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Water-Stocks.com Follows the Money in the Water Industry as Global Shortages, Aging Equipment, Global Warming and Pollution Drive Investments in Infrastructure and Water Purification
China's Spending of $125 Billion Towards Improving Water Quality Over Next Five Years Opens Market to Foreign Investment
| Source: Water-Stocks.com; Hendrx Corp; WaterBank of America (USA) Inc.
POINT ROBERTS, WA -- (MARKET WIRE) -- December 4, 2006 -- www.Water-Stocks.com (WS), an investor
and industry news portal for the water sector, continues its
InvestorIdeas.com™ 'Follow the Money' series with perspectives on
investments within the water industry. Global water shortages, aging
equipment and continued contamination from pollution drives investments
into infrastructure and water purification. Water sector participants such
as WaterBank of America (USA) Inc. (OTCBB : WBKA ), a manufacturer of
hygienic ice cubes and bottled water and Hendrx Corp (OTCBB : HDRX ), an
established manufacturer of atmospheric water generators, are looking to
benefit from the market drivers leading to long term growth for the water
business.
Globally the water industry has been estimated as a $400 billion market
with signs of long term growth ahead, especially with countries such as
China continuing to drive the market as they focus on alleviating many of
the region's water issues such as shortages and contamination from
pollution associated with accelerated economic growth. China plans to spend
$125 billion on water treatment and recycling over the next five years
opening its door to foreign investment and participation in their water
market.
Hendrx Corp, (OTCBB : HDRX ), a water technology company focused on water
generation, filtration, ionization, and purification devices, has targeted
their efforts to address many of the needs of developing countries such as
China. George Solymar, Chief Executive Officer of Hendrx describes, "The
main reason China's needs have escalated is a result of concentration in
population, industry and agriculture. This concentration is to the point
where the natural water supply has been overstressed and can no longer
accommodate the growth without drastically impacting the environment. As a
result, global solutions have to be found to minimize the impact on the
environment."
WaterBank of America's (OTCBB : WBKA ) Chief Operating Officer, Stu Levitan
adds, "With all the warnings issued to travelers and citizens with respect
to water and ice consumption in China and elsewhere, our secured, ready to
freeze ice cubes, ICEROCKS, is a natural complement to all the measures
being taken to upgrade China's water resources. We predict ice consumption
from a safe, secure package will be the norm rather than the exception in
the near future."
According to Neil Berlant, Water Group Managing Director and First Vice
President at The Seidler Companies, "The capital that is going into the
water business is going primarily into two areas: infrastructure and water
quality. Infrastructure in general, which is the ever growing demand for
pumps, filters, membranes, pipes, etc is driven by the natural
deterioration of the infrastructure, which is very old and that process is
accelerating. This is coupled with a growing need for higher quality water
and more treatment."
In terms of stock market performance, many of the large water stocks, in
particular within the water utilities group, have experienced significant
price appreciation since the beginning of the year. Companies such as: SJW
Corp has seen its stock price rise over 50%; American States Water Co. has
realized an increase of $5.50 per share or 17%; Consolidated Water Co. Ltd.
has seen a 18% stock price increase, and United Utilities is up almost 27%
since January.
Demand is driven by both the enormity and the increasing need to
accommodate the natural deterioration of the existing water systems. "In
the aggregate the estimates to replace the aging infrastructure within the
United States represents as much as $1 trillion over the next twenty years.
That is the backdrop for the enormous amount of growth that's going to be
moving forward over the next decade," describes Berlant.
Bill Brennan, President & Managing Partner, AquaTerra Investment Management
describes consolidation as a key strategy to help address the high costs
that accompany repairing and replacing aging infrastructure and equipment.
"As the costs associated with treating and distributing water continue to
escalate, systems of all sizes are under pressure to maximize efficiency in
order to remain financially viable. Larger systems not only possess the
greater financial resources required to make these upfront investments, but
are also able to spread fixed costs over a greater revenue base. Evidencing
the clear benefits of scale, roughly 35% of very small systems operate at a
loss while about 90% of very large systems are profitable."
Recent acquisition activity supports the advantages that consolidation
offers. Patrick O'Keefe, CEO of Watts Water Technologies recently stated
that $55,573,000 or 24% of the Company's sales increase in the third
quarter was achieved primarily through their acquisitions of Core
Industries Inc., Dormont Manufacturing Company and ATS Expansion Group.
Watts Water Technologies' stock price has appreciated approximately 35%
since the beginning of the year up over $10.00 with its recent close of
$41.90.
U.K. water utility AWG Plc recently announced that it will be acquired by a
group of pension funds from Australia and Canada in addition to 3i Group
Plc, a world leader in private equity and venture capital, in a deal worth
approximately $4.12 billion. Thames Water, owned by German utility RWE AG,
is being sold to Kemble Water Limited, a consortium led by Macquarie's
European Infrastructure Funds for close to $14.84 billion.
In addition to the deteriorating infrastructure, there is also a growing
demand for a higher quality of water. There is an escalating necessity for
a level of water quality that can accommodate the increasingly precise
water treatment needs encompassing new systems, as well as the rising
purity requirements within electronics manufacturing, food processing, as
well as power generation, which is the single largest consumer of high
purity water in the country.
According to BCC Research, the US market for municipal drinking water
treatment technologies such as membrane filtration, ozone disinfection, and
UV radiation, will experience 10.7% growth by 2011 increasing from its
current market size of $1.3 billion to $2.1 billion.
To Read More: http://water-stocks.com/Articles/120406a.asp
Featured Water Portal Sponsors: (WS is compensated by HDRX and WBKA as
disclosed in disclaimer.)
WaterBank of America (USA) Inc. (OTCBB : WBKA ), a manufacturer of hygienic
ice cubes and bottled water with a strategy to create and acquire a "bank"
of top quality springs to address global water scarcity problems. For More
Info: http://www.water-stocks.com/CO/WBKA/Default.asp
Hendrx Corp (OTCBB : HDRX ), a manufacturer of atmospheric water generators,
filtration, ionization, and purification devices. For More Info:
http://www.water-stocks.com/CO/HDRX/Default.asp
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