Scope#25 | Aguas del Altiplano / Aguas Nuevas
Visiting the Origin of the Water Source
“This is work that saves people’s lives.”
That is what I was told before I set off on this journey to Chile, and to be honest, I thought it seemed like a bit of an exaggeration. But after actually visiting the worksite and talking to the people there, I was sure of one thing: this was not an overstatement. This is the story of how I was forced by my experiences to change my preconceived notions.
Reaching the Origin of the “work that saves people’s lives” was no easy task. Departing Tokyo, my flight travelled via Sydney, Australia before arriving at the airport in Santiago, Chile’s capital. But due to a delayed flight leaving Australia, I missed my connecting flight and was forced to join the standby list at the Santiago airport.
Almost 36 hours after departing Tokyo, I finally reached the city of Iquique in the north of Chile. From there, I got into an off-road vehicle that drove over a decrepit bumpy road until at long last I arrived at my final destination―the Origin. However, as I stepped out of the vehicle, all I could see before me was just an ordinary little hut. I couldn’t help but think, “Is this what I came all this way to see?”
Inside the hut was a pump; every second, the pump draws 103 liters of water from an aquifer that exists 200-300 meters below the surface. The water drawn is collected in a tank, referred to as the copa, which is the word for “Wine Glass” in Spanish (because the shape of tank looks like Wine glass), is located near the hut but at an elevation of 1100 meters. Using the difference in elevation, water collected in the copa travels down an underground pipeline which covers some 80 kilometers. Midway through its journey down the pipeline, the water undergoes purification treatment before finally being delivered to roughly 162,000 households in Iquique and beyond.
The company responsible for collecting, purifying and distributing this potable water, as well as the collection and treatment of waste water, billing and collection for water utility costs, and customer service is Aguas del Altiplano (ADA).
Deserts, Freezing Temperatures, and Earthquakes
The water and waste water industry in Chile is privatized with each of the country’s 16 Regions outsourcing their water utility services to private businesses. In 2006, Marubeni Corporation entered the Chilean water market with its purchase of a company called Aguas Decima. In 2010, Marubeni expanded its market presence with its additional acquisition of Aguas Nuevas S.A. (AN), the 3rd ranked water business in Chile by number of households serviced. ADA, the company that owns the small hut at the origin, is one of 4 subsidiary companies of the AN Group.
Currently, the AN Group manages and operates water utilities in 5 of Chile’s Regions. ADA is responsible for the 1st and the 15th Regions; Aguas Chañar S.A. is responsible for the 3rd Region (supplying 90,000 households); Aguas Araucania is responsible for the 9th Region (supplying 230,000 households); and Aguas Magallanes is responsible for Chile’s southernmost 12th Region (supplying 50,000 households).
Geographically, Chile is a long and narrow country, stretching roughly 4,300 kilometers from the north to the south – a distance roughly comparable to the distance between Japan and Singapore. When you think about it like that, it is not difficult to understand that ADA and Aguas Magallanes for example, operating in the north and south of Chile respectively, must each adapt to working in completely different environments.
ADA operates its water business in a veritable desert, where throughout the year rainfall is a rare occurrence. Here, water sources are limited, and so water must travel a great distance before reaching consumers in this Region. And if you thought things couldn’t get more difficult, the water drawn from the ground here contains harmful minerals like arsenic. Under these circumstances, every drop of water must be carefully handled, and all impurities completely removed, in order for normal life in this Region to be viable.
On April 1st, 2014, an earthquake exceeding a magnitude of 8 wreaked havoc on the city of Iquique, causing the water supply throughout the Region to be suspended. Following the disaster, the Region was plagued by broken pipelines, power outages, closed roads, and disrupted distribution networks, which led to a shortage in water purification tablets. Sergio Fuentes, who at the time was a Regional Manager at ADA, fought tirelessly, through catastrophes piled on catastrophes, to restore the necessary lifelines to the region. Fuentes worked himself to exhaustion until finally giving in to sleep. It was unfortunate coincidence, remembers Fuentes, that a government official chose that time to come and observe the restoration efforts in the area. “Sleeping? At a time like this?” the government man admonished. Fuentes can now look back on this incident and laugh, but at the time there was nothing humorous about the situation.
The Potential Contained in “Trivial Details”
Just when I was starting to come around to the whole “work that saves people’s lives” notion, I visited the control center, where once again I came across a scene that would change my way of thinking.
On the massive monitors and screens of the control center, the status of the water being pumped and distributed was displayed before my eyes―but that wasn’t all. Updates on areas where problems have been reported, as well as status updates on how those problems are being handled, also appeared in real time on these large screens. “It looks like we’ve had 66 incidents reported in the last 24 hours,” says Kazutoshi Sugimoto, a Marubeni employee who works in Chile together with AN Group , “Most of them are problems can be dealt with remotely, but if, for example, we get a report about a burst in a water pipe, then we’ll actually dispatch a technician to go and fix the damage.”
“So,” I remember thinking, “this is the kind of work in which a general trading company like Marubeni is involved.” I had had this image of general trading companies as “dealing in bulk” and operating on a “BtoB level”. So when Mr. Sugimoto told me about the 66 incident reports the control center had received that day, I was surprised to learn that Marubeni employees are also concerned about such small figures. What I had at first assumed to be “trivial details” actually turned out to be incredibly important data.
In recent years, the acronym “GAFA” (Google, Apple, Facebook, Amazon) has frequently appeared across various media outlets. The reason that these IT giants are such a force around the globe is precisely because they collect, parse, and analyze large volumes of exactly this sort of data. In this modern economic reality, general trading companies such as Marubeni cannot continue to focus solely on “bulk” and “BtoB”. Embracing the value of collecting meticulously detailed data is the key to survival for general trading companies and at some point a reckoning will come for all those that have not adapted to the times. When that time comes, I feel that ADA’s practice of carefully collecting this type of data will be vital in the application of knowledge and experience previously unheard of in general trading companies.
Because ADA operates a business that encompasses everything from water pumping and purification, to distribution and customer service, collecting this data is especially meaningful. In other words, if ADA is the brick, the data is the mortar.
Combining Knowledge & Experience from Around the World
Though every drop of water drawn from the dessert is precious, this does not necessarily translate to every drop being profitable. Household Meters connected to the grid might not function properly, or a pipeline might spring a leak―water is sometimes even stolen. For a long time, reducing the volume of this profitless water, also called “non-revenue water”, was a problem for ADA.
Then, in 2015, things changed. ADA’s rate of non-revenue water saw a drastic decline after AGS-Administração e Gestão de Sistemas de Salubridade, S.A. (AGS) – a Portuguese water utilities company in which Marubeni is an investor – shared its knowledge and experience in highly detailed water distribution network management with AN. “AN enjoyed many advantages resulting from bringing Marubeni on board to help with management, not the least of which was the alleviation of our financial burden,” says AN’s CEO, Salvador Villarino, “but it was a huge deal for us to get our hands on the knowledge and experience of AGS.”
The Meaning of “Work That Saves People’s Lives”
It was a whirlwind journey, but I had at last finished my work in Chile and was on my way home. My plane back to Japan soared through a cloudless sky. As I looked out of the plane’s window, I noticed a mountain range that seemed to stretch on and on forever; its stone surface provided no hope for any plant or shrub with ambitions of growing. Every so often, I caught a glimpse of a town―settlements intermittently appearing along the mountain.
Long ago, people wandered along the sheer face of these mountains, until eventually they found some small stretch of level ground upon which to begin living. I wondered if the people living in those small towns down there today are the descendants of those original settlers. As I pondered this thought, I remembered something that AN’s CEO Mr. Villarino said to me. “The son of one of AN’s employees wrote an essay,” Mr. Villarino recalled, “in which he wrote, ‘My dad has the most important job.’”
As a person living in Japan, I take it for granted that when I turn on the spigot, potable water will come out of the faucet. For someone like me, the living conditions in the Chilean dessert are nigh unimaginable; for the people living on the dry dessert land of Chile, water is incredibly precious. ADA, and by extension Marubeni, shoulder the responsibility of reliably providing that water to the people of Chile.
As I came to terms with the “work that’s saving people’s lives” epithet, I began to gradually understand the meaning contained within the ADA worksite. It is at the same time a place that serves as a template for the future of general trading companies, and a place that is already producing results that align with the “Global Crossvalue Platform”, Marubeni’s professed vision for the future of the company. As I reflect on my long journey to and through Chile, though there were many bumps and hurdles, the knowledge I gained and realizations I had along the way made it all worthwhile in the end.
All information contained in this article is based on interviews conducted in December 2018.
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