The opportunity in yellow Chinese tap water

Dirty drinking water is a big problem in China. But thanks to new technology, water can now be purified cheaply, says Tom Bulford. That spells opportunity for penny share investors.

“I get up in the morning, buy a dough stick deep-fried with gutter oil and drink a cup of milk with melamine; at noon, I eat lean meat powder pork fried with pesticide-tainted chives. After work, I’ll then buy a fish that was fed contraceptive chemicals. At night, I’ll swig down a bottle of Coke containing chlorine. And yet, since I find myself still miraculously alive, I wonder when I became Superman!”

These are the words of Fan Xiaoming, a Chinese blogger. As you can see, he is not a happy man. Many in China are beginning to take a stand against poor public services and a government that tries to sweep things under the carpet.

Many are particularly worried about China’s food production and its impact on health. In May Liangjie Dong, a former researcher in molecular biosciences and bioengineering at the University of Hawaii, blogged that China has the world’s highest consumption of contraceptive pills.

But these are not only taken by women to stave off unwanted pregnancy. They are also bizarrely fed to fish in fish farms, and end up polluting the water. It has been reported that the pills help fish mature more quickly and can be taken to be sold on the market sooner.

Why the Chinese have no trust in their government

Whether all of this is true is beside the point. Word spreads fast these days, even in China, and Liangjie Dong’s revelations have only intensified popular mistrust of the Chinese environment and of food manufacturing processes. There is plenty of precedent.

There have been a number of Chinese food scares in recent years. Cases have ranged from dairy products contaminated with melamine that killed eight babies in 2008; rice flour contaminated with heavy metals; arsenic-laced soy sauce; watermelons that explode due to the influence of growth promoting chemicals; the use of bleach in mushrooms to make them appear fresher; and finally a story that I mentioned here last year, the use of borax to make pork look like more expensive beef.

I am going to China next month… I reckon I had better stock up with a few Mars bars! But this story amounts to more than just a little local difficulty. Chinese leaders know that they can no longer suppress such stories. They will spread like wildfire across the blogosphere and are more likely to be believed than any official words of reassurance.

Chinese officials are worried. They know that their power is no longer unquestioned. They know that they will only retain grudging popular support if they can at least run an efficient administration. They were roundly blamed for July’s train accident in which 39 people died. The general verdict was that eagerness for profit, which normally involves back-handers to party officials, had taken precedence over human safety.

 

35% of Chinese water is undrinkable

Now an even bigger problem is brewing. Last year China’s second national water assessment reported that 35% of the country’s ‘drinking water’ is in fact not drinkable. Thanks to the country’s rapid industrialisation, the water is contaminated at source. And water purification methods are outdated and by the time the water has travelled through corroded pipes it has all the ingredients to deliver a nasty stomach pain.

The Chinese are not in the mood to trust official blandishments and are taking matters into their own hands. Nothing is more essential to a healthy life than clean water, and while the Chinese may today be happy to stand under a shower, they are increasingly reluctant to drink it or cook with it.

And so a whole new business opportunity is emerging. It could be one of the biggest consumer markets ever. The new middle classes of China, and for that matter India and other developing economies, can afford to pay for purified water and intend to do so. Already sales of water purifiers have risen six-fold in China in the past decade and this rate of adoption is expected to be maintained.

This is a potentially huge market

Now some of the world’s biggest consumer products companies are eyeing this opportunity. Procter & Gamble, Unilever and Coca Cola are three giants that want a slurp of the action. Who will emerge victorious? Crucial to this will be the technology used.

The Greeks and Romans purified their water by the effective method of keeping it in silver jugs, a luxury not available to many today. The traditional method is to boil it but this takes time and uses electricity, as does another common form of treatment, ultra-violet radiation.

But there is another method that does not require electricity. It is cheap and it can deliver a supply on tap of purified, safe, drinkable water. I have been watching a remarkable web-cast of this technology and it is no scam. This method of purifying water has been approved by the most demanding authorities in the USA and China and is set to capture a major share of the fast growing market for ‘the essence of life.‘

I believe I have found a company that is filling this gap in the market. The company uses a simple method of water purification that has been proven to kill 99.9999% of bacteria and viruses and prevents contamination from reoccurring. And it does not cost the earth.

If you want to find out more about this company, you can read all about the company and the technology behind its water purifier in my latest issue of Red Hot Penny Shares.

If you are not already a subscriber, you have the chance to sign up for free for a 90-day no obligation trial.

There is a huge global demand for cheap water purifiers and I believe this company may well hold the key.

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