Initiatives in the Water and Environment Sectors
ITOCHU entered the water supply business in 2012 with the acquisition of a 20% stake in the Bristol Water Group, which provides water treatment services to the city of Bristol, in southwest England, and its surrounding area. Following on in this vein, in February 2014 ITOCHU reached an agreement to acquire 33.4% of the shares in CANARAGUA CONCESIONES S.A., which manages water supply and sewage services in the Spanish Canary Islands. We acquired this stake from CANARAGUA S.A., a subsidiary of AGBAR, Spain’s largest private water company. This agreement marks the first Japanese investment in the Spanish water sector. In the environment sector, ITOCHU is involved in four energy-from-waste projects in the United Kingdom, including one under an agreement signed with the Merseyside Recycling and Waste Authority in December 2013. These businesses involve the incineration of waste that was previously landfilled, using the waste heat to generate electricity. This approach reduces waste volume and contributes to CO2 reductions.
Around the world, we expect a growing number of water-related businesses to be privatized. Given this trend, combined with growing demand to reduce environmental impact and generate green electricity, we plan to leverage the experience and knowhow we are building up in the United Kingdom and Spain to meet such needs in various countries. At the same time, we will step up our involvement in initiatives likely to generate stable, long-term earnings.