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Suez says sewage offers great prospects

Suez Environnement, Europe’s second-largest water company, said future growth will come from improving sewage treatment systems in southern and central European countries.

“Our priority is clearly Europe,” Bernard Guirkinger, head of water at the Suez SA unit that will be spun off as part of the planned merger with Gaz de France SA, said. “We are extremely confident about our backlog of contracts.” Europe needs to spend €152 billion before 2010 on treatment facilities to meet European Union clean water rules, according to statistics compiled by trade publication Global Water Intelligence and cited by Suez Environnement. France’s share is about €2.5 billion through 2015, he said. Suez fell as much as 2.3% in Paris trading to €39.80 before paring losses to €40.15 as of 10:54 am local time. The shares have lost about 14% since the beginning of the year.

Suez Environnement’s focus on Europe contrasts with its bigger rival Veolia Environnement SA, which is moving into developing countries like China. Almost 80% of 2006 sales at the Suez waste and water unit came from the domestic and European markets compared with three quarters for Veolia. Degremont, Suez’s wastewater unit, is eyeing future contracts to build and upgrade treatment plants serving about one quarter of the French population which Guirkinger said don’t meet EU standards. (