KX Industries (Orange, Connecticut), the developers of an ultra
low price but high value water filter system says it has begun the search for partners to get the product to end users who desperately need it. The KX microbiological system filters water free of viruses, pesticides, and bacteria, and at average drinking water consumption levels, it will cost a family about 10$ per year.

The company expects that bulk of the consumer market for the filter is likely to be in developing countries in Latin America, Africa and Asia where access to affordable drinking water is still restricted to the middle and top of the pyramid consumers. And this may well be the case. The UN estimates that 1.3 billion people already lack access to safe drinking water and by 2050 it will affect 4 billion people. Water-related diseases kill millions each year. It is also estimated that 6,000 children die every day with lack of access to drinkable water, and 50% of the world's hospital beds are occupied by patients suffering from water-borne diseases.

Unlikely as it may sound, the mere fact the technology is available has not meant that it will get into poor consumers homes overnight. KX industries is currently looking at in-country production, distribution channels and social marketing, local jobs creation, intellectual property rights and counterfeit filters as key issues that need to be sorted out in the process of getting the filters to end users.

To protect its IPR as well as control quality (and property rights) of the filters, the company has decided that all paper production will be carried out in the US initially. But the company is also open on setting up a factory in India, since that will add more local jobs to the operation. The company realises that dispenser production and the distribution market will represent jobs to locals.

Also, since the filter is a paper, KX has admitted that scamsters could mimic the system to fool unaware customers. The company is looking to packaging as a way out, but has not yet determined which way to go.

The company is learning that penetrating the market is like inventing the wheel because each country has different conditions. The business model for one country may not necessarily hold for another country (ie. Brazil could be different than India). The product requires hardware as well as software so the right fit and building a local team with expertise is key, KX feels.

To get the distribution off the ground will require the creation of new partnerships that do not already exist, says KX. The company is looking to NGOs and local governments for support to accomplish distribution along with education on water borne diseases. It is also open to working with MNCs because MNCs have commercial muscle that get a new operation off the ground much faster than small companies. However, one possible MNC partner India fizzled out however. KX has originally looked to Pepsi for distribution in India but Pepsi already had a bad reputation because their beverages were found contaminated with pesticides.

The company says it is also looking at distribution through supplier credit (like agricultural products) and pharmaceutical channels. Besides those options, KX is interested in taking the help of doctors, students as also trusted religious figureheads to distribute the water filters.

On the question of interest in its low cost filters from bottled water
manufacturers, KX says that the company is not expecting established players as customers of its filters at the moment. But the firm is considering small entrepreneurs to see if that model would be a viable opportunity.

The global water market is a $400 billion strong business with consumption doubling every year. The company expects distribution to begin in India in the end of 2006, but it may be 5 more years before all the pieces come together.

KX Industries began as a partnership between Evan Koslow and Exxon and produced the first household water filters (Pur, Brita, etc.) in the USA. KX has 50 R&D people from 17 countries working together. The firm has a strong technological foundation has taken the OEM approach to marketing its filters in developed countries.

Subramaniam Vincent is with Centre for Sustainable Global Enterprise at the Johnson School of Business, Cornell University. He works on the Base of the Pyramid project.