GE Water’s Sabol Rings Anything But Hollow on Zenon

March 1, 2006
When GE acquired BetzDearborn in July 2002, few imagined its footprint in water and wastewater treatment - targeting industrial applications...

When GE acquired BetzDearborn in July 2002, few imagined its footprint in water and wastewater treatment - targeting industrial applications - would grow to encompass $2 billion in sales in such a short time. Fewer still would imagine it would pull under its GE Water & Process Technologies (W&PT) umbrella the likes of Osmonics, Ionics and now Zenon Environmental, whose $656 million pending acquisition was announced March 14.

Still, GE might say it requires “ecomagination” - its campaign announced last spring to target sustainable business models: “clean energy, clean water, and other clean technologies” - to see the future in the multiple markets it serves. Under the GE Infrastructure division, beneath which GE W&PT falls, components listed in that plan were desalination and advanced membrane technologies, all of which the last three key acquisitions serve.

“The acquisitions of Osmonics, Ionics and soon-to-be Zenon are all opportunities for GE to broaden its product line to serve that very important industrial base that we have such a strong channel to,” said Colin R. Sabol, GE W&PT chief marketing officer. “We think the variety of technologies that we have solve water scarcity issues around the world by industrial as well as potable customers.”

Sabol joined GE in 1989, working his way up to finance manager for its GE Energy division. In 1999, he joined GE’s Corporate Mergers & Acquisitions Group, where he closed 15 M&A transactions valued at over $5 billion, including the acquisition of BetzDearborn, which launched the push into the water business. He signed up when GE W&PT was formed afterward and helped lead the business, which has doubled in size in less than four years.

He notes that Zenon fills a final niche in GE’s membrane portfolio, providing hollow-fiber membrane and membrane bioreactor (MBR) technologies. The acquisition also gives GE key access to potable water markets - an area that up until now it’s eschewed somewhat in favor of industrial ones where margins can be higher since they aren’t governed by a low-bid government process. About 60-70% of GE W&PT business is focused industrially, with 25-35% in water scarcity (desalination and brackish water reuse for industrial and agricultural purposes) and only 5% in potable markets.

But this may be about to change.

“We see the drinking water markets, both municipal and private drinking water customers, being pushed to take on more and more advanced technologies, driven by regulatory pressures from governments as well as consumer requirements for more and more pure drinking water. So, they’re using more and more membranes in the process,” Sabol said.

He signaled that rather than attack the potable market head-on, GE W&PT would focus efforts on smaller systems where “standard offerings” may be more acceptable over “highly engineered custom solutions” and there’s more reliance on consultants rather than in-house engineers whose “specifications” may leave out more innovative technologies.

Industrially, he saw great advantages in Zenon’s hollow-fiber technology as a more cost-effective solution over demineralizers for supplying boiler feed water. In addition, the power industry and others that use large cooling towers can purify blowdown water and reuse it - which “is good for the environment and good for their bottom line.”

Click here to read: An Interview with GE Water & Process Technologies Colin Sabol in full.

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