Episode Transcript
[00:00:00] Speaker A: 140 billion. That's the total funding requested in utility intended use plans tied to nearly 17,000 state revolving fund projects tracked by Bluefield this year.
In simple terms, these plans are a snapshot of what utilities say they need to spend on critical water and wastewater infrastructure. But to put this in perspective, that 140 billion is roughly the equivalent of the entire annual US utility market for capital and operating expenditures combined.
Let that sink in for a minute.
I am Reece Tisdall, and this is the future of water, which we talk about. All the ways which companies, utilities and people are addressing the challenges and opportunities in water.
Today talking episode 143. And it's going to be a good one because I've got Antonio del Olmo out of Valencia, Spain.
He's going to be on. And we're going to talk stormwater. Yes, stormwater in Europe and why the Bluefield team has sized that market to reach 653 billion euros by 2036. I'll let you do the exchange rate math, but it's a lot of dollars.
After that, we're going to talk a little bit about what caught my eye this past week in the world of water and why I think maybe you should care, too.
So let's get to Antonio and talk European stormwater.
All right, so I'm joined by Antonio del Omo. Antonio, tell me what's going on. How you doing?
[00:01:41] Speaker B: Hello. Good. Pretty good. I mean, we were on iPad last week and it was pretty busy and really happy to be here to talk about Stormwater.
[00:01:52] Speaker A: All right, so let's step back for two seconds. So I don't think what people understand, if you're in the US and you go to Weft Tech or you go to Ace, those conferences, I mean, Ace, I'll be generous, 10, 15,000 people attend, mostly drinking water. Focus. You go to Weft Tech, we're looking, I think this year it's going to be in New Orleans and that. That's in the fall. It'll be, I don't know, 20,000. It seems there's. There's definitely a rebound in conference and trade show attendance. Ifat, on the other hand, which. It's in Munich. Right. Happens every two years.
How many people were there?
[00:02:30] Speaker B: Around 100,000. I think even more. 120. 120,000. I mean, it's. It's a huge event.
[00:02:39] Speaker A: Yeah. It's mind blowing. Right. But it sounds like it was great. It was great. I think Bluefield, you and a team of people went, had a really, I'd say Fruitful event. It's in Munich, like I said.
Any quick takes while I got you?
[00:02:55] Speaker B: Honestly? Well, you already know what I'm going to be talking about, but it was kind of interesting to see people ask beforehand about stormwater, ask about irrigation in Europe, ask about data centers and industrial in general. I mean, those, I think those were the three main topics that we got asked a lot about.
And yeah, I mean, pretty interesting conversations with existing clients and prospects. So it was very interesting. Yeah.
[00:03:31] Speaker A: All right, Nice. All right, well, if anybody's interested and you want to learn more about ifat what happened, you can always reach out to Antonio at Bluefield or, you know, the rest of the team. I'm sure everybody in Europe is happy to talk about it, what they're seeing and so forth. So in this case, though, that's not the reason we got on. And that really wasn't a setup. That was purely a ad hoc comment that I was curious about because we haven't talked about it one on one. But you've just put out a report on stormwater in Europe specifically.
The numbers, to me, quite honestly, are staggering.
We can get into those numbers. I mean, I think in the intro I've said, you know, €653 billion over the next decade or so. Correct me if I'm wrong, but even in dollar terms, that's a lot of money.
And so let's just talk about, you know, I think the data, what it says in the report is big. The last three decades.
One of the reasons we're talking about it is the last three decades really been sort of the worst for flooding in 500 years of reported records. If I'm looking at the data, I think I shared something on LinkedIn on that. But let's just talk broadly.
Is it a crisis now? Why is it a crisis now?
But also, you know, not just the long term, but what's the infrastructure challenge that is ahead of us?
[00:04:56] Speaker B: I think stormwater has become a crisis because we're seeing, listening. I mean, I know this is happening all around the world, but particularly in Europe. We're seeing several factors coming into place at the same time. Right. So we've got a lot of extreme events.
A lot of extreme events have happened in the last five years. Right. And it's taking a huge soul both economically and in terms of human lives as well.
So public awareness is probably at a.
At a, At a. At a big. I would, I would say an inflection point because, you know, this, this things take time, but people are expecting governments and politicians to move some influence, investments, investment plans forward. Right?
So that's one angle. The other angle is these events are happening more and more often. So question is, why is this happening? Right? And that's when where we look at historical data and it's clear that these events are happening more recurringly. And you know, you know, I'm an engineer and when I used to design this kind of infrastructures in the past and we always look at return periods, right? And for that we use historical data.
And it seems like when we were saying, yeah, this, this sewer network or this, you know what, or a dam is being designed for a 100 year return period or 500 year, those numbers no longer stand.
And what I mean is that probably a 100 return year period is now 50 and a 500 is a 100.
This links very well to an article I read recently about how statistical models don't account well for extreme events.
And it seems to be the case here.
We are seeing this repeatedly, Black swan events, you know, plus we've got climate change as well, so which could be, could very well be the reason that explains why these events keep accelerating. Right?
[00:07:24] Speaker A: I mean, I had a conversation with someone last week and we were talking, it could have been stormwater. I don't remember exactly the immediate topic or specific one in that, but and there was a question or the point that they made. It's like, ah, climate change, you know, I don't know if I'm a believer or not. That's fine, right? I mean, sort of, I mean I'm a believer in it. At the same time I think there's a problem, right, but the data shows that there's a problem irrespective of what you call it and what it is. Right. And so like you said, you've got these hundred year events that are now happening several times in a decade, whether it's in the US or Europe. The numbers, like I said, I showed something on LinkedIn about precipitation records in Europe that you have in the report actually was one of the, one of the slides that I was sharing with all my connections. We have something similar in the US as well. The data shows kind of the same thing, same Trend the last 30 to 50 years. There's just been this trajectory upwards and like you said, that's resulted in, I mean, you live in Valencia, right?
So was it last year, two years ago, where there was flooding in Valencia, October 2024?
[00:08:40] Speaker B: Yeah, yeah.
[00:08:41] Speaker A: And so I don't know how many people died and what the ultimate damages were, but I know in the report, you know, in 2024 alone, because of stormwater, one of the numbers I think you have is there were more than 300 deaths in Europe.
There are almost half a million people displaced and 18 billion in damages, which quite honestly seems low.
[00:09:04] Speaker B: Yeah. And I actually think that number is not accounting for, it's only accounting for public property damage. Not private.
[00:09:14] Speaker A: Yeah, 100%. Right. And I think in the US, you know, the way NOAA, although NOAA I don't think tracks climate events anymore that shut down, whether it was dozed or just the administration shut it down. But you know, when we look at extreme precipitation events, if you go through it, I'd say if I recall 60 to 70% of these climatic events are water related and that's flooding of property.
It's billions, trillions of dollars of damages over time, over decades. The data shows that, I think cities and towns, as well as farmers, quite honestly, everybody's looking to say, when's the next big event going to come? So then the question is, if we're not going to prepare for it, I think we need to adapt to it. Right. You know, it's, we're now in the adaptation phase.
So that includes, you know.
Yeah, pipes, pumps, valves, what, you know, how do we, how do we deal with it?
Let's talk a little bit about like Europe as a whole. So Europe, Europe is projected to spend, I think your number, I don't know the math behind it, but Europe is projected to spend nearly 70% less than what's needed to maintain basic service levels. How does a market that large stay so chronically underfunded?
[00:10:44] Speaker B: Yeah. So just to be clear, that benchmark that we set up for Europe means assets being replaced at a 2% rate every year. Right. Which is what asset management experts recommend, be it for, you know, wastewater, drinking water or any other facility. Right.
So I think this applies both to wastewater and still water. We have been, I guess, that underground assets are not that popular to invest in. Right, right. When it comes to public investments, you're
[00:11:24] Speaker A: telling me politicians don't want to stand in top of a road and say there's a bunch of pipe under the ground that we just spent billions of dollars on.
[00:11:31] Speaker B: Yeah, I mean, I mean, I'm sure that is one of the reason and the other one, quite honestly, is that they're not looking at the maths because we've spoken about this. I mean, I don't know how many times with Europe.
Fiscal is very fiscally constrained. Right. Every country is. I mean, our debt ratios are over the roof. And every dollar spent on stormwater is a very good return on investment. Right. When you look at the damages that these extreme weather events are producing. So it makes sense to invest in stormwater and to invest more and more.
But we do know that, or at least if nothing changes drastically in Europe, this is not going to happen.
We think investment is going to. Yeah, I mean, we do think it's going to pick up more than it has been in the last 10 years, or we could say 50 years, but it's not going to be enough. We're still going to fall short.
[00:12:39] Speaker A: Right. But isn't one of the challenges that there's really no one in, no one's in charge or overseas Stormwater. Right. Who's really responsible for managing it? Is it because it's the management of it is so, I don't know, diffuse. Is that the right word I should use, rather than, you know, wastewater treatment? Everybody's, you know, you have your customers, you're providing wastewater collection services, runs the wastewater treatment plant, plant, you treat it, that utility is in charge of that treatment. They stay within the regulated guidelines and so on and so forth. Stormwater, you've got transportation, you've got roads and runoff, you've got cities, you've got retail facilities, large roofs, large parking lots, you get runoff there. You have the city itself. You have, and I've said this before, Department of Recs and Services, you know, public cities, all these other agencies.
Where does the budget fall? So, I mean, the European countries, do they have, I mean, I don't know, are we seeing dedicated stormwater fees or anything like that in place to help manage this?
[00:13:48] Speaker B: Yeah, you're on point. That's one of the biggest problems that Europe. Europe has. So when it comes to stormwater regulation, the way Europe has approached it was by creating regulation for how roads should be built. Right. How buildings should be built, how commercial facilities should be built. So I'd say that we do have regulation to act locally at a micro level, but when it comes to acting at a holistic level, there's no oversight or little oversight. So there's no still water fee whatsoever in almost any European country.
Think Germany and perhaps Sweden and the UK are, they do have something, right. There's no national budget line as opposed to drinking water or wastewater, and there's no one reporting. And why is no one reporting? Well, because the spend is touching many areas.
Urban development, flood protection, even wastewater. A lot of the wastewater. And the sewer networks are designed for both wastewater, sewer and also stormwater. So there's no visibility to what actually is being invested into stormwater.
And that, and that, and that which you cannot, you do not measure, doesn't exist.
[00:15:14] Speaker A: Right, so.
And I know throughout the report you talk about a number of, you know, there are all sorts of examples. I mean, do you have examples of like spending or after events, like we talked a little bit about Valencia, what did they spend? Are there any markets or countries that do anything specifically?
[00:15:36] Speaker B: From a general standpoint, countries only react when an extreme weather event happens.
And the way they react to that is a little bit asymmetric between countries.
Netherlands, for example, is one of the good examples. They suffered in 1953 a huge flooding event and they decided that this had to be tackled with and they have been using an initiative called the Delta Fund since and they have been investing regularly every year to prevent it.
So the Netherlands is probably one of the most advanced countries in Europe.
On the other hand, on the other side of the spectrum, you've got Italy, right? Italy suffered in the areas surrounding Rome. In that region, they suffered heavy, heavy and extreme rainfall in May 2023.
And I could not but laugh when I heard that the government was going to be spending 1 billion in recovery.
Which seemed, when I read the headline, it was like, hey, these guys are reacting.
But when you look at the footprint of the news, it said that was going to be invested during a 10 year period.
That's 100 million for Rome and its surrounding areas, which is nothing in my opinion. Right, right.
[00:17:04] Speaker A: I mean, I think back to Valencia, I think you had said they put in for Valencia alone was 3.7 billion in tenders at least whether it's fully executed on, I think that's one of the challenges. So when we look at it, so the number 643 billion euros and projected capex seems like a huge opportunity, right. You'd think that vendors, companies would be licking their chops, right? They'd say like, we need to go to Europe. We've got, we sell all the pipes, pumps, plants, valves, catchment basins, you name it, whatever infrastructure is needed for stormwater management.
Why aren't they in Europe? Well, how is it? Or are they in Europe? Maybe that's a better way to put it. And are all markets the same? Where should they start?
[00:17:55] Speaker B: Well, first off, not all markets are the same in Europe, that's for sure.
And we go through this in the, in the report, right?
When you look at countries like France, Spain, Portugal or the uk, those are concession driven markets. So approaching the market is you need to go through the Concessionaires.
When you think about Eastern Europe though, those countries are being right now, those are the countries that are being channeled all the money from the EU funds.
So those are the construction companies making the decisions on what assets are being built there. Right. Those are the decision makers for oms and engineering firms.
When you look at the Nordics, meaning Denmark, Sweden, Finland, those are more focused on eco friendly solutions and sustainability.
So the way, meaning with all this, what I mean is the way you approach the market is radically different in each country.
And then you go to the reality, another reality which is that, I don't know, we always say that Europe is very fragmented. This is something that, a mantra that we keep repeating ourselves.
And it is true. You see a lot of regional distributors and regional manufacturers that work only in Iberia and they don't move further than that. And the same thing applies to Germany, Austria, Romania, Italy. So it's a pretty fragmented market right now. And then you've got obviously the big players, but they have to compete against those regional ones that are usually very well connected at a local level and are usually cheaper than the big conglomerates, right?
[00:19:59] Speaker A: Yeah, essentially. And I've heard this before through conversations of US companies looking at Europe, it's really tough to be a pan European player. Right. You kind of have need multiple strategies or solutions or approaches because of the variability in the market itself from region to region, country to country.
And yeah, it's very relationship driven.
[00:20:24] Speaker B: Right.
[00:20:24] Speaker A: You know you get these construction. I mean how do you break into, you mentioned Spain for instance. You know, you've got these construction companies or these local players, they've got the relationships, they're sort of so embedded and entrenched. How do you come from elsewhere and, and, and break in unless you have some, you know, fancy new mousetrap that really shows value add.
So let's break down the forecast itself. I mean, I guess the.
What is the forecast? How does it break down generally speaking, you know, between like conveyance and CAPEX and et cetera, all the pieces. Any sort of top line takeaways?
[00:21:06] Speaker B: Yeah. So first thing forecast is for a 10 year period from 2026 to 2036 inclusive. The capex spend is broken down into five categories which is capture, conveyance, storage, treatment and early warning systems.
And within those we have inlets, sustainable urban drainage systems, pipes, manholes, pumps, overflow structures, sensors, fault shapers, interceptors. I mean I could go for a while.
[00:21:40] Speaker A: You probably. Are you reading this to your, your child at night to put them to sleep there? It's you know, there's so much detail.
[00:21:46] Speaker B: I haven't tried it, but I mean, I think it's a good one. Yeah, I should, I should try it. But yeah, I mean, we go into, into a lot of detail in the forecast and then you also have.
We break down equipment versus labor also as well. That's another dimension that we, that we break down the forecast into, plus, you know, countries, regions.
So it's, it's pretty detailed. Yeah.
[00:22:11] Speaker A: Nice. Yeah. And I think there's a lot of value, I mean, as far as.
Let's talk a little bit about conveyance, because that's a big chunk of it, right. For obvious reasons. You know, a rain storm event, you got to move the water.
What's the traditional model of selling that equipment? What are the approaches and what does it look like going forward?
[00:22:33] Speaker B: Well, a huge chunk of the market is pipes. Right. And when it comes to pipes, you immediately need to think about materials. Right. So depending on the material, the production is either more local or, or you could be more regional in distribution and such.
So plastic pipes are easier to move around than concrete.
So right now in Europe, we still have a lot of local distributors. There's no consolidated pipe manufacturer in Europe. Again, difficult to be pan European. Right.
And it shows with pipes. So very fragmented market.
And then the biggest categories are for manholes and pumps.
So from an engineering standpoint, I guess the most interesting one is pumps. Right. Because that brings end sensors as well, because those are the most digitally driven assets in the products that we have considered.
And that is an opportunity because it's not only about providing the hardware anymore, it's about providing a service. Right. For the, for early warning systems, for the, for utilities to react, for CTs to react to those extreme weather events.
And those for me are the most, the most interesting case into Stormwater are in my, are in my opinion, pumps and sensors. Right.
But just. I guess it's out of my own curiosity around how this, the modeling is done.
[00:24:13] Speaker A: Yeah, I think that. But I mean, I, I don't disagree. That is sort of if we're looking towards the future, right. What does it look like? And so you have these pumps and how do you connect them and sensors creating a connected platform that also integrates with weather, weather, meteorological data.
As you know, we've looked at companies that have tried to connect that and you know, gates open and close and valves open and close, you know, and leverage storage base. You know, there are different places, you know, that already exists in some cases. But how do you leverage that existing infrastructure? Even Withhold stormwater and then release it slowly or as storm events pass through. That's super smart. But it feels like we're a long way from that. If anything, I feel like we hear more about nature based and nature based solutions than we do the smart stuff. Am I crazy in saying that? What do you think?
[00:25:12] Speaker B: What do you mean? It's more common for passive handling.
[00:25:17] Speaker A: Yeah, but maybe it's just what I'm seeing.
I think the connected the digital tools and solutions is really interesting. I do feel like. Or maybe a better way to ask it is what's the role of nature based solutions? Whether it be know wetland management or some hy nature based hybrid approach. Is that in our forecast and is that a share of the pie?
[00:25:41] Speaker B: Yeah, and actually nature based solutions have the biggest or the highest benefit to cost ratio from all all the solutions that we have looked at. So I guess that nature based solutions rank the highest. And then you've got early warning systems. Right.
I think that when you're selling a digital service, a digital model and an early warning system, it is very marketable. It's easy to explain to the general public what you're doing. While nature based solutions are more at a micro level, are on site and perhaps are not as. I'm not saying that it's not visible, but they have to be huge micro projects for them to make it to the press. Right.
So it's more of an ongoing effort, one small step at a time where early warning systems, you know, it's like
[00:26:37] Speaker A: a, well, it's almost like a software. Right. You can implement it and it doesn't take a lot of labor. It doesn't take, you know, it doesn't take the scale. Right. I mean it obviously takes some hardware, takes some software, takes some data management and you know, sensors and such. But yeah, in some ways it is more.
But at the end of the day it's an early warning system. But something's got to back that up. Right. So then how do you manage that on the back end? And that's where additional capex needs to be applied, whether it's storage or whether it's valves.
[00:27:13] Speaker B: No, you're totally right. I mean even if you have a great early warning system, if you don't have the infrastructure to manage a flood,
[00:27:21] Speaker A: it's like standing at the beach in front of a big wave with no preparation.
[00:27:27] Speaker B: Yeah.
[00:27:28] Speaker A: So I mean along these lines, right? Whether it be digital, maybe that's a place to focus.
What kind of. I mean obviously there are companies that are targeting this. I mean did we look at companies and who's doing interesting things when it comes to stormwater management in Europe?
[00:27:48] Speaker B: We've profiled more than 60 companies in the report. So there's a bunch of companies we could talk to about.
We've got equipment manufacturers, we've got engineering firms, concessionaires, construction companies. I mean the type of companies that are willing to address the stormwater market is quite vast. Right.
I think again the most interesting or the two trends that I'm seeing is dominant for the next 10 years. One's going to be consolidation for sure. So we're seeing companies like aco, Rihau, Vner, Burger, Aliaxis, Georg Fisher, Frankiske, crh, all these companies and I'm sure this is going to happen eventually, but they're going to be buying other companies, regional companies across the continent, right. And they are going to become this huge companies with a portfolio that offers solution across all the stormwater value chain.
That's a big trend that needs to happen because if not, these companies are not going to get the economics of scale that they need to grow.
That needs to happen. That's one angle. The other one in my opinion is digital service providers. Right. So companies like Autodesk, Bentley, DHI are getting into agreements and partnerships with engineering companies and they're starting to provide more and more solutions to their end users. Right.
And to the local administrations. And that's an interesting trend as well because it seems like the power balance is shifting right now. So those that, those companies that are able to provide an integrated solution to the problem are the ones drawing the attention.
[00:29:53] Speaker A: Yeah, no, I think that's super interesting. I mean to your first point about consolidation across, I mean some of the companies you mentioned, they're big hardware players, right? Where if you're talking Georg Fisher, crh, I mean CRH just bought Axios, which, spoiler alert, that's what caught my eye this past week. So I'll follow up with that in a bit. But, but they've been getting into stormwater, right. And that's one aspect of it. And then you mentioned Aliaxis. I know through Aliaxis, I think it's through their venture group or Aliaxis Ventures.
They acquired Opti several years ago. They were Boston based but sort of stormwater management.
So these hardware players are moving what I would say horizontally across the value chain, adding capabilities beyond just structures, right. Hardware and equipment, they're moving, they're edging into digital, they're edging into treatment, other services. I think that is super interesting
[00:30:54] Speaker B: and
[00:30:55] Speaker A: yeah, and I think they see the opportunity. I mean it does feel like,
[00:31:01] Speaker B: you
[00:31:02] Speaker A: know, historically everybody, folks, you get the drinking water. Obviously everybody wants to focus on drinking water because there's their water quality issues
[00:31:09] Speaker B: and
[00:31:11] Speaker A: they're health risk. Right. Everybody should have clean drinking water. The wastewater side of it is the big opportunity because people I'm going to keep it simple. They want to go swimming, they want to go to the lakes. But those wastewater issues are creating drinking water problems. So that needs to be addressed. But the scope is very defined of what it is and where it is. Stormwater, as we started out talking about trends, is the next frontier, if you will. That's something that we're seeing a lot more interest in just from our own clients, even working with asce, the American Society of Civil Engineers. We help with them on their rapport with data and sort of try figuring out trends and grading U.S. infrastructure.
And stormwater has emerged over the last two to four years as a key area of focus for them because like we both agree we see it as a problem and trying to figure out how big is a problem, what is it in cost and then think lastly, I think the digital piece is interesting, right? These are in some cases can be, I don't know, bolt on solutions that can help size and navigate the challenge maybe more efficiently. Right. Than other than just laying pipe. Yeah, I think it's super interesting.
[00:32:38] Speaker B: Yeah, I agree. And, and we're seeing a lot of moves. I mean it's not like companies are not aware that if they want to grow, they need to grow in stormwater. I mean it's an obvious it's a less populated area right now by it's not or at least not as populated as wastewater or drinking water is. So this, there's opportunity. Right. And I recently read Rumble had acquired MBDAN in 2026. They acquired, they arup built a proprietary platform for neighborhood scale suds, Aliaxis, like you mentioned, also acquiring capability. So I think people are aware and they are positioning themselves towards this future, right?
[00:33:25] Speaker A: This, yeah, 100%.
[00:33:27] Speaker B: No.
[00:33:27] Speaker A: And I, I, like I said, I think it's super interesting and I think the scale is attractive. The question is what are the channels to market? Right. And how do you do it no matter where you are, whether it's through local distributors, whether it's through M and A, et cetera. So yeah, I think it's great. So I think the report is super compelling.
Seeing what it looks like going through it, I think anybody who gets it, reads it will be super impressed and you took the lead on that, so thanks for doing that. And I think back in the day when it was Eric Bindler working on U.S. stormwater here, when we worked on that, it felt like for years trying to build the model to actually forecast it, because it is hard. Like I said, when we were looking at three primary different areas, right, you're looking at the municipalities, the utilities themselves, but they're only part of the puzzle. Then you're looking at real estate and property owners, like, what does the real estate market look like? And then you look at transportation, and there's wide variability from property to property, let alone state to state. So it's not an easy endeavor.
Anything we missed, anything that jumped out at you and Stormwater Report?
[00:34:48] Speaker B: I think we've covered most of it. I mean, not, obviously not all of it, but.
But I think the most important points we have.
[00:34:55] Speaker A: Yeah, well, we don't want to give it all away because, you know, I was told not long ago by someone, reece, you give away too much information on your podcast.
You know, it's interesting, right? That's why we talk about it.
So with that being said, what else you got coming down the pipe? Anything of note?
[00:35:16] Speaker B: Yeah, we are continuing to work on country profiles for Europe. So we already published Netherlands, Germany, France, Italy, and right now we're working on Spain, Portugal and the uk and we will probably also publish Poland and Romania by end of the year. So those three will be published before the summer and the other two probably on Q4.
And we're also working on new data sets for Europe Municipal Service, which I think are going to be a game changer.
I don't, I don't want to give out a lot of the details. Don't.
[00:35:57] Speaker A: Don't spoil it. Don't spoil it. People will be.
It's a lot of information.
Got a little ways to go.
[00:36:06] Speaker B: I think people are going to be a little bit overwhelmed with everything that we're going to be publishing in the service. So, yeah, I'm excited about it.
[00:36:14] Speaker A: I think I'm overwhelmed. I was on a call yesterday with the data team and we were talking about that and other things, and just there's a lot to. Lot to unpack.
[00:36:25] Speaker B: Yeah.
[00:36:26] Speaker A: Well, that being said, busy, busy. We're heading into summer. I mean, you and I were talking before we got on this. I need to get to Europe, see the Europe team.
Not excited about going to Europe in the summer.
One, because there are just so many tourists. Two, it's smoking hot. I'll take smoking hot, but it sure is nice New England in the summer in Barcelona. But also I'm scared to look at plane ticket prices. God only knows what those are right now. I bet they are through the roof and climbing. So that makes me a little nervous.
[00:37:00] Speaker B: I mean, you know, we love to have you, but I honestly, if I were you, I would wait it out.
[00:37:04] Speaker A: I mean, it's not like I'm going to Sagrada Familia. I'm usually just going to the office, I'm working, and then we go out and have dinner and drinks and, you know, I do that for better part of a week and then I head home.
Always productive. But it's not like I'm living glamorously sitting by the pool all day.
So that's okay.
All right, Antonio, thanks, Maine for jumping on a. Really, really appreciate it. And I'm sure if anybody has any questions about just Europe municipal, the Europe markets as a whole, in this case stormwater, you can always reach out to Antonio. The easiest and most general approach would just be to go to waterexpertsluefieldresearch.com so. All right, Antonio, take it easy. Thanks a million.
[00:37:49] Speaker B: Thank you. Bye.
[00:37:52] Speaker A: All right. It's fantastic to have Antonio on one because he's just, I don't want to say winging it. That's not fair. He knows what he's talking about.
But it's just a conversation we have. And this sort of conversation, it's exactly what our conversations are like, just one on one as we're catching up on things. So with that being said, let's wrap things up with what caught my eye this past week. Well, what caught my eye was, as I already mentioned, CRH is $700 million acquisition of Axios Water.
So on the surface, it's kind of a wastewater nutrient treatment deal. But underneath, what really gets me excited, it's really about a convergence of infrastructure, private equity, platform building and water.
So why should everybody care? Well, I think what our infrastructure players are definitely, as Antonio mentioned, but also this is a good example. These companies are moving across a value chain. CRH is, it's not fair to say it's no longer just selling pipes and precast assets. I mean, that's their core, that's what they've been doing. But over the past couple years, they have been acquiring positions beyond their core capabilities. So with Axios, it's moving deeper into what we would call advanced water treatment, biological nutrient removal, and really compliance driven services.
So this is starting to blur the lines between hard infrastructure suppliers and technology providers. It'll Be interesting to see what the competitive landscape looks like. They won't be obviously a big player initially, but they're growing their position that it's going to pit them against companies like Xylem and A Veoli in some cases, among others.
Secondly, I would say the nutrient compliance is a growing theme, I think. According to our data, more than 1100 US wastewater plants are currently in violation of nitrogen and phosphorus discharge limits.
So while EPA estimates secondary and advanced treatment needs exceeding 150 billion over the next 20 years, including nutrient treatment, the acquisition really is a bet on regulations and a need to address these challenges. It's a big problem. And so I look forward to see how CRH continues to grow, build this out. And then lastly, private equity, you know, it can't be overlooked. We've known for some time that KKR was exploring exit alongside with xpv who was also invested in this. But private equity continues to shape the competitive landscape. So Axios was built through a roll up of what I would say niche wastewater technology firms. I want to say was six or seven over the past couple years since maybe I guess to technically Axios came to be in 2021. What I like is it's sold to a strategic hasn't just passed off to another private equity firm. It's another sign that water remains attractive investment for others looking to scale in what is a fragmented market. So super interesting, keep saying that again and again. And I really like it because crh, it's a well capitalized. I mean they have $37 billion in annual revenues. So we're not talking small potatoes here.
They're a real player that sees growth in infrastructure, structure, structural investments. But also now we're seeing bigger water quality focus. And that's a key theme that they have actually said as much and they're doing so by acquiring other companies, rounding out their portfolio and moving across the value chain. So we look forward to seeing how this unfolds.
With that being said, that's a wrap. So if you have other ideas or topics you'd like us to tackle, you can always send us a Note@water expertsluefieldresearch.com We've been getting really good feedback. I really appreciate just the notes on the side that you appreciate the podcast. We are doing this for you.
We want to continue to do it for you. And so that feedback really helps. And just everybody likes to hear good things. We're not like anybody else, we're the same. So I want to thank Mike Gaylor, Ryan Sullivan, Kelly Talbot, Steph Aldock those are people behind the scenes that really make the wheels run and spin to get this podcast out to you, but also people like Antonio and Megan Bondar and all the other Bluefield analysts who jump on to share their thoughts and insights.
And as always, like I already said with Antonio, if you have questions about their specific topics and what they're working on, you can always send us a note and they're happy to jump on a call. That's what we're here for.
So this is the future of Water from Bluefield Research, episode 143. Who would have ever thought we'd get this far? Until next time, be well, be safe, and take care.
