Water, Nature, and Humankind

New Challenges and Opportunities in the Era of Blue Gold

A new era of water is unfolding. For the first time in history, the global annual average temperature increased by 1.5°C above the pre-industrial era in 2024. 1.5°C above the pre-industrial era is not an annual average but a 20-year average, but the academe fears that climate change will reach the tipping point soon if the temperature continues to rise at this speed. In other words, extreme weather conditions including heat waves, floods, and typhoons will further exacerbate, leading to greater disaster occurring daily. In this context, it is necessary to examine thoroughly the availability of water resources under the current plans, the ability to prevent and cope with floods, and the stability of water infrastructure.
Water demand is constantly growing amid the increasing global population and accelerating urbanization. Fresh water demand is also being triggered by the 4th Industrial Revolution characterized by AI, big data, and automation. According to the World Bank and UNESCO, the global water demand has increased by around 1% each year over the past 40 years. Given this trend, the water demand in 2050 is forecast to grow 1.5 times from 2000, and the water demand in the manufacturing sector is expected to be triple that of the 2020 level. However, large-scale water resources development is becoming increasingly difficult socially and environmentally. The existing water management infrastructure is outdated, and actual water supply is also declining due to the growing amounts of sand deposits in reservoirs. As the scale and frequency of water disasters continue to increase, hydrological volatility and uncertainty are anticipated to rise with water supply forecast to become unstable.
In the era of water crisis, the capacity of water security required to secure stable water supply and prevent water disasters has emerged as a new mega trend in the global economy. The ability to manage water resources has become the key to enhancing national and corporate competitiveness.

Conditions for Becoming a Global Water Company

Sales are a basic barometer of the standing of a global company in the market because they are a good indicator of its market status and future potential. According to the list of 73 water companies compiled by global water industry survey institute GWI based on 2022 sales of over USD 1.0 billion, the world’s No. 1 water company was Veolia of France with sales of KRW 27 trillion, followed by Core & Main of the US, Ferguson of UK, and Xylem of the US. Leading global water companies tend to have a relatively high portion of overseas sales. For example, 82% of Veolia’s sales come from overseas markets, with around 50% for Xylem. Global water companies are working diligently on improving their technology to strengthen water security and raise the efficiency of water management in response to the climate crisis. Nowadays, they are mobilizing and concentrating all their resources on integrating the 4th Industrial Revolution technologies including AI as well as on augmenting water infrastructure, introducing hi-tech water treatment technology, and developing alternative water resources including desalination and wastewater recycling. This is because digital water management translates directly into corporate competitiveness by preventing climate disasters, saving cost and raising overall operational efficiency, improving customer service, and managing water infrastructure and assets more effectively.
K-water’s annual sales in 2023 stood at KRW 4.6 trillion, with overseas sales amounting to approximately KRW 13.6 billion. In order to become a truly global water company, K-water needs to take prompt steps to expand overseas sales by stabilizing the existing overseas investment projects and securing new overseas orders based on its digital water management technology.

K-water gains increasing global recognition for its superior technology

Ability to innovate: Super-gap, global leading technology in digital management

Driven by innovative ability that combines over 50 years' accumulated water management experiences and digital technology, K-water is raising its profile in the global market. The digital twin water management platform, AI water purification plant, and Smart Water Network Management (SWNM) are major super-gap technologies that are recognized globally. K-water and Team Naver are building a water management digital platform in the Saudi Arabian city of Jeddah, and the AI water purification plant in Hwaseong, Korea became the world’s first water management facility that has been awarded the Global Lighthouse Network certification by the World Economic Forum (WEF). Having been recognized for the improved water revenue ratio in Korea, K-water is currently involved in an SWNM project in Denpasar and Semarang, Indonesia.
Nowadays, K-water is also expanding its clean energy and hi-tech water treatment businesses. The hydrothermal energy project to supply energy to Lotte World Tower in Seoul is the largest of its kind in scale. Currently, K-water is creating a hydrothermal energy cluster in Gangwon-do Province—an eco-friendly, hydrothermal energy-based data center integrated complex. The 254MW Sihwa Tidal Power Plant operated by K-water is the world’s largest tidal power plant, and Seongnam Water Purification Plant is the nation’s first green hydrogen production facility using small hydro power, which is expected to contribute to the creation of a hydro ecosystem and the growth of the country’s hydro industry. Furthermore, K-water is working on the second phase of the floating solar panel project in the Hapcheon multi-purpose dam under the first-ever power purchase agreement (PPA) in Korea, and based on a model designed to help domestic corporations reach RE 100 and share generation profit with members of the local community.
K-water is also laying the foundation for stable industrial water supply to support the growth of Korea’s strategic industries. Following the successful development of the technology to produce ultra-pure water, a key material in hi-tech industries, K-water will start supplying ultra-pure water necessary for SK Hynix’s semiconductor production in the first half of the year. Once completed, the largest desalination facility in Korea that is being built in Daesan Industrial Complex will supply 100,000 tons of industrial water in the western region of Chungcheongnam-do Province—which has vulnerability to droughts and experiences chronic water shortages.

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  1. 1. African heads of state are visiting the Hwaseong AI water
     purification plant.
  2. 2. Three super-gap technologies featured in the special
     session at the 10th World Water Forum

• A unique business portfolio combining water,
  urban development, and energy

  K-water has a unique, rare business portfolio that combines water, urban development, and clean energy. Water, energy, and urban development are directly linked to the UN’s SDGs and are most vulnerable to the climate crisis. Each of these three areas is an attractive business in itself, but they will create synergistic effects when combined as worsening environmental and social problems including climate crisis and urbanization require integrated solutions. For example, a company that manages water and energy can produce water energy including hydro power, tidal power, and green hydrogen, and save energy in the process of water treatment and industrial water supply. A company involved in water management and urban development can create a water cycle-based city that is safe from water disasters and optimize water management. A company possessing specialized abilities in both energy and urban development can supply renewable energy including hydrothermal energy for cities and build energy-saving, low-carbon eco-friendly cities.

  Over 30 years' experience and a global network

  K-water became the first public corporation in Korea to expand its business beyond Korea when it launched a water resources survey project in Fenhe River, Shanxi Province, China in 1993. Since then, K-water has been actively involved in ODA and technology outsourcing projects; in 2009, it won the first private-public cooperation project of constructing a hydro power plant in Patrind, Pakistan whose commercial power generation commenced in 2017. As of the second half of 2024, K-water either has completed or is currently conducting 161 projects worth KRW 3 trillion in 45 countries, adding to its extensive pool of experiences and knowledge.
  A solid global network is also one of its strengths. Currently, 171 organizations in 26 countries are members of the Asia Water Council (AWC) founded in 2016 under K-water’s leadership. With the central governments of Korea, Indonesia, Philippines, and Thailand as members, AWC has outstanding execution ability that sets itself apart from other international organizations. A case in point is the Karian waterworks project of constructing a metropolitan water supply system in Jakarta, the capital of Indonesia. AWC played a powerful role in making this project possible. K-water operates like a private company when it comes to businesses but also acts on behalf of the Korean government in cross-border cooperation for water management agenda through AAWC and Korea-Mekong Cooperation Center, enhancing its profile in the global market.

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Strategies for Global Scale-up

K-water has established new growth strategies under which it will depart from the existing approach and shift to a new path in order to reach the ambitious and innovative goal of becoming one of “global Top 2 water companies.”

First, 3 super-gap technologies and global leading technologies as a key driving force for overseas expansion

K-water is planning to make inroads into more overseas markets by integrating digital technology into infrastructure development including dams, hydro power plants, and waterworks and maximizing high value-added, hi-tech water treatment businesses including ultra-pure water and desalination. It will offer digital solutions for outdated infrastructure and export carbon-neutral city and smart city technologies, building upon its urban development capacity. With the energy demand and greenhouse gas reduction needs of countries around the world forecast to increase, K-water will participate actively in overseas renewable energy projects including floating solar panels and tidal power plants, and international greenhouse gas reduction projects.

Second, the ability to develop innovative businesses consistent with new business strategies

K-water will expand business sources through joint marketing campaigns with global marketing companies, partnerships with local companies, and product digitalization and lower market barriers in advanced countries by taking over stakes in overseas water companies. It is necessary to launch B2B business like supplying ultra-pure water for SK Hynix overseas, develop ODA projects in collaboration with international organizations including Global Green Growth Institute, and use international greenhouse gas reduction projects strategically to create opportunities for follow-up projects as part of efforts to increase overseas sales.

Third, a new milestone in global cooperation to develop new projects

K-water will continue its efforts to turn AWC into an international organization, which will then help secure a greater pool of human resources necessary to solve water issues. Likewise, it will further expand the global competence enhancement program it has been running since 1997 to provide ample training opportunities for water management professionals in other countries who can be future customers, and develop the education network for use as an outpost for the development of new businesses in key target countries. J-water will also participate in joint research projects including EU Horizon—the world’s largest research & innovation program—to secure a globally competitive R&D capacity, seize opportunities for new overseas businesses, and create new markets.

Finally, K-water will shift to “One Team K-water” under which all employees of all departments are directly involved in overseas businesses.

Super-gap technology and global leading technology entail domestic demonstration and export at the same time, and elementary technology that is employed under specific business conditions also requires sophisticated customization. Thus, the Global Business Division will focus on marketing, outsourcing, and risk management, with individual departments assuming responsibility for implementing specific tasks so as to become more competitive in global businesses. On the other hand, all employees should share the vision of becoming a global water company, participate in professional training programs to reach the goals of global businesses, expand their global business experiences including working at international organizations, and equip themselves with the necessary ability to perform their roles in overseas projects.
K-water declared a new vision to pioneer the new era of water in 2023 and completed an overhaul to emerge as a global water company in 2024. Now, K-water is set to embark on a journey to secure a new growth engine and re-boost the Korean economy. As key players in carrying out global businesses, all members of K-water are expected to play their part in reaching the ambitious goals of KRW 20 trillion in accumulated total overseas orders by 2030 and increasing overseas sales up to 50% of total sales by 2035, with the ultimate goal of making K-water a global top 2 water company.