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Case
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Reference no. 9-222-S05
Spanish language
Published by: Harvard Business Publishing
Originally published in: 2021
Version: 22 February 2020

Abstract

This is a Spanish version. Private companies were being turned to for potable water in the world's megacities due to impacts of climate change including droughts and flooding. Mexico City had endured several water-related crises, with its population suffering from floods, droughts, water shutoffs and disease. Although some access to piped water services was practically universal for Mexico City residents, services were limited or discontinuous. An accommodation that most households had made was in purchasing and installing a water holding tank on the roof or in the ground, with Rotoplas, a Mexican based water product and services provider, enjoying more than 55% of tank market share in Mexico. Rotoplas had ventured into wastewater treatment and recycling in 2016 with the acquisition of Sytesa, a design, construction, financing, operation, and maintenance business for wastewater management for industry and businesses. Market segments included lighter corporate users like shopping malls and heavy users like food processors or mining companies, and maybe 'water as a service' would also end up as the place to be to supplement and assist homeowner associations and even municipal governments. However, services revenue was today a tiny fraction of overall cash flow at Rotoplas. The presence of larger competitors like Suez and Veolia and as well as unfavorable pricing and regulations could potentially slow down future growth. Could Rotoplas services be part of the solution to the water crisis in the nation's capital? Or was the situation too intractable for even this local champion company to tackle? What pricing and regulatory changes might lead to financial and technical solutions for Mexico City's water crisis?
Location:
Industry:
Size:
Large
Other setting(s):
2019

About

Abstract

This is a Spanish version. Private companies were being turned to for potable water in the world's megacities due to impacts of climate change including droughts and flooding. Mexico City had endured several water-related crises, with its population suffering from floods, droughts, water shutoffs and disease. Although some access to piped water services was practically universal for Mexico City residents, services were limited or discontinuous. An accommodation that most households had made was in purchasing and installing a water holding tank on the roof or in the ground, with Rotoplas, a Mexican based water product and services provider, enjoying more than 55% of tank market share in Mexico. Rotoplas had ventured into wastewater treatment and recycling in 2016 with the acquisition of Sytesa, a design, construction, financing, operation, and maintenance business for wastewater management for industry and businesses. Market segments included lighter corporate users like shopping malls and heavy users like food processors or mining companies, and maybe 'water as a service' would also end up as the place to be to supplement and assist homeowner associations and even municipal governments. However, services revenue was today a tiny fraction of overall cash flow at Rotoplas. The presence of larger competitors like Suez and Veolia and as well as unfavorable pricing and regulations could potentially slow down future growth. Could Rotoplas services be part of the solution to the water crisis in the nation's capital? Or was the situation too intractable for even this local champion company to tackle? What pricing and regulatory changes might lead to financial and technical solutions for Mexico City's water crisis?

Settings

Location:
Industry:
Size:
Large
Other setting(s):
2019

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