BUSINESS

Cleaning up on dirt

Canadian firms cash in on the environmental market

ANN WALMSLEY June 18 1990
BUSINESS

Cleaning up on dirt

Canadian firms cash in on the environmental market

ANN WALMSLEY June 18 1990

Cleaning up on dirt

Canadian firms cash in on the environmental market

For many Western companies pursuing opportunities in Eastern Europe, the degree of industrial pollution is one of the greatest deterrents. Many sites and water supplies are too contaminated even for indus-

trial use. But, for other companies selling environmental technology and expertise, Eastern Europe is a promising new frontier. And now that the World Bank has begun to offer low-interest loans to help these currency-

strapped nations reclaim their contaminated air, land and water, several are negotiating with Canadian firms who are among the world leaders in this new field. Last month, Andrew Benedek, the chief executive of Burlington, Ont.-based Zenon Environmental Inc., returned from Hungary, where he met officials in three cities, including the industrial city of Tata, 60 km northwest of Budapest. They discussed several possible deals, including a joint venture to distribute and service Zenon’s industrial waste-water purification systems in Eastern Europe. Said John Cobum, Zenon’s president, after the five days of talks: “If the money is found, the opportunity is incredible.”

As pollution fighting becomes a leading priority for governments around the world, Canadian companies are gaining an early lead in many key segments of the booming and competitive environmental market, including the design of curbside blue-box recycling programs, acid-rain-control equipment and engineering services.

Overall, pollution control is now a $10billion-a-year industry in Canada, and, although Statistics Canada does not yet measure environmental exports, many industry executives say that foreign sales are the fastest-growing part of their business. A 1989 Price Waterhouse report found that exports accounted for more than 50 per cent of British Columbia’s environmental revenues, while a 1988 Woods Gordon study concluded that 13.5 per cent of Ontario’s environmental sales came from exports.

Indeed, the provincial Ontario International Corp. claims that environmental products and services will be the single most important export sector for the province during the next five years, especially to countries where industry has operated unchecked for decades. The United States is the largest market for the new technology, and it is expected to buy even more following the passage of the stringent new Clean Air Act by the U.S. House of Representatives last month. As well, Canadian executives are now targeting Eastern European and other countries where industrial pollution has become a serious hazard. Said Cobum, who expects that 25 per cent of his company’s $25 million in revenues this year will come from exports: “It is tragic when you see unrestrained pollution as an opportunity. But we can make money and also go to bed knowing we helped clean it up.”

Companies that were traditionally among Canada’s worst polluters are now some of the key exporters of environmental know-how. Forced to spend millions to conform with new environmental standards at home, they are recovering some of those costs by selling new pollution-control equipment abroad. Giant nickel-and-copper producer Inco Ltd. is spending $500 million over five years to curb acidrain-causing sulphur dioxide emissions at its huge Sudbury, Ont., smelting facilities. On the other side of the ledger, it has earned $10 million by designing cleaner smelters for two southwestern U.S. copper producers, and is pursuing other foreign sales. The centrepiece

of Inco’s new technology is a flash furnace that converts sulphur dioxide into marketable sulphuric acid—used in producing fertilizer—through spontaneous combustion.

Two other Canadian companies are making inroads in the acid-rain-control market— Union Carbide Canada Ltd., a Toronto chemical producer, and TransAlta Utilities Corp., an electric utility in Calgary. TransAlta and several private and public partners are spending $40 million to complete testing on a low-cost coal burner for industrial and thermal electric power plants. Both companies view the United States as a lucrative market as hundreds of its coal-fired power plants rush to comply with strict new sulphur dioxide emission limits. TransAlta offers a coal burner that uses calcium to capture the sulphur and convert its harmful nitrous oxide into more benign nitrogen gas. Union Carbide’s system is a smokestack scrubber that uses a chemical absorbent to clean exiting gases. The system costs about 20 per cent less than other scrubbers.

Another Canadian company, Solarchem Environmental Systems of Richmond Hill, Ont., has won U.S. customers by developing a method to purify groundwater polluted by leaks from gasoline storage tanks. Solarchem’s enhanced oxidation system converts benzene and other gasoline components in the water into tiny amounts of carbon dioxide. Earlier this month, it leased two of its portable treatment systems—which cost $2 million each to build—for $12,000 a month each to engineers cleaning up a gasoline-drum storage site in San Jose, Calif.

In an effort to solve their garbage crises, other overseas customers are importing Canadian recycling technology. Last January, an association of 24 major international beverage companies, including Swiss-based Nestle SA and the Atlanta-based Coca-Cola Co., hired Resource Integration Systems of Toronto, which designed Ontario’s blue-box curbside recycling program, to help them conform to new container-disposal regulations in Europe.

As part of a $ 10-million two-year test project, the residents of Dunkerque, France, and Sheffield, England, are already pitching their bottles and cans into recycling boxes similar to those in Ontario. Some cans will eventually find their way to Europe’s first aluminum-beverage-can recycling plant, a $40-million facility that Alcan Aluminium Ltd. of Montreal is now building near Manchester, England.

Canadian environmental exporters predict that in the future, as more stringent regulations, such as the Clean Air Act, are enacted abroad, they will add to the demand for their products and services and will put pressure on Canadian companies like TransAlta Utilities and Union Carbide Canada to accelerate the development of their technology. Indeed, it no longer seems ironic for some industries to wait eagerly for legislated pollution controls. Now, one country’s waste is another’s work.

ANN WALMSLEY