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Water firm chief aims to make a big splash in England

THE dominant supplier of water services to Scottish businesses has signalled its intention to make a big splash down south as legislation to open the non-domestic retail water market to competition in England is poised to get Royal Assent.

LOOKING AHEAD: Business Stream chief executive Mark Powles said this is a really exciting opportunity to hopefully lead way in new market.
LOOKING AHEAD: Business Stream chief executive Mark Powles said this is a really exciting opportunity to hopefully lead way in new market.

Business Stream, which spun out of Scottish Water when the non-domestic market was opened to retail competition in Scotland in 2008, has watched the progress of Westminster's Water Bill with interest since its introduction in June.

With the Bill expected to be enacted in May, its chief executive declared the company is gearing up to tell customers in England the "story" of how its prices and water-saving services have delivered millions of pounds of benefits to customers north of the Border.

Noting that awareness of water efficiency has risen up the business agenda in Scotland since 2008, Mark Powles said: "This is a really exciting opportunity for a Scottish company to hopefully lead the way in a new market and, off the back of what we have done for Scottish companies, create real value and a real reputation in a new market.

"I think as we come out of recession that's a pretty good news story, I hope.

"There are some risks and some hurdles to jump over along the way, but genuinely in England people want to hear what Business Stream has got to say because we're not just talking about competition, we have done it for six years."

Mr Powles claims Business Stream, which will compete with major regional water authorities in England once the Act takes effect, has so far helped customers in Scotland make £36 million in consumption costs, with a further £30m passed on through discounts.

He noted it had helped customers reduce their carbon footprint by 28,000 tonnes by implementing measures such as smart metering, rainwater harvesting, recycling grey water for non-consumption and pre-treating waste generated by food and drink manufacturers.

And he declared a £225m deal to provide the water supply to the entire public sector in Scotland signed three years ago is on to deliver savings of £37m by the time it comes to an end in 2015.

In the case of some customers, Business Stream has supplied the capital up front to allow the company or organisation to implement water-saving measures.

But Mr Powles noted marketing water services to business customers is not always an easy sell.

He said: "Let's be honest, we sell a product that falls out of the sky that everyone thinks should be free, so you have got to work really hard to build an emotional attachment of being a valued supplier.

"In the early days, when we were first created, we had 0% brand awareness, we now have approaching 80% spontaneous brand awareness across the business community in Scotland... and we have done that of the back of trying to add value.

"We'll have the same challenge in England. It is almost like going back to year zero."

Mr Powles claimed that competition - which sees Business Stream go head to head with 13 rivals - has created a "vibrant" market in Scotland, albeit his organisation continues to hold 90% of the market.

He pointed out water companies from England are now moving to Scotland to understand how the market operates ahead of the privatisation down south.

He also noted that major ­companies are increasingly approaching Business Stream with a view to tapping into its services. Turkey firm Bernard Matthews is among those which have signed up.

Mr Powles said: "We handle all their billing and interface with the network operators, but where we have added real value has been to create an alternative water supply for them with a bore hole at their main production facility.

"We're in the process of building a new treatment facility to increase their production capacity."

He added: "Off the back of that we are now in discussion with quite a few other customers about doing the same sort of thing in different sectors.

"So I've been very encouraged that what we are doing in Scotland is resonating into England, and the phone is ringing or we are making good connections.

"If we are more successful and grow as a business, that's going to create additional value for our customers in Scotland through economies of scale, through more innovation, more expertise, so our expansion into a new market also helps our customers in our heartland."

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