
treatment plant for New
Delhi (182m liters/day), the
first plant to be 80% self-
sufficient in energy.
Water services & waste management to be the key growth levers
Currently, revenue from Indian operations is around Euro 50m and is in high
growth phase, considering the growth opportunity in India.
Degremont's focus continues on expanding operations across municipal segment,
with strong focus on projects being awarded on DBO basis. Initial focus is on
bagging projects across five major metro cities, which would be followed by Tier
II cities in India.
Company focuses on gettin payments as per contractual terms from their municipal
customers and major payments are milestone linked and contracts are designed
as per international standards. Average debtor days for Indian operations are in
the range of 45-60 days.
Considering its expertise in designing and execution of desalination plants, entry
in Indian municipal desalination market is one of its key priorities. On the
industrial side, focus continues to be on selective expansion across industries
like refining, power and steel. To expand its presence across the medium & large
sized opportunities arising from waste water markets, Degremont is also open
to building local alliances and partnerships.
Due to its expertise in waste management, Suez also intends to expand waste
management operations in India by a) providing integrated waste management
projects (IWMP), b) waste segregation and resource recovery, c) refuse derived
fuel-based waste management solutions and d) energy from waste options using
both thermal and digestion techniques. However, market for waste management
business is still at an evolving stage in India and can grow significantly.
Satyam Agarwal
(AgarwalS@MotilalOswal.com); +91 22 3982 5410
Nirav Vasa
(Nirav.Vasa@MotilalOswal.com); +91 22 3982 5422
Investors are advised to refer through disclosures made at the end of the Research Report.
1

Expert Speak
Wins orders worth Euro 61m
Indian operations are in ramp-up mode and contribute around Euro 50m of revenue.
Water services and waste management are the growth drivers due to its domain
expertise in both segments. Indian business has 886 employees (316 on payroll and
570 outsourced staff).
Recently, Suez and Degremont won orders worth Euro 61m for water management
soutions in Pune, Bangalore and Mumbai.
The order won in Pune (WTP) is funded by JNNURM and is expected to be
completed in the next 30 months and also has an O&M contract for a period of five
years. Bangalore order is for construction of a waste water treatment plant is
expected to be commissioned in the next two years. Combined value of orders
bagged from Pune and Bangalore is Euro 31m.
Scope of work in its Mumbai-based order, worth Euro 30m, comprises of
improvement in the drinking water distribution system in Mumbai and includes a
five-year O&M contract.
Business overview and presence in India
DEGREMONT
Construction and Operation of Water
and waste treatment facilities
SUEZ ENVIRONNEMENT
Water services – maintenance of water
networks, Revenue Management and
Customer Services
SUEZ ENVIRONNEMENT
Waste management
Construction and Operation of Waste
treatment facilities
MACE/ SAFEGE (30%)
Engineering solutions
Geography-wise revenue break-up
Segment-wise revenue break-up
Source: Company, MOSL
19 May 2014
2

Expert Speak
Suez Environnement's presence in India
19 May 2014
3

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