Show I BAB S ONS WATER POLLUTION CONTROL By Babson's Reports Incorporated Wellesley Hills Mass The market for water pollution control has been estimated estimated es es- at 26 billion to 29 billion over a year five-year period However present present pre pre- sent appropriations for the war on pollution pollution pollution pol pol- lution are but a trickle because of the enormous spending on Vietnam and there is no assurance that the cessation of hostilities would mean that water pollution pol pol- lution control would be the first order of business for the government Also technology technology tech tech- in this area is by no means perfected perfected perfected per per- and further developments seem to be awaited despite the pollution crisis The Culprits The three major sources of water pollution pollution pol pol- lution are agriculture industry and mun mun- Anywhere from 30 per cent to 90 per cent of the water for irrigation irrigation gation is consumed The remainder is polluted by irrigation return and by fertilizers fertilizers fer fer- herbicides pesticides and soil erosion Over 40 per cent of the country's total water use Is accounted for by farm ing log Industry accounts for 50 per cent of the total water usage but by 1980 this may rise to 65 per cent Of the water used by Industry 47 per cent to 48 per cent is returned to the water supply and used again Two thirds or more is used for cooling Industry it is estimated discharges twice as much organic organic organic or or- ganic waste into water courses as mun mun- Municipalities are discharging raw untreated sewage into water courses at atan atan atan an incredible rate per year Usage of water by the nations nation's communities accounts accounts ac ac- counts for a mere seven per cent to eight per cent of total water use but contributes heavily to the overall water pollution problem Cleaning up the Mess Mes o In order to control or reverse water pollution three processes can be utilized utilized util util- 1 Settling screening and strainIng straining strain strain- Ing pollutants 2 coagulation precipItation precipitation and other chemical processes to remove 90 per cent of the organic compounds compounds com com- pounds 3 distillation reverse osmosis and coagulation to ferret out the inorganic materials Boiling these technicalities down to size companies involved in water treatment through specialty chemicals water servicing and processes of desalination desalting should be the most immediate beneficIaries beneficiaries beneficiaries benefic benefic- of the water pollution programs when spending is accelerated particularly particular particular- ly those in the industrial waste field At least companies are In the water pollution control business Of these only a small number are publicly owned Moreover an even smaller number are immersed in water pollution control to toof toof toof of the companies are well diversified In other activities and many of these are subject to the cyclical influences of their respective business sectors Prime Prim Participants The Research Staff of Babson's Reports Reports Re Re- ports has concluded that the industrial waste water treatment and household conditioning segments of this fragmented fragment fragment- ed field offer the largest market and growth potential Thus we would focus upon specialty chemical companies with large research and development emphasis emphasis em em- and a high degree of consultation consultation consult consult- and technical service Chemical use in water is expected to double tr fsr five years and double again in the following following fol fol- lowing five years providing a 15 per percent percent cent annual growth rate Attractive Investments tl The leaders in the field favored by bythe bythe bythe the Research Staff of Babson's Reports are Nalco Culligan and Betz Beu Labor Labor- In the fast-breaking fast technological ical field of desalting Chem Aqua the Aqua the largest factor in water purification purification-is la aj as Interesting Investment Although these companies concentrate mainly In the potential high-potential water treatment busIness business business bus bus- iness they are risk situations selling at relatively high price earnings ratios We therefore advise purchasing a package package pack pack- age of two or more companies In our judgment term near-term opportunities opportunities for investment purposes are limited limit ed We believe that investors should seek only term long-term capital gains two gains two or more years years years-in in select companies with in depth capabilities in the water treat ment sector of this fuis emerging field |