Addressing Water Challenges Amid Investment Gaps

Q: How does Latinoamericana differ from its competition? 

A: Latinoamericana stands apart thanks to our expertise in the water sector, which allows us to deliver high-quality, reliable, and timely water projects. Unlike many other companies in the sector, we focus on executing projects to the highest standards, with a commitment to technical excellence, safety, and environmental responsibility. Our goal is to build trust with clients by delivering projects that meet these rigorous criteria, ensuring they are completed on time and with superior quality. This focus on execution distinguishes us from the many smaller, less reliable players in the market.

Q: How has the hydraulic infrastructure industry evolved in the last two years, particularly in response to challenges such as climate change and water scarcity? 

A: The growing awareness of water scarcity, driven by climate change, has highlighted the importance of water as an essential resource for human life, agriculture, and industry. Despite increased awareness, this has not translated into significant investment in water infrastructure. While sectors like rail road, oil and gas, and energy have seen much larger investments, water continues to receive secondary priority in budgets. We hope that the new Mexico’s federal administration will address this gap and increase funding for water projects to make meaningful progress in improving the sector.

Q: How do you tailor your services to meet the specific regulatory and environmental challenges faced in different regions of Mexico? 

A: We have the ISO 9001 certification for quality, the ISO 14001 certification for environmental management, and the ISO 45001 certification for occupational health and safety. These certifications guide our project management methodologies, especially in water-related projects. We adhere to these standards to ensure high levels of quality, safety, and sustainability in our work. These certifications help us maintain technical solvency and foster trust with our clients, particularly in the private sector, where adherence to such standards is highly valued. These methodologies and systems of management distinguish us from other companies of our size and contribute to our objective of delivering excellence in every project. Additionally, our activity adheres to the environmental and safety regulations applicable in the country, states and municipalities where we carry out our works and services.

Q: What parameters guide your approach to projects, particularly in public-private partnerships (PPPs)? 

A: Our approach is influenced by several key factors, particularly risks related to security and social conflict. We prioritize regions with lower security risks, focusing on areas like the Valley of Mexico and the northern parts of the country. The southeastern regions, due to higher levels of social conflict, pose significant risks to project timelines and execution, except for some areas like Cancun and parts of Quintana Roo. Our client base is mainly composed of federal and state governments, particularly the local offices of the National Water Commission (CONAGUA). We generally avoid working with municipal governments due to the risk of delayed payments and financial instability. We also seek to create synergies with our other projects. For instance, if we are already working on a project in Mexicali or Baja California, we look for opportunities to expand in that region.  In relation to PPP projects, the water market has offered very few opportunities in this modality, with the EPC modality predominating for the execution of water projects.

Q: What measures does Latinoamericana take to minimize its environmental impact? 

A: We contribute by ensuring that a new technical solution is both efficient and sustainable. For example, we prioritize water reuse rather than simply directing treated water to a discharge. When constructing water supply infrastructure, we ensure hydraulic efficiency and energy savings to minimize environmental impact. When the client allows us to influence the solution, we apply our sustainability and circular economy principles to ensure the project benefits the environment as much as possible.

Q: How does Latinoamericana align its projects to the United Nations’ Sustainable Development Goals (SDGs)? 

A: Latinoamericana is fully aligned to the SDGs, particularly to the Clean Water and Sanitation goal. Our work directly contributes to this goal. The challenge is the significant investment gap. While we can contribute through our project execution capabilities, many more companies and resources are needed to develop the required water infrastructure. Mexico needs to greatly increase its investments to meet SDGs’ targets and ensure its population has access to clean water. Our goal is to make these projects a reality. Everything we do supports the provision of clean drinking water and the improvement of wastewater management, but achieving these goals depends on investment across Mexico and Latin America.

Q: What key areas or innovations does Mexico’s hydraulic infrastructure need to embrace to successfully drive sustainable development? 

A: Several areas should be prioritized to achieve this goal. Sustainable water sourcing is essential, as is avoiding over-extraction from aquifers because it leads to their depletion. Focusing on regions with sufficient rainfall and exploring alternative solutions, such as water reuse, are crucial for maintaining a steady supply of water without compromising environmental health. Reducing distribution loss is also a priority. Mexico faces an average 40% water loss in distribution networks. Addressing this issue through sectorization and leak recovery is critical. Although many water operators have investment plans in place to tackle this problem, the results have been insufficient, and more effective strategies are needed to improve the overall efficiency of the distribution system.

Water reuse presents a significant opportunity for Mexico, especially in the industrial and agricultural sectors. Technology allows us to repurpose wastewater efficiently, but legal and regulatory barriers often hinder progress. Indirect potable reuse, in which treated wastewater is discharged into reservoirs before being reprocessed for consumption, is a promising trend that could play a key role in ensuring water availability for future generations. Irrigation also requires attention. With 70% of water going to agriculture, modernizing irrigation systems can drastically reduce water consumption. A national plan to improve irrigation efficiency is vital for achieving sustainable water management in agriculture, which is one of the most water-intensive industries in the country.

Finally, regulatory support is necessary to successfully implement these initiatives. The government’s commitment will be essential for enabling regulatory changes and investments in water reuse and irrigation.

Q: What trends are expected to shape the future of the hydraulic infrastructure in Latin America, and how is Latinoamericana positioning itself to adapt to these changes? 

A: Latinoamericana is positioning itself by focusing on water reuse and advanced process engineering. The company has already gained experience in water reuse projects. We participated in the construction of a treatment plant in the State of Mexico, successfully addressing the challenge of mixing domestic wastewater with rainwater for drinking water production. 

Latinoamericana is also following new indirect potable water reuse projects in Nuevo Leon, Queretaro, and Leon. The company’s role is to provide technical expertise and proven technologies to help make these projects a reality. Latinoamericana is also enhancing its capabilities by incorporating Intecma, a new subsidiary focused on specialized engineering and technology for environmental and water treatment solutions. By separating Intecma from the main construction business managed by Latinoamericana, our group can focus on developing and implementing advanced technologies that support sustainable water reuse and other water-related solutions. This strategic move allows the company to better integrate global technologies with local expertise, fostering the development of innovative solutions tailored to Mexico’s needs.

Q: What are your priorities for 2025 and what milestones will the company reach during that year? 

A: Latinoamericana is focusing on growth, diversification, and expansion into new markets. The company aims to sustain a growth rate above 10% in the water sector. A key challenge is renewing our project backlog, as these are typically short-term contracts. The company will focus on securing new projects annually while expanding its presence in the private sector. About 90% of our revenues come from the public sector, but Latinoamericana plans to offer water solutions to private industries more frequently by developing a dedicated division for this market.

Intecma will focus on commercializing water-related technologies in 2025, while Latinoamericana aims to become one of the Top 10 companies in Mexico for technology commercialization by 2030. This shift from project integration to technology sales is seen as a significant milestone for the group. 

Finally, Latinoamericana Energy & Industry, a new venture launched in 2024, seeks to expand the company’s expertise in mechanical and electrical installations to other industries, such as those related to nearshoring, like automotive, food, and others. Latinoamericana Energy & Industry is also interested in specialized activities and services within the transport infrastructure sector. This company is currently involved in the construction of small solar park projects and plans to expand its footprint in energy-related services.

Latinoamericana is a business group dedicated to the design, construction, commissioning, operation, and maintenance of hydraulic infrastructure. It also provides advisory and consulting services for several sectors.