A For-Profit Brings Clean Water to the Poor

Wednesday, December 3, 2008

Tralance Addy knows all too well what can happen to people if they run afoul of dirty water. When his company, WaterHealth International, was shooting a video to promote its water purification systems for rural villages, he posed beside a lake near Hyderabad, India, that was none too clean. The video producers suggested he reach down into the lake and let the water run through his fingers. Which he did. Unfortunately, he forgot to wash his hands immediately afterward. A few hours later, he became violently ill and had to be hospitalized. He didn’t completely recover for six weeks. Says Addy, 63: “We were trying to demonstrate something about bad water, and I really did it.”

Such are the extraordinary difficulties faced by profit-making companies trying to solve some of the world’s most stubborn problems. Addy, a longtime Johnson & Johnson (JNJ) executive, had retired early to invest in technologies aimed at helping poor people. Four years ago, he took over the struggling WaterHealth. About 5 million people die each year from waterborne diseases and billions suffer from such illnesses, so he saw both a big need and a big financial opportunity. The company is now in India, the Philippines, and Ghana, with more than 200 village purification systems installed, but eventually he plans on expanding to emerging nations all over the world.

WaterHealth typifies one of the latest trends in social entrepreneurship. A new generation of leaders believes it can do more for poor people if they operate as profit-making businesses rather than donor-backed organizations. WaterHealth has designed both a proprietary purification process and a simple facility for housing the equipment. It sells the systems to villages, helps secure financing, and runs the plants. After eight years, when the villages pay off their loans, the money they make from sales of water goes straight to their coffers?available for village improvements.

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Source: BusinessWeek (link opens in a new window)