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By Geert De Clercq
PARIS, Feb 6 (Reuters) - Veolia Environnement isseeking growth in dismantling oil rigs, tracking endocrinedisruptors with tadpoles and recovering copper from mining wastewater as its traditional water business stagnates, its chiefexecutive said on Thursday.
With a two-year cost-cutting and debt-reduction plan largelydone, the water, waste and energy group is targetting areas withhigh growth potential, Antoine Frerot said.
The group is investing heavily in toxic waste treatment,dismantling oil rigs and nuclear plants, waste management forthe agrifood sector, water treatment for the mining industry andenvironmental services for the oil and gas industry, he said.Recycling and urban services are also in the frame.
"Each of these sectors have huge potential and we expectmarkets of several billions of euros and for some tens ofbillions," Frerot told a briefing about corporate strategy.
Its traditional water business, which still represents 47percent of its sales, is under pressure because of Europe'seconomic slowdown, regulatory limits on concession length andincreasing preference for municipal ownership of water networksthat saw Veolia lose its landmark Paris concession in 2010.
At each contract renewal in its French domestic market,where it generates 50 percent of revenues, Veolia faces pressureon tariffs and has to accept shorter contracts, and isincreasingly targetting industrial clients to counter that.
Frerot said once Veolia's Dalkia energy services jointventure split with France's EDF is finalised towardsthe end of 2014, it will incorporate Dalkia's internationalactivities and offer its services under the Veolia brand.
Energy services will then make up 21 percent of sales, afterwater at 44 percent and waste at 35 percent.
Frerot said that dismantling oil and gas rigs worldwide is amajor business opportunity for the group, as in the comingdecade some 2000 oil platforms need to be dismantled in theNorth Sea, the Gulf of Mexico and Southeast Asia.
With a cost of up to 100 million euros or more per platformand with dangerous waste including radioactive residues from oildrilling, Veolia says it is one of the few companies with theskills for these major projects.
In the past six years, Veolia has dismantled six oilplatforms in the North Sea for customers including BP, Total, ConocoPhillips, Hess and RoyalDutch Shell, Veolia Northern Europe director EstelleBrachlianoff told Reuters on the sidelines of the briefing.
"We have many more projects in the pipeline, we are veryconfident about this business," Brachlianoff said.
In its traditional water recycling business, Veolia needs toinnovate to stay ahead, Frerot said, and Veolia's Vilvoorde,Belgium plant was at the forefront of several new technologies.
Bacteria recuperate plastics from the plant's waste watereffluent and Veolia uses tadpoles to identify endocrinedistruptors in the water, he said.
Veolia Water director Klaus Andersen told Reuters thatVilvoorde uses a biological process under which bacteria excretepolymers which are then turned into plastic.
"If you stress the bacteria in a particular way, they buildup polymers in their cells," he said.
Mining and the oil and gas sector also offer Veolia highgrowth opportunities, Frerot said, as both use huge quantitiesof water, from which Veolia recoups minerals before recycling.
Veolia recovers about three percent of the copper in thewaste waters of the Codelco mine in Chile, he said.
Frerot said that the restructuring programme of the past twoyears was now mostly complete and said Veolia had sold about 6.3billion euros worth of assets in 2012-2013.
"We have sold most of these assets on avearge at more thanten times core earnings, despite the crisis," he said.
Frerot also confirmed that the company's net financial debtlevel stood at between 8 to 9 billion euros at the end of 2013,in line with its objectives, from 9.6 billion in september.
"In four years, we have divided our debt in two," he said.
Veolia releases 2013 earnings on Feb. 27.
