Friday, February 3, 2012

patentECO - Water - The New Oil

Water is the new oil.  This means two things 1)  inventions that conserve water or improve its distribution and treatment will be very important; and, 2)  the companies in the water industry will be hot commodities as the source of both new products and services and value growth and financial gains for their investors.

According to Citigroup, 70% of the globe's population will live in urban areas by 2050.  The demand for water will skyrocket by five times.

“As urban areas increase in size and become more affluent, changing diets and sanitation requirements can cause the demand for water to increase five-fold beyond the ‘basic water requirement’ needed for drinking, cooking, and personal hygiene,” wrote Michael Geraghty of Citi’s global equity strategy group.

Willem Buiter, the bank's global economist sees water as one of the most important physical commodity asset classes predicting, "fleets of water tankers..and storage facilities that will dwarf those we currently have for oil, natural gas, and liquified natural gas (LNG).

Citibank identified the following firms as companies to watch:

Danaher Corporation (DHR) which trades on the NYSE and has a market cap of $32.24 Billion as of December 2011.  Danaher is a diversified industrial firm.  Its environmental segment provides products to help protect the Company's water supply and air quality.

 G.U.D. Holdings (GUD), an Australian industrial firm owns Davy, a water products firm that manufactures, sources, and distributes a comprehensive range of products for the transfer, conservation, and treatment of water.  The latest addition to their patent IP is US patent 7,997,295, "Controller, system, and method for providing supplementing water."

Pentair (PNR), a water filtration firm with a market cap of $3.25 Billion and 99.8 million shares outstanding.

Nalco (NLC) a water services firm that was recently acquired by Ecolab (ECL) to create an $11 Billion global leader in cleaning, sanitizing and water management serving institutional, industrial and energy markets. (They use a lot of water.)  The merger was completed on November 30, 2011.  Nalco holds patents across a variety of technologies and has a number of applications pending including work done in collaboration with Rice University.

Valmont Industries (VMI) manufactures mechanized irrigation systems as part of its industrial goods business.  It's known for its industrial lighting, support structures, all of which play a part in the emerging clean tech marketplace.  The firm's most recent published patent application is for a mechanized irrigation system.

We'll be keeping track of innovations in the water space and at these firms as part of our patentECO clean tech analysis.