Siemens and Megacites

The May 9, 2011 issue of Forbes has an interview with Siemens CEO Peter Loscher.  The article highlighted the projected growth in the global megacities and where and how a firm like Siemens would fit into this huge market.  Key points from the article - -

• By 2050 demographers think cities will hold 70% of the planet - - roughly 6.2 billion people.
• By 2100, the U.N. estimates, Europe's share of the world's population will be cut in half to 6%, while Africa's will double to 20%.
• The developed nations, with their massive industrial infrastructure and huge consumer markets, still account for 70% of Siemens' sales - - but in the context of incremental growth, more than 50% of it will happen in emerging markets.
• Siemens has a new division - - Infrastructure and Cities, with 81,000 employees and $24 billion in revenue.
• Competition for Siemens - - GE, ABB, Alstom, and Schneider.
• World infrastructure market is estimated at $2.8 trillion a year, with $435 billion of that in products that Siemens sells.
• Approximately 50% of the world's GDP is generated in the 645 cities with populations above 750,000, the largest 40 cities represent 20% of global GDP.  The momentum is firmly in emerging markets.  While Germany has three cities with a population over one million, India has 46 and China has 160.
• 70% of Brazil's power flows form Siemens generators, the first of which was installed in 1894.  Siemens is working with Brazil's national grid operator to install "smart grid" technology to balance the flow of the 33,000 gigawatt hours of electricity Sao Paulo swallows a year.
• The cost of upgrading Brazil's electrical grid in time for the 2016 Olympics in Rio de Janeiro has been estimated at $260 billion.
• Siemens has 34,000 employees and $8.3 billion in revenue in China.
• A Siemens-commissioned study of more than 500 city managers, municipal employees, and private company executives around the world and found that transportation was rated the highest priority for investment, ahead of environmental protection and even education.
• Siemens is involved in high-speed rail projects in China and subway systems in Brazil.
• The business is changing - - there's simply not enough government money in most countries to pay for needed infrastructure.  So Siemens increasingly must find private partners and financing sources like development funds.
• Siemens is targeting 400 midsize global cities -- from Hangzhou to Chennai to Florianopolis.
• Siemens claims the world's largest water treatment business with revenue of about $2 billion a year.  The bulk are industrial users.
• Siemens has a "Sustainability Center" in London.
• Water happens to need a lot of electricity - - 3% of the U.S. load goes to water and wastewater treatment.  That produces demand for turbines and transmission lines.  It's one reason GE's Immelt loves the business.  "I like it, too," says Loscher.