Alarmist predictions of a world without water, environmental fads or a simple opportunity to break into a sector with tremendous potential were not among the factors that led to the Odebrecht Organization’s creation in 2007 of a company that invests in environmental assets and services.

Foz do Brasil arose from the belief that huge investment gaps and the need for efficient water supply systems presented an opportunity to contribute to the conservation of water and the environment, serving clients through modern, adequate infrastructure facilities and providing the public with high-quality services, thereby generating returns for shareholders.

This vision, along with the possibility of growing Foz do Brasil by making the most of Odebrecht’s geopolitical base and operational synergies with Cetrel, Braskem, Quattor and the Organization’s Engineering & Construction companies, set the direction for Foz do Brasil’s Action Plan and growth during its first three years of operations.

In 2009, expansion plans for Foz do Brasil were made feasible by a partnership with the FI-FGTS (Infrastructure Investment Fund), which holds a 26.53% stake in the company. Through this type of investment, the aim is to improve the yield of Brazilian workers’ resources invested in the Guarantee Fund for Length of Service. This partnership between Odebrecht and the FI-FGTS therefore converges with a long-term vision of investment.

Worldwide, there are several areas suffering from water-supply imbalance – high population density and few available water sources – while others have a large supply of water and low population density. The challenge is to treat, transport and optimize water within a context of balance. “We don’t envisage catastrophic prospects of chaos and water shortages in the world. Instead, we see water as a resource that really needs to be stewarded better. And with every passing day, Foz do Brasil is increasingly prepared to meet that challenge,” notes Foz’s Entrepreneurial Leader (CEO), Fernando Santos-Reis.

The number of private-sector companies active in this industry is still comparatively small in Brazil, given the challenges the nation faces. According to the Federal Government, it would take over BRL 200 billion to provide every Brazilian household with water supply and sewage collection and treatment services. However, the greatest contribution Foz do Brasil can make, as one of the leaders in this industry, is investing in and operating efficient systems, influencing the industry and the country by example.

In 2011, the company will produce 195 million liters of clean drinking water per day, treat and reuse 963 million liters per day of industrial water, and collect and treat 345 million liters per day of household and industrial sewage. Through sewage collection and treatment alone, Foz do Brasil ensures that 110 metric tons of organic matter daily are no longer discharged into rivers, lakes and beaches.

Knowledge and synergy
The Southern Hemisphere regions that are most lacking in water investments and still developing their infrastructure are places where Odebrecht is already present: Latin America and Africa.

Today, Foz is active at all stages of the water cycle. The company has assets and businesses that deal with water collection, storage and distribution; billing; wastewater treatment; utilizing reused water obtained from treated sewage for industrial purposes, and the subsequent final and proper disposal of wastewater in river basins, waterways and oceans.

In the industrial sector, the prevailing principle is also water conservation. Foz has the experience required to operate at all stages, such as utilizing reused water for cooling machinery and other purposes. “Through different contractual arrangements and business features, as well as varied technologies, we want to be at the forefront of everything that water resource management represents,” says Santos-Reis.

Investments
Since its inception, Foz has invested over BRL 4 billion in its backlog. Based on its plans for the three-year period between 2011 and 2013, the company will invest another BRL 8 billion. According to Ticiana Marianetti, the company’s officer Responsible for Finance, the planned investment for 2011 totals BRL 800 million. “These are long-term investments, and the average payback (return on investment) period is 15 years,” she explains.

Foz do Brasil has a backlog of projects with an average duration of 24 years. In 2010, the company’s net revenue reached BRL 804 million, more than double compared with the previous year. According to Ticiana, Foz expects a turnover of BRL 1.3 billion in 2011. About 60% of that total is based on operations in the Water segment, 30% on Industrial Plants (outsourcing utility plants for industries) and 10% in Environmental Services.

According to Fernando Reis, the main challenge the company faces is not raising funds, since those resources are widely available in the financial market. “The challenge lies in our ability to groom and integrate new entrepreneur-partners into the company who can service the communities on the basis of the principles of TEO (the Odebrecht Entrepreneurial Technology),” he says. In 2008, when the company began its activities, it had eight entrepreneur-partners. By 2010, it had 30. “Over the course of last year, we had to bring in, groom and integrate 10 entrepreneurs with a base of 20. This year, we have set ourselves the challenge of integrating and grooming 10 more,” he adds.

Sustainability
While society and the corporate world exhaustively discuss the issue of sustainability, Foz do Brasil, as a company whose business is water resource management, views that subject from a more favorable position than companies whose activities negatively impact the environment. This differentiator allows Foz to have a bolder concept in its Sustainability Policy, which is based on three pillars: universal access, efficiency and added value.

“When we are serving 100% of a population by providing clean drinking water and treated sewage, we will be fulfilling our commitment to providing universal services that are directly related to public health and quality of life,” says Renato Medeiros, Responsible for Engineering.

Efficiency, he explains, is a sore point in the operations of water supply and sewer systems in Brazil today. Average consumption for a household of three to four people in Brazil is currently 500 liters per day. In this country, for that amount of water to reach the point of delivery, 1,000 liters must be removed from the rivers – in other words, there is a 50% loss of water from the moment it is collected to the time of final consumption.

“When we attain our standard of efficiency, those same 500 liters will reach Brazilian homes after collecting just 600 liters. That will save 400 liters per household every day, so that resource is no longer removed from nature and more of it is available to serve more people,” stresses Medeiros.

Renato Medeiros explains that the third pillar of sustainability, added value, has a broader meaning. It refers to the value added to society through water conservation (for public consumption and productive activities) and added value for the company’s shareholders, so it can continually reinvest its results in more projects.

Medeiros also points out the importance of combining the benefits of sustainability with the client’s satisfaction and excellent service, whether the client is the concession grantor or the public. “The quality of care our utilities provide through toll-free numbers and local customer service rounds out our operational efficiency indicators.”

According to Fernando Reis, Foz do Brasil is operating in the context of optimizing and increasing the duration of a finite resource. “What is now a relevant public debate has always been part of life for our programs and businesses.”

Technological innovations
The growing expertise of Foz’s teams qualifies the company to work with technological innovations such as water production for industrial purposes through the reuse of domestic sewage and desalinated seawater. According to Renato Medeiros, desalination is still expensive and not widely used because it requires major investments and involves complex operations, but in the future it could present a solution to supplying drinking water in areas that lack fresh water sources.

According to Fernando Reis, in a country like Brazil, with more than 5,500 counties, the private sector can do a great deal to supplement the work of the public sector. And the needs of the segment in which Foz is active effectively require the natural process of surmounting challenges that has always gone on within the Odebrecht Organization.

Numbers for Foz do Brasil

“That is why we are continually striving to find new technologies and pursuing creative, innovative solutions that get better results for the communities we serve today and those we will serve in the future,” he adds.