Ecolab’s Nalco to Buy Stakes in Water Companies in India

Ecolab Inc., the largest provider of chemicals and services for water and wastewater treatment, said its Nalco unit plans to grow through acquisitions in the south Asian nation.

Nalco Water India Ltd. may expand by purchasing firms in complimentary fields as it seeks to meet rising industrial and urban demand for treated water in India, Managing Director Mahesh Rao said in an interview.

“We’d like to look at potential opportunities,” Rao said by phone from the western Indian city of Pune. “The strategy earlier was not to look at acquisitions but now the time has come to look at M&As with complementary companies as demand grows.”

India, the second-most populous after China with 4 percent of the world’s water resources, plans to spend $20 billion on water treatment, irrigation and recycling in the five years ending March 2017. Indian companies, which often compete with the local population for water supplies, and growing urban communities are investing more in water treatment in a nation where only 20 percent of sewage water is treated.

Nalco, with revenue of $65 million in India last year, is looking to appoint advisers for potential deals, Rao said this week without giving more details. The company has been growing in India more than 20 percent annually and its water business may expand by as much as 27 percent a year over the next five years, Rao said. Nalco employs 2,500 people in India, he said.

Any Nalco acquisition will be funded by Ecolab, which closed a $2.3-billion acquisition of Champion Technologies Inc. this April, Rao said. St. Paul, Minnesota-based Ecolab paid $5.4 billion for Nalco Holding Co. in 2011.

Nalco conducts water audits, builds automated water supply systems and operates sensors for hospitals, hotels, food companies, automotive and energy companies’ water systems that are remotely controlled from its Pune-based center, Rao said.