April 9 (Bloomberg) -- Israel’s IDE Technologies Ltd. is in talks with Japan’s shipbuilders and government to design and build off-shore desalination plants, seeking to tap rising demand for alternate sources of short-term freshwater supply.
The maker of land-based desalination equipment wants to start delivering floating platforms to clients within three years, Udi Tirosh, a business development director at the Kadima-based company, said in an interview. IDE’s ship-based designs could supply water for a city of 850,000 people and Japan’s shipbuilders are among potential partners, he said.
The market for floating desalination plants may develop within a decade to as much as 400 billion yen ($3.9 billion) in annual sales as freshwater shortages and tighter environmental rules for land-based plants boost demand, according to a March 28 report by Deloitte Tohmatsu Consulting Co. IDE is in talks with companies from different countries, though the ones involving Japan are most progressed, Tirosh said.
“We’re in early stages on the commercial side,” Tirosh said in phone interview on April 7, declining to specify which Japanese companies are in talks with IDE. ’’We’re advanced in the technical side.’’
Japan’s major shipbuilders include IHI Corp., Mitsubishi Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd.
The Deloitte report was ordered by Japan’s Ministry of Land, Infrastructure, Transport and Tourism, which supports the talks between IDE and domestic shipbuilders.
“We intend to coordinate a business match between IDE and any Japanese company interested in the desalination ship project,” Naoto Nakagawa, a deputy director at the ministry’s maritime bureau, said by e-mail. “From the research we’ve seen the market for desalination ships is quite big.”
As China and South Korea push ahead of Japan in the mass shipbuilding markets, Asia’s second-largest economy is looking at new niches. Japanese shipmakers last year unveiled plans to build a new kind of floating structure labeled a “megafloat,” which may be used as an off-shore base for oil exploration.
Some examples of floating desalination plants exist today, such as in Saudi Arabia, though the technology up to now has been too expensive to implement widely, Tirosh said.
The global desalination market is forecast to more than double from last year’s $6 billion, or 6 million cubic meters per day, to $15 billion by 2018, as the world population grows and water gets more scares, Deloitte said in the report.
While floating desalination plants will not replace all conventional, land-based ones, they can become an alternative that does not sadle a country with the burden of maintenance once local water tables improve, Tirosh said.
The use of floating technology is spreading. Turkey’s Karadeniz Holding AS runs a fleet of seven ‘Powerships’ that carry thermal power plants, while Russia’s Rosatom Corp. is building a prototype ship housing a nuclear generator.
IDE plans to create a fleet of ships that could service clients all over the world, with current designs for vessels drafted to produce about 50,000 cubic meters a day to 120,000 cubic meters a day, Tirosh said.
“The idea is to develop with our partners a multi-year, multi-vessel plan that would eventually supply significant capacity in various places in the world,” Tirosh said.
IDE Technologies ranks just below the world’s top three suppliers Veolia Environment SA, General Electric Co. and Doosan Heavy Industries & Construction Co. in the global desalination market by capacity, Deloitte said. IDE is jointly owned by Israel Chemicals Ltd. and the Delek Group.
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