China to buy water from Lake Baikal in Russia

Almaty. July 18. Silkroadnews – Chinese corporation LeEco intends to export water from Lake Baikal to China, the talks have been held with the Governor of the Irkutsk region.

“LeREE.ru plans to export goods from Russia to China, e.g., environmentally friendly products. LeEco management has already met with the governor of the Irkutsk region Sergey Levchenko and discussed, in particular, the ability to export drinking water from Lake Baikal to China,” president of LeREE (LeEco in Russia and Eastern Europe) Victor Xu said in interview with Russian “Izvestiya”.

Meanwhile, officials of the Ministry of Economic Development of the Irkutsk region explained the agreement between the Russian region and Chinese company has not yet been signed.

“At the recent meeting with the Governor of the Irkutsk region Sergey Levchenko the company’s representatives announced their readiness to develop a list of proposals for cooperation. So far we do not know what is there in that list, as have not received the documents yet. The Chinese side explained it will be ready no earlier than August 30, 2016. LeEco did not disclose the details”, explained in the ministry.

China’s LeEco holding corporation unites the largest Chinese online cinema Le.com, plant producing quite popular in China devices – smart TVs Super and smartphones Le Superphone, as well as an online store LeMall.

The platform is very popular, and in November 2015 sold 500 thousand of Le1S phones in one hour having stated a record for the sale of smartphones in China. Until now the platform was dealing with the sale of electronic equipment only, but in case LeREE agrees with the Irkutsk region they could also start selling drinking water through their online store.

The experts point out to export water in China the company shall first build a plant on Lake Baikal in Russia.
“At present there is no major leading producer of drinking water on Bailkal Lake, and those small plants operating there do not meet the international standards. In case the plant is built on the latest technologies and in compliance with the strict production standards, its products will be in demand not only for the Chinese consumers, but also, probably, by the Russian suppliers of bottled water,” director of “Clean Water” LLP Yuri Menukhov said.

According to him, the construction of high-performance plant requires about 1 billion rubles, with the positions of 0.5 liter, 0.6 liter and 1.5 liter to be in demand. For LeEco Corporation this amount does not look that big.

Speaking at the Petersburg International Economic Forum LeEco founder Jia Yueting said LeEco is going to invest between $500 million and $1 billion into the Russian market within next 3-5 years.

Y. Menukhov believes, the Chinese market is highly potential for potable water sales. Large population, lack of natural resources, poor environmental situation – these all factors contribute to growth of bottled water consumption by the Chinese people.

The analysts note, the bottled water consumption in China doubled for the last 10 years and now exceeds the one of the U.S. As the domestic demand grows the market volume could double again in the next decade. The market volume is about 45 billion liters per year or 33 liters per person per year, in money terms it is 1.5-2 times less than one of the U.S. and stands at around $2-4 billion.