Good morning, everyone, and welcome to Grupo Rotoplas' AGUA Day 2021. Please note that today's call is being recorded, and all participants are in listen-only mode to prevent background noise. Today's discussion contains forward-looking statements. These statements are based on the environment as we currently see it, and as such, there may be certain risks and uncertainty associated with the following statements. The company has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Today's agenda is as follows. We will start the day with comments from our keynote speaker, Matt Rogers, regarding global sustainability trends, followed by remarks from José Luis Mantecón about Rotoplas' ESG strategy and targets. Next, Mario Romero will give an update on the five-year business plan. Finally, Carlos Rojas will talk about the future of Rotoplas.
We will then close with a Q&A session. I would now like to introduce today's speakers. Matt Rogers is a global energy expert focused on sustainability and the role technology and innovation play in restructuring markets. He recently retired as a senior partner from McKinsey & Company, where he led the sustainability, oil and gas, and electric power practices. From 2009 to 2010, Matt served as the Senior Advisor to the U.S. Secretary of Energy, leading the implementation of the Recovery Act. Matt graduated magna cum laude from Princeton University, and he holds an MBA from Yale University's School of Management. He is a member of the Council on Foreign Relations, the U.S. National Petroleum Council, and serves on the Board of Directors for the United Way of the Bay Area and St. Mary's College Business School.
José Luis Mantecón is Rotoplas' Vice President of Sustainability and Human Capital. He joined the company in 1993 and held the International Operations Director position for a number of years, where he was responsible for the Southeast Mexico and Latin America expansion. In addition, as Vice President of Sustainability, he leads the execution of our ESG strategy. Before joining Rotoplas, José Luis founded several companies in the construction sector. José Luis holds a Bachelor's in Business Administration from Saint Michael's College in the U.S. and a Postgraduate Executive Degree in Marketing from Anáhuac University. Mario Romero is the Chief Financial Officer and member of the Board of Grupo Rotoplas.
He has long been recognized by his innovative approach and execution skills in his professional practice, having led a wide range of projects, including a transformation program, strategy design and delivery, various cross-border M&A transactions, Rotoplas initial public offering, and the issuance of the first Latin American sustainability bond. He is an advocate for sustainable investments and serves on the following advisory councils and boards. The CCFC, Consejo Consultivo de Finanzas Climáticas, LAGreen, Latin American Green Bond Fund with Germany, B37, a technology VC fund in Silicon Valley, Narwhal Investments for food, water, and wellness, a private equity fund in Mexico, HJB (chemical business), and actively participates in FUNED, a not-for-profit organization that offers Mexican students financial support to pursue graduate studies overseas. He had been awarded multiple times by Institutional Investor, including Best CFO and ESG Metrics.
Mario holds a bachelor's degree in economics from the Instituto Tecnológico Autónomo de México, ITAM, and a graduate certificate in business administration from Harvard University. Carlos Rojas Aboumrad is the Chief Executive Officer and board member of Grupo Rotoplas. Carlos joined the company in 2014, and since, he has held various positions. He was part of the international expansion and responsible for driving forward the innovation and development department. Before being appointed as CEO, he was the Vice President of Services. Carlos holds an undergraduate degree in industrial engineering from the Instituto Tecnológico de Estudios Superiores de Monterrey, TEC, and an MBA from Babson College. We would like to take this opportunity to thank all our speakers for their contributions today and hope you all find the following discussions both insightful and valuable.
I would now like to hand the mic over to Matt Rogers to kick things off with his keynote speech.
Thank you for that introduction, and good morning. If you can flip to the first chart, the core message for today is that the race to sustainability on a global basis is accelerating, and there's some good news in the market today that we can build on as we look forward. The first piece of good news is that the global economy continues to grow quite rapidly, and the resource intensity of global economic growth has slowed markedly over the last 20 years. We can now grow GDP at something like 3% or 4% a year on a global basis, but we only need to grow resource intensity by 1% or 2% a year at the same time to continue global economic growth. That's because we're getting older.
We have a more service-oriented economy, and the innovations that are coming allow us to be dramatically more efficient in our use of all resources, energy resources, water resources, mineral resources. That ability to grow efficiently is a core capability to make the global economy more sustainable over time. The second broad theme is the rate of technological innovation has been accelerating quite markedly over the last 20 years. I wrote a book in 2014 where we argued that this was in fact the most exciting time in the last 100 years. What we're seeing is that smaller, more modular technologies that are digitally enabled are taking share from the mega projects that dominated the 20 years prior.
That ability to digitally enable and scale quickly a set of these smaller technologies really increases the sustainability of the global economy quite considerably. There are expanding regulatory pushes for sustainability as well. Whether that's a renewable portfolio standard for energy or whether it's a ending once-through cooling for power plants, the requirements for innovation in order to meet those regulatory standards continues to grow. Part of this, an important part of this, is that customers are looking for more sustainable products. When a large a retailer like Walmart says to their suppliers that they want cleaner supply, whether it's from a carbon intensity standpoint or a water intensity standpoint, the response from the supply chain is quite strong.
The reason that those retailers make that commitment is because they have a set of customers who are looking for more sustainable products. This push for sustainability from the customer base ends up driving a lot of the investment in the market today. If we talk about investment, we have to recognize that something like 20% of the funds under management on a global basis today have an ESG label on it. On current course, we're headed to 50% of the funds under management globally having some sort of ESG label by 2025. This is moving very, very rapidly. That reallocation of capital to sustainable businesses and to sustainable technologies is core to the acceleration that we're talking about today.
If you flip the chart, what we see in the core fundamentals are driving in the direction of some of the technologies we'll talk about today. There is increasing demand for some high water intensity production methods across industry groups. In oil and gas, fracking is a simple 1.5 million gal per well. Lithium mining is another one where you're seeing a growth, something like 10x over the next decade, very water intensive. Biofuels, meat substitutes, all of these are requiring significant amounts of high quality water, and there are real questions about where that water is going to come from.
There's increasing concerns about the climate change impacts on water, increasing drought frequency, big questions about water infrastructure when storms come in, and then water issues causing conflicts, often across from the residential consumer to the industrial consumer, to the agricultural consumer. Where I live in California, this conflict is real every day. There's a broad regulatory push for higher water quality. The U.S. Infrastructure Bill puts an unprecedented amount of money into redoing the United States infrastructure for water. Pushes like eliminating once-through cooling, driving down effluent allowances, is driving industrial and technology companies to rethink how they manage water throughout their processes from end to end. It no longer is just a once-through.
It's a how do I manage this precious resource on a continuous basis. One of the most exciting stories overall in sustainability is this question about green hydrogen and where's hydrogen gonna come from and the drive to take hydrogen costs down to $1 a kg because of what that does in terms of unlocking many other parts of the energy equation, but it all depends very heavily on water. Something like 20-24 kilograms per kilogram of hydrogen we need of water. Where the hydrogen and the green hydrogen can come from isn't usually the places where there's an abundance of water. How that water system gets managed in hydrogen is one of the core questions for scaling this core technology.
An exciting part as we look forward are a set of regions that are now saying, "How do we create sustainability hubs?" There was a piece that, you know, Houston is trying to become a sustainability hub that integrates things like hydrogen, things like carbon capture, and integrates the water supply in that system in order to minimize the requirements and maximize the quality as you work through there. That is being repeated around the world. The opportunities to support those kind of hub developments both drive down the cost and increase the efficiency of those projects. Hopefully, this is an exciting story about where sustainability is going and how important it is to begin to scale some of these technologies across the next several years. With that, I'll transfer it over to José Luis.
Thank you, Matt. Good morning, everybody. Thank you for being here, and thank you very much for your presentation, Matt. It is always very important to hear about the latest trends shaping sustainability efforts as they are an integral part of our DNA. Rotoplas is and has always been committed to improving people's lives by providing them with more and better water. In fact, as some of you may remember, in the previous AGUA Day, I talked about what we achieved with our 2020 sustainability strategy as we announce our new strategy for 2025, which is a key component of our sustainable growth plan. In order to develop a new strategy, we updated our materiality analysis. We also relied on methodologies such as GRI, SASB, TCFD, and others, integrating a diverse array of approaches into our analysis.
This allow us to identify the existing synergies between the material and emerging issues. Based on them, we define the pillars and actions for the new strategy, which is focused in three dimensions: people, profits, and planet. Each of these dimension is divided into two pillars and is associated with an ESG component. The planet dimension comprises two pillars. First, circularity and climate change, and second, water availability. The pillars for the people dimensions are improving the quality of life of the people who use our solutions and promoting and developing our team members' talents. Finally, for the profit dimension, the pillars are corporate governance and ethics and ensuring access to our solutions and the benefits they provide.
In addition to these dimensions, our sustainability strategy also focuses on other key issues such as climate change, extending our collaboration with the value chain, maximizing our contribution to the Sustainable Development Goals, and creating 360-degree value. Sustainability strategy is already delivering concrete measurable results in all ESG dimensions. Regarding environmental issues, for example, this year, we increased the use of recycled resins by 20%, launching new solutions with recycled content that have the same quality as those made with virgin resins. Likewise, the growth of bebbia translates directly into more than 300 million liters of purified water without plastic bottles. We also started an initiative that will reduce the use of gas in our production processes.
Furthermore, we undertook the CDP evaluation for the second year in a row, obtaining a B grade for performance regarding climate change, and we joined the Climate Ambition Accelerator. As for social, regarding the current pandemic, we continue to focus on the well-being of our team members, both by applying the strict safety measures in our manufacturing plants and through remote work schemes for administrative staff in order to protect them and their families. Also, we registered improvements in both the employee engagement survey and the organizational health index. The employee engagement went from 79% to 80%, and the organizational health index went from 68 to 72. A great improvement considering these challenging times. We also continue to be committed to diversity in all its forms.
We redesign our diversity and inclusion policy, and we launch initiatives on gender, disability, and sexual identity, including dialogue sessions with the staff and company-wide talks. We also subscribe to the United Nations Women's Empowerment Principles, which provides a clear guide for businesses to promote gender equality. More specifically, we have leveraged our remote and flexible working capabilities to reach a more diverse talent pool. As a result, we have hired more than 300 new female collaborators and 20% of our STEM positions are held by women. We have also recruited from a wider pool of nationalities. 9% belong to ethnic groups. The percentage of self-identified LGBT+ collaborators rose to 5%, and the percentage of people with disabilities in the United States increased to 2%. Finally, I think it's worth highlighting some of our governance results.
For starters, we have incorporated sustainability metrics as well as impact measurements in the allocation of CapEx. In the context of the innovation and execution discipline of Flow, this is a very significant step to ensuring that all new initiatives contribute to our sustainable growth story. This is supported by an awards program for initiatives that have ESG impact. We have also increased the number of independent board members, and we have certified a group of internal auditors for our integrated management system, strengthening our corporate governance. Last but not least, we continue working with standard evaluators. We have improved our ESG scores in the corporate sustainability assessment of S&P Global and our MSCI ESG rating.
This is also the third year we have incorporated the recommendations of the TCFD, and we have now become a supporter, cementing our commitment to providing transparent and reliable climate-related financial information. What's next? As in the case of our growth and profitability objectives, we have set specific and ambitious ESG targets for our company towards 2025 in each of the three dimensions previously outlined. First, the profit dimension. In terms of our corporate governance, by 2025, we aim to evaluate 100% of our suppliers with ESG criteria. Also, regarding the access to our solutions, we are targeting a compound Net Promoter Score of 80 points for products and services.
With regards to the people dimension, improving the quality of life of our users, we have set the target of impacting one million people with products and services that improve sanitation and access to water, including drinking water solutions. In the second pillar, promoting talent, we are set to increase to 30% the percentage of women in our workforce by 2025. Finally, for the circularity and climate change pillar of the planet dimension, we will reduce the intensity of Scope 1 and 2 CO2 emissions from 0.51-0.41, and we have set the target to achieve carbon neutrality by 2040. As to the second pillar, access to water, we will increase the number of liters purified by our solutions to more than 1.7 million cubic meters.
It is an honor, it has been an honor sharing our progress and vision for the coming years. It is a challenging path, but every single team member of our company is ready to be part of our sustainable growth story. Help us build a better future for us and future generation. Now, before Mario tells us about the progress of our growth plan, we will hear the strategy that each country where we operate will follow to sustain Rotoplas' evolution. You will hear the strategy from each regional manager responsible for specific geographical areas. Please play the video.
Hello, I'm Carlos de la Cruz, and I oversee the Mexico and Central America operations. In Mexico, we will first continue to grow the current product portfolio by launching new solutions and developing new sales channels while expanding existing ones. Second, our sales force effectiveness and plumber loyalty plans should help us maintain industry leadership and customer loyalty. Additionally, we will continue to adopt new manufacturing technologies to reduce water and energy consumption. Finally, our third approach is to develop e-commerce solutions throughout the country for our products platform, through our distributors, and for services like bebbia and Sytesa by integrating data and analytics to improve our clients' experience. In the case of Central America, we will continue to develop the water flow business with products exported from Mexico.
We will also add new solutions to complement our product portfolio while exploring new sales channels, as well as focusing on initiatives that will help us boost sales, such as sales force effectiveness and loyalty programs for plumbers. With the recent opening of the manufacturing plant in Nicaragua, we will achieve our expansion into the southern corner of Central America. We will also be focused on maintaining the trust of our distributors and customers to preserve our position as the leading supplier of storage solutions throughout the region.
Hello, my name is Pablo Feresini. I'm the Managing Director for the operation in Argentina. Our focus for the coming years will be to further consolidate our leadership in the country across our three businesses: water storage, Flow, and improvement, while continuing to drive the growth of our export platform. To achieve the targeted growth, we will leverage our sales for excellence initiatives, including pricing and cross-selling. We will continue to promote our commercial strategy that increases margin and, most importantly, maintaining our operations sustainable in terms of cash flow. Thank you very much for trusting in us.
Hello and buenos días. I'm Chris Cameron, the Business Unit Director of Acuantia in the United States. Over the next few years, we are focusing on creating brand awareness and increased market share for Acuantia and our value proposition. We will continue to bring new products and services to the market in a more agile way that meets our customers' needs while continuing to adapt ourselves to changes in the retail market. In addition, we will continue our aggressive omni-channel strategy that uses our stores and new points of presence as significant drivers of customer satisfaction and delivery of products and services. Lastly, our third lever to serve the market will be the delivery of our ongoing digital platform enhancements that surprise and delight our customers in both their shopping experience and after-sale support.
Hello, I am Alfonso Vazquez, and I oversee business in Peru. The top three priorities our operations are. The first is to continue with our diversification plan to maintain leaderships in the storage category, consolidate the water heater business, and development of the water flow unit by triggering synergies with the Argentina piping business. The second priority is to focus on each category geographic expansion by developing new sales channels and by launching new solutions. The third priority is to develop a service platform that solves pain points while meeting all aspects of the sustainability strategy.
Hi, I'm Cristiano Ruiz, and I oversee the operations in Brazil. In here, our attention will be focused on expansion of the water treatment and recycling plants business. We will continue integrating competitive and innovative technologies in accordance with local legal requirements, including the offering of an automated 24/7 monitoring system. Our clients are counting on us and our water cycle expertise to help them achieve water savings, self-sufficient water cycles, and compliance with their ESG goals.
Good morning, everybody. It is great to have you all here. Thanks to all of our country managers for sharing. As José Luis has already discussed our ESG targets, and we have heard from our regional managers about the key priorities in each of our markets. I would now like to talk to you about where we stand with regards to our 2025 goals and the status of our transformational program Flow. First, let me take a few minutes to talk about the trends and challenges we registered during 2021, including, most importantly, the big supply crunch. 2021 marked the beginning of global recovery, with economies reopening and demand reactivating.
However, it has also highlighted the vulnerability of global supply chains as the big supply crunch of 2021 curtailed output and affected margins across a wide variety of industries, forcing companies in all sorts of industries to change and adapt so they could ensure their customers get the products they need. Of course, we were not an exception. We faced increased raw materials and logistics costs throughout the year as a result of these disruptions. Since the beginning of the second quarter, we developed a strategy that leverages our internal strengths and which allows us to both gain market share and maintain an order fulfillment rate above 99% while maintaining our sales and EBITDA growth targets for 2025.
That is to say, even though the big crunch compressed our margins, we were still able to serve our customers and gain new ones while staying on course with our long-term goals. How did we do it? For starters, we rely on our strong balance sheet and increase our working capital to ensure that we could have the necessary raw materials to fulfill orders at all times. We adopted different pricing strategies throughout the year to increase our market share and eventually ensure we can meet our sustainable growth path towards 2025. All of this, of course, taking advantage of the new efficiencies and innovation that we have introduced in the past two years throughout our transformational program Flow, and which I will talk about in further detail later.
Let me do a brief recap on how the crunch played out for Rotoplas and how we adjusted to it. During the first quarter, we start seeing the reactivation of global demand, as well as shifts in the market patterns. We also detected signs of a tight supply chain and the effects of the Texan energy crisis. At the time, we implemented price increases aligned with inflation rates in each market and in line with our annual budget. By the second quarter, however, the big crunch has started, and with it, significant increases in raw materials, prices, and logistic costs happened. At the time, we decided to absorb some of these costs to increase our market share, which resulted in double-digit sales growth and strengthening of our leadership position. This strategy has an estimated negative impact on our EBITDA of about MXN 130 million for the quarter.
That said, we estimate that our expanded market share will increase our annual growth rate by about 5%. This will generate a long-term value almost 5 times greater than the absorbed cost. External factors I mentioned before continued in the third quarter, so we decided it was time to adjust our pricing strategy. During this quarter, we increased our prices across all of the markets where we operate to offset some of the impact on our margins and EBITDA. During the first nine months, we were able to offset 34% of the effect of higher input costs, which had an estimated net impact on EBITDA of a negative MXN 340 million. We are now focused on bringing our margins back to previous levels to normalize them, if you will, by the second half of next year.
To do so, we will continue to leverage the leadership position of our brands across our markets. We will also continue to adjust our pricing strategies as necessary, and we will continue to manage our working capital to guarantee that we have enough raw materials to meet the demand for our solutions and to continue growing at an accelerated pace. We expect that our working capital will also be normalized by second semester of 2022, when it should amount to about 17% of sales. This strategy will ensure sustainable growth while continuing to guarantee the level of service, availability, and quality that our customers and business partner expect from us. Now, as some of you may remember, our 2025 objective is to double our 2020 sales and achieve an adjusted EBITDA margin equal to or above 20%.
This means sales above MXN 17 billion and close to MXN 3.5 billion in EBITDA. As I mentioned, this goal remains firmly in place, but we have made some adjustment to our growth expectation for some of our markets to account for the dynamics we have observed this year. The adjustments we made to our sales and EBITDA growth expectations are linked to macro dynamics, the water situation in each country, and the global warming impact, which translates into meteorological phenomena, water shortages, and poor water quality. We have also incorporated adjustments aligned with our capital allocation strategy and the launching of new solutions or sales channels. The table below, you can see what we presented last year on the left side and the adjustments on the right side. The updated considers a four-year compound annual growth rate.
As you can see in the slide, we now expect faster growth in Mexico and Argentina with a slightly slower growth in Central America and Peru that are in the others line. This means that by 2025, Mexico will represent 60% of our total sales, whereas Argentina and the United States will each comprise about 15%. The U.S. operation and services platform expected growth pace remaining the same. Group-wide EBITDA CAGR increased a little as the margin compression affected our 2021 numbers, and the base is lower. 2025 estimates do not change at all. We are also now expecting that our solutions breakdown by 2025 will change slightly from what we have discussed here last year, with products representing 90% of our revenue and services 10%, as we have seen a strong traction on our products portfolio.
We still believe, however, that there will be a strong recovery in the demand for services, a market in which we have a well-differentiated sustainable database value proposition and which is benefiting from new tailwinds, such as the changes in the regulatory framework for water treatment in Mexico. In any event, we continue to expect an average annual CapEx of 5% of total sales, with 1.5% for maintenance and 3.5%-5% focused on growth and strategic development. We continue to look for investment opportunities that can strengthen our solutions portfolio and help us accelerate our innovation with a particular emphasis on the North American markets. This is the case, for example, of our recent investment in Banyan Water, which will help enhance our digital and analytics capabilities towards water digitalization and which Charlie will discuss in further detail.
Also, it is important to consider that government sales will remain under 10% of total revenues, and the expense recognition associated with the implementation of Flow will end in this quarter, as we forecasted last year. How are we going to achieve these goals? First, we will continue to rely on the external, but most important on an internal sustainable growth drivers we have talked about in the past and all the capabilities we developed during our transformation. Despite the disruption that the world has experienced in the past two years, we continue to see very favorable macro trends for our industry and for our solutions offerings. The demand for smarter, decentralized water solutions is poised to grow due to water scarcity and by climate change.
The simple fact is that the only way to sustainably meet the demand for quality water as our societies continue to grow and consumer habits continue to change is through innovative water solutions across the board. Solutions that will enable people and companies to make the most efficient use of water and reduce their footprint. Now, let's move on to Flow progress. For those of you who are new, Flow is our organizational transformation program that started in 2019. Now, this program has become an essential part of our day-to-day, and now more than a program, it is part of our culture and the way we operate. It works through value-creating initiatives and is supported by control bodies that help ensure that the initiatives are carried out and perform well. Let me briefly recap some of the Flow achievements.
Out of a total of 1,100 initiatives, 250 are now in the money step. Remember that the initiatives go through five stages from the idea creation to the money step, where their impact is reflected in the P&L. In the nine months of 2021, 45% of EBITDA comes from initiatives with the Flow program. We have deployed MXN 188 million of CapEx related to these initiatives. In the 26 months since August 2019 that we have been operating under this new scheme, more than 740 employees have been directly involved as initiative or milestone owners.
This year, we have managed to de-risk initiatives by sectioning major initiatives with minor ones, testing their performance in an aisle minor while correcting failures in a timely basis, which has led to an increase in the success rate of the initiative execution from 60%-65% in the last year. In the coming years, we will focus on executing those initiatives that have not yet reached profitability. Thinking of Flow as an ongoing process, each year we will continue with sessions for new initiatives and thus keep up the pace of innovation and renovation. It is very important to mention that after 18 months, this will be the last quarter in which we will recognize those implementation costs and adjust our EBITDA to account for them. However, even though we have been recognizing expenses for 18 months, the program's benefits will be fully realized in a five-year period.
About Rotoplas valuation. The following table shows the current Rotoplas multiples compared to other players in the water industry. These companies are focused on different businesses and geographies in which Rotoplas participates, but we believe they can be useful as benchmarks. On average, Rotoplas's pace of growth in both sales and EBITDA is higher than the peers, and valuation is at a discount of about 50%. The average target price assigned to us by our analysts is MXN 43 per share, meaning there's a potential 60% upside. By the way, last week, BTG Pactual initiated coverage of AGUA with a buy recommendation. For the past two years, we have sought to reward our investors' loyalty through capital reimbursement in cash and in kind, maintaining a yield of over 7% for each year.
We intend to continue this practice using between 30%-50% of the free cash flow to equity as shareholders return, apart from capital appreciation. To conclude, as you have heard, Rotoplas offers investors a great growth and consolidation story in the water solutions industry that is every day more relevant and important to society. Further, Rotoplas is a transformational story by successfully becoming a sustainable company that creates 360-degree value with a conscious capitalism approach. Thank you very much for your time. I look forward to your questions. Now let me transfer to Charlie. Thank you.
Good morning, everybody. It is great to have you all here for this year's AGUA Day. We're very happy that you have taken the time to join us and hear about what our team and our company have been able to accomplish and been up to, and our perspectives for the future. We greatly appreciate this opportunity to reach out and hear your perspectives and thoughts. Matt, José Luis, and Mario touched on many of the core components of our vision, not only for our company, but also for the future of the water industry, and to some extent, of water itself. As I pointed out last year in the same forum, Rotoplas aims to provide the best and most innovative water solutions to promote the well-being of all our stakeholders and sustain double-digit growth while creating economic value.
We understand the water challenges our societies are facing and are continuously assessing how to best tackle them, always from the 360-degree perspective, focusing on people, planet and profits. A year ago, I outlined our strategies and guidelines towards our 2025 goals, some of which Mario had already mentioned earlier, namely we aim to duplicate sales from 2020, reach an EBITDA margin of 20% or higher, maintain our debt to EBITDA ratio below 2x, and ensure a return on invested capital of around 20% above our cost of capital.
In order to achieve these goals, we have focused on the evolution of our organizational culture as established by Flow, including a relentless pace of innovation and disciplined levels of execution, as well as a deeper and more comprehensive focus on the best ESG principles and practices. We're also leveraging, as Mario mentioned, macro trends that have a direct and positive impact on the water industry, and which have proven to be both boost and a welcome challenge for us. Over the past months, we have launched new products and sales channels, and strengthened our synergistic cross-selling and business strategies and highlighted two promising growth avenues, the United States market and our water-as-a-service platform. Through these actions, we have managed to continue to grow sustainably. All of this, as they say, is just the beginning.
I would therefore like to take advantage of this opportunity not only to talk about some of the key aspects of what we have achieved, but also, and perhaps more importantly, to talk about the next steps of our evolution. Let me start with the launch of new solutions and sales channels, which are very concrete examples of our innovation drive. Since the start of Flow, we have launched 20 new solutions that address specific needs across our markets, such as dual tank, Tuboplus UltraFlex pipes related to water flow, and water softeners related to improvement. Every new solution we launch aims to tackle different water-related problems in different regions, while continuously focusing on our portfolio expansion strategy. We have also developed 13 new sales channels, which bring us closer to customers and improve their experience as well, as of course, as strengthening our brand across markets.
These new channels showcase our focus on leveraging technology to improve the customer experience. The launch of these new solutions and channels brings us closer to our 2025 objectives. We still have more than 50 initiatives in the pipeline, all related to further launches and product upgrades, with an estimated sales and EBITDA run rate of MXN 1.7 billion and MXN 0.5 billion respectively. We are not only providing new solutions through new sales channels, but we are strengthening our cross-selling strategies and continuing to leverage the synergies between our businesses. As a result, Tubop lus, our Mexican water pipe business, is available now in Central America and Acuantia, our water treatment business, has officially launched in Brazil. Going forward, we expect to take advantage of more opportunities like this. Speaking of Acuantia, I would like to share really exciting news.
After many months of hard work, today we're officially launching Acuantia in the United States. The new Acuantia will merge our e-commerce operations in the United States with our septic systems business in that country, enabling us to deploy additional resources in a key high growth potential market. Through Acuantia, we will provide a better user experience and deliver end-to-end solutions to solve current needs. Nowadays, there are many challenges in septic and e-commerce businesses, and our main objective is to provide an optimal solution. For example, this means increasing the available water for households, turning one gallon of water into three gallons through circularity suitable for different sorts of uses before returning it to the environment, as you can see in this slide.
After gathering potable water from different potential sources, the gray water is filtered for reuse and the black water is treated, and eventually it is all given a final use before it is returned to nature. We have high hopes for the future of Acuantia, as it combines the strength of our operations in the United States with a clear value proposition for our customers, helping our customers reduce their water footprint. It is also the case of our water treatment operations. Even though the pandemic has limited the growth of our water treatment plant business, we have continued to work on introducing more efficient technology and processes to ensure that our clients are able to make the best use of water. Let me give you a few examples of our plants in our portfolio.
An automotive industry plant has become a zero liquid discharge facility through employing 10 different processes and technologies, reusing 100% of the water for the industrial process and other uses. A mine facility is also zero liquid discharge, using 5 processes and technologies to recover and treat 1,000 cubic meters per day and safely discharge them to the environment, contributing to the recovery of a nearby lagoon. A mining operation that consumes 250 cubic meters of water per day is now able to use desalinated water for its processes and other uses. Finally, and perhaps more interestingly, a beverage company, one of the most water-intensive industrial activities in the world, in which water is both a key component and final product, and essential to its production.
In this particular case, the water is not only treated to ensure compliance with environmental regulations, but it is also actually being reused in the production process. These are just four examples of how water treatment solutions have a real positive impact on our customers' water use, which is why we will continue to invest in growing and innovating in this business. Our focus on innovation and improvement of our water customers' experience is also exemplified in our drinking water platform, bebbia. Over the past few months, we fully automated the signing process through our website while adding a door-to-door sales channel and training new sales representatives. We also introduced online maintenance and communication via instant messaging, making it faster and more convenient for our customers to keep their systems up to date.
We have invested over MXN 100 million in bebbia over the past two years, so we can sustain accelerated growth and expand the platform. As a result of this, another initiative is we aim to reach around 350,000 users by 2025, turning bebbia into the leading provider of drinking water as a service in the country. All in all, this year we have been able to leverage our strengths, innovate, and pursue the growth avenues we identified, and we will continue to do so in the coming years. We will execute on Flow initiatives and focus on priority businesses like the U.S. and bebbia, applying our agile methodology. We will also continue focusing on the customers, delivering accelerated and scalable value creation, and empowering and developing talent.
Agile is now being implemented in bebbia and Acuantia septic systems businesses, helping to improve our understanding of our customers and stakeholders and accelerating the development of new solutions, all through multifunctional teams that set ambitious, results-driven goals. Eventually, we expect that the methodology will be applied across other businesses, strengthening our capacity to evolve and take advantage of new opportunities. In line with our goal to design the Rotoplas of the future, maintain high growth while promoting the best ESG practices to help water conservation, we recently acquired a minority stake in Banyan Water, a tech company in the United States that uses data and analytics to provide water-saving services and metrics to its clients since 2011. As part of the agreement, Banyan Water and Rotoplas will develop a joint innovation program that will greatly bolster our next generation of solutions.
In line with our market leadership strategy, Rotoplas will have exclusivity in commercializing water management software and digital solutions in Latin America. With this, we move a step closer to water digitalization. What does water digitalization mean? Well, at its core, it means a data-driven approach to ensure the best use of water across industries and households. It's modern use of water through data-derived insights and metrics that can help improve water consumption patterns and processes, and one that can be scaled for massive consumption. It is, in other words, a strategy to develop a fully integrated water solution ecosystem that relies on data and analytics to ensure the most efficient use of water so that we can protect this precious resource. Like many other aspects of our lives, smarter services and data analysis can provide new opportunities and tools to improve our relationship with water.
This means, for example, building new digital solutions for leak detection, rate tracking, usage projections, scheduling, flow anomaly detection, alerts, valve control, et cetera. It also means, crucially, for us to move from a conventional approach to products and services to becoming a data-driven solutions provider, strengthening and deepening our use of technology across all our operations, both client-facing and back office. Before we go to the Q&A section and have a chance to hear from you, I would just like to reiterate what José Luis and Mario remarked, and I have mentioned myself. Our commitment to ESG best principles and practices is unwavering and strengthens as we move forward. Every strategy and initiative we implement aims to create value and to contribute to the well-being of our stakeholders.
In short, we seek to ensure that our evolution is a sustainable growth story, providing cutting-edge solutions that improve human relationships with water. Moreover, we have defined two targets we consider key aspects of ESG. Firstly, we're committed to being net zero emissions company by 2040. Second, we will increase the percentage of women in our workforce from the current 23% to 30% by 2025. Thank you very much again for your time. We look forward to your questions, and thank you for being a part of our sustainable growth story. But before we open the floor for questions, we have another poll for you.
That's right, Carlos. A poll will come up on your screen with the question: Which of the following do you think is the biggest driver for the demand of water solutions in the Americas? Please select one of the following options: Water scarcity and poor water quality, lack of sanitation, population growth, climate change and natural disasters, or government regulations. One more moment, please, to find the most popular answer. Once again, for everybody on the line, the question is: Which of the following do you think is the biggest driver for the demand of water solutions in the Americas?
Thank you for answering.
All right, the poll is now closed. The most popular answer was A, water scarcity and poor water quality. Thank you all for answering. We will now conduct a Q&A session. If you would like to ask a question, please press the Q&A button located at the bottom of your computer screen and type your question as well as your full name and the name of your company. We will now pause for questions.
By the way, very interesting to see that government regulations was the least popular answer, and I'm happy to see that what's really driving this is not government regulation and that it's the general population's conviction for needing to do this.
Thank you. Our first question comes from Marimar Torreblanca from Miranda ESG. Will Rotoplas establish science-based targets?
Oh, thank you for your question. Yes. As the SBTi methodology is robust, the process for establishing these targets requires many reviews. As we are committing to become carbon neutral by 2040, this will be a key initiative to achieve this result. Thank you.
Thank you. Our second question comes from Miguel Medina from ArmanexT. One financial question. What is the exchange rate assumption underpinning the contributions from Argentina to sales and EBITDA going forward? Do you need to repatriate cash flow from Argentina to the parent company, or are you happy to deploy and redeploy cash generated in Argentina in new investments in Argentina?
Mario, if you'd like to.
Well, thanks for joining us this morning, Miguel, and well, to your first part of the question is, the way we project Argentina and the exchange rate is through inflation differential rates. There's the inflation differential rate from Mexico to the U.S., and then that's where we project our FX. Then there's an inflation differential from Argentina to Mexico. That's the way we project exchange rates and the Argentina contribution for Mexican pesos. To your second question, there is no need to repatriate cash flow from Argentina to Mexico, but there's also no need to send cash from Mexico to Argentina.
The way we manage is first to have Argentina in a sustainable cash position, and then with the excess cash, then the decision is shall we redeploy the cash if there is a interesting growth opportunity in Argentina? If not, then repatriate that to Mexico. That's the way we discuss and manage our Argentina operation.
Thank you. Our next question comes from Liliana de León from GBM. What are the main reasons for reducing service contribution in the long term? Could you please give us more color on that?
To start, Liliana, to be very honest with you, our goals for 2025 are goals that are set on initiatives with which we are very comfortable with in terms of the certainty of the results that will be delivered. In terms of where we have the highest level of certainty, they're related to products. These goals do not include the full potential for Rotoplas. We do see services growing in a very aggressive rate to conserve that contribution level and to be around the 10% contribution level. It could very well be much higher than that, not necessarily by 2025, maybe by 2025 or maybe just a little bit after that.
In services, we have higher levels of uncertainty as there are new businesses that are not only new to Rotoplas, but they're new to the market. We're disrupting the way water is consumed with these services. We have very high expectations for services, but they have also higher levels of uncertainty. It's not that we do not feel very enthusiastic about it. We are very enthusiastic about it, and we're being very aggressive in our efforts in developing these businesses. Hopefully it will be above that. Mario, anything to complement?
Yeah, sure, Charlie. May I comment? The other thing is, through the pandemic, as you know, services was the most hit in Rotoplas, for a couple of years. On the other hand, we found different venues for the growth of our product segment. That delay is also affecting why the mix by 2025 changes.
Thank you. Our next question comes from Martín Lara from Miranda Global Research. Good morning. I have two questions. When do you expect the supply chain disruptions to improve? The second question is, where do you see your EBITDA margins in the next few quarters? Do you expect an improvement compared to the third quarter of 2021?
Well, there's three questions in one. I like this. Well, to the first one, you know, we're starting to see a more stable environment on supply chain management, and raw materials are now stabilizing, starting to grow.
I think a couple of weeks ago came the Bloomberg Commodity Index and you started to see that drop. We believe that's normalizing. Then again, Omicron shows up and volatility starts to surge. We're still like in an in-and-out volatility marketplace, but not as in the second quarter or third quarter. I think surprises on the ups for cost. I think there's gonna be less, and it's gonna be the same levels or better off in the coming months. As for margin, as I mentioned, we're starting to see. We believe we're gonna be seeing margin normalization by the second half of 2022.
We are still in the process of catching up on pricing, so we can return to those margins. On the third one, it's for sure. You know, the third quarter was the worst margin-wise quarter, and we'll see an improvement going into the fourth quarter, that's for sure.
Great. Thanks, Mario. We have another question coming from Mariana Cruz from BTG Pactual. Hello, everyone. Very interesting presentation. Can you please elaborate more on the sustainability metrics that AGUA uses for capital allocation according to the ESG strategy mentioned in the first section of the presentation?
Thank you, Mariana.
Do you wanna take a first stab at it? I think we'll have something to say.
All right. Thank you, Mariana. Well, it depends on the four-
José Luis, you're on mute. You muted yourself.
I'm sorry. Well, thank you, Mariana. Depends on the purpose of the initiative. Not all CapEx initiatives have the same ESG levels. I would tell you that, for example, in environmental, we would use greenhouse emissions, Scope 1, 2, 3, water efficiency, circular economy, waste management. Regarding the social, employee safety, employee training. On governance, we will go for customer satisfaction measurements. I don't know if Charlie and Mario want to. Mario?
Yes. Thanks for joining us this morning, Mariana. You know, the way we operate, what José Luis just mentioned is every week, we have a CapEx review where initiative owners present their CapEx needed to make his initiative happen. This initiative owner, that can be from a different area, country, and a different project, he needs to present the project using the economic value that that project is gonna deliver, but also the sustainability value that the project is going to deliver. We are being as precise and on metrics as economic, let's say margins, IRR, and so on, for also the sustainability perspective.
The sustainable team grabs all that data coming from those CapEx deployed to build their metrics, as well the financial team, we pull those metrics to account for those, the financial performance. That's the way we're operating, and we do that on a weekly basis, when all the projects are presented.
Just one final comment to this is that most of our capital allocation is allocated towards where we find the biggest opportunities in business development. These biggest opportunities are really around businesses that create tremendous impact in terms of sustainability, such as water treatment and maybe like I mentioned. We see tremendous opportunity in transforming the way people drink water, going from bottled water to on-site purified water with a water as a service model on a subscription model. That eliminates a lot of waste all the way from driving water around the world to eliminating the bottle altogether. The water treatment, like I mentioned, reducing water saves a lot of energy in pumping water. We allocate our most resources most aggressively in businesses that have tremendous alignment to our ESG strategy.
Great. Thank you. We have a follow-up question from Liliana de León at GBM. What are the opportunities and challenges of a decentralized water system in Mexico? What could be the opportunities for AGUA?
Well, the matter of the fact is that the traditional model of centralized water, the centralized water approach with centralized infrastructure is not sustainable anymore. It's not only that should be the right way to consume water, it'll be the only way to get access to water in some of the cases. For those high consumers of water, such as, you know, sites where you have high density of population or sites where you have manufacturing or industrial processes, which do happen to be taking place in cities such as Mexico City. The most obvious thing would be that you capture rainwater, and that's all of the water that you get from the grid and from rainwater. You treat it all to use it multiple times.
You go towards zero liquid discharge. It's not only the only way to get access to enough water, it'll also be the cheapest way to get water. It's gonna make sense in, you know, from all of the different perspectives to go after the centralized approach, where you take more control over the water that you consume, and you do it in a responsible way. We see tremendous opportunity in the business-to-business approach. Hopefully each household will end up doing the same, will end up taking responsibility for their own water, as solutions allow for that to happen. Any other comments?
If I may add on to your comments, we're seeing a couple of traditional tailwinds. As Matt mentioned during his intervention, regulation is making a push for better water management. If you see the updated NOM-001, it took 25 years to update that regulation in Mexico. If you read that regulation, it's gonna be more stringent on industries, companies, and so on. That's gonna create opportunities for water treatment that is happening at the point of use. I think that's something that we're gonna be seeing in the coming years playing out in Mexico. On the second one, the sustainability footprint in terms of guaranteeing water access for their processes.
It's not only and also Matt mentioned that in part of his presentation, companies needs to secure water for their products and services. As water is becoming more scarce or more variable throughout the year, the companies will need to buy technologies to manage their businesses. Those are the two things we believe, one, regulatory, second, companies being affected by climate change, that will create opportunities for us in Mexico.
Great. Thank you, Mario. Our next question comes from Rodrigo Salazar from AM Advisors. Good morning. Could you expand on how the impressive growth in the U.S. will be achieved in the next four years?
Thank you, Rodrigo. Well, first of all, we did have very interesting growth this year. We are already on the track of high growth rates for the United States. What's very important is the opportunity that we see in the United States. It's a very large market that is servicing traditional needs with very antiquated solutions such as concrete septic tanks. Maybe Matt might have an opinion. Please feel free to comment, Matt. The U.S. has very old infrastructure. It has tremendous challenge because of the population growth and consumer habits where they consume water more and more every day. They're having to renounce to things that they like.
Now we see that happening today, such as having a green lawn in their backyard, where there's not enough water to irrigate your garden anymore. We're seeing tremendous regulation changes in terms of water treatment for reuse for larger buildings or larger consumers of water, in states such as California. Between the water scarcity and the regulation changes, we see tremendous opportunity. Now, the companies that are servicing this in the United States are very small companies. If you look at the very large companies that are servicing water in the United States through the decentralized approach, the big companies, they don't add up to much over 15% of the market share. There's tremendous opportunity for newer designs and better approaches in servicing customers and to end up with a much better user experience. We started already with that business, and we've seen tremendous reception from consumers.
Thanks, Charlie. Anybody else on the panel, or should I step on to the next question?
The only thing I would add is the pressure on corporates to, for example, the tech players in California have all now committed to zero water use campuses. So you have an employee campus of 1,000, or 3,000 or 5,000 people, and you have to find a way to deliver that with zero net draw on the water resources. That becomes. You know, that's a very high bar standard and requires a much more distributed model of technology than historically has been the case. I think the second one is there was a real realization over the last several years about the fact that Charlie talked about it as the antiquity of the U.S. water system.
When it was built in the you know forties and fifties, it was state-of-the-art, but it's showing its age. It's showing its age in whether it's lead issues or other contaminant issues. What that's creating is more customer draw for more innovative and distributed solutions. I can't rely on the central system to deliver the kind of quality that I expect. Consumers are now particularly you know small and medium businesses are saying, "I need a different kind of solution to make that happen." I think you know there's some very strong tailwinds in the U.S. market.
That's very interesting, Matt. Thank you. Our next question comes from Steven Bryce from Ares ESG Partners. He has a question about the bebbia outlook, 350K households by 2025. Should we view those figures as just the start of the bebbia business? Why not be more aggressive with the outlook? Is this due to competition or driving user uptake?
Thank you very much for your questions, Steven. Well, yeah, I would definitely look at it as the start of bebbia. It does takes quite a bit transforming consumer habits. Mexico, where this business is currently operating, indeed we have such a big habit on consuming bottled water for such a long time. Mexico is one of the top countries in terms of bottled water consumption per capita, and also consumption as a total country. Changing that habit takes a little bit of time. It is a business that does grows in an exponential rate, and to get to 350,000, we would be growing at very aggressive rates.
It wouldn't mean that the next year after that one, those 350,000 couldn't look like 500,000 and getting to a million very quickly, just a few years after that. We are expecting this business to grow very aggressively beyond 2025. Hopefully we'll beat these numbers by 2025. But like I mentioned, it's a newer business to us, and it's not only new to us, it's new to the market, so there's higher uncertainty on that. We just wanna make sure that we commit to not to goals that we will definitely deliver on.
Thank you. Our next question comes from Camilo Hernández from Solhidrica. What types of companies is Rotoplas seeking to make M&A with in the future to complement your technology offer?
Mario, do you wanna take that one as you're responsible for the
Well, yes. We are mainly focused in North America, and what we're trying to achieve with an M&A strategy is to find businesses that complement within our water strategy, either in products, services, or in some form the water digitalization that serves to both segments. That's our main focus. The market is still very fragmented in the U.S., Canada, and Mexico. I think putting together a combination of businesses can create an interesting overall strategy, you know, for M&A.
Just to complement. In terms of our strategy, I believe there is almost enough technology to solve for most of the world's water problems. The thing is implementing those solutions. Hopefully, better technology will make this easier. I think that the biggest opportunity is in the digital technologies that offer better capabilities to connect existing solutions with existing needs. Rotoplas' approach is more of a platform approach, where we are that company that has access to all of these capabilities and to all of these customers. Rotoplas is the one that connects the supply and the demand side in a more successful way. That's the way we see it. For that, there's a lot of opportunity in terms of digital technologies to make that happen. That's where we're focusing a lot of our resources in.
Thank you. Our next question comes from Michael Burkle from Zenon Investments. He would like to know in which business area, product or which products and services you currently see areas as, like, the strongest, that there is more demand you could fulfill but face bottlenecks. What are the bottlenecks, and how do you intend to tackle them?
In terms of bottlenecks in servicing customers, I think maybe you have a better understanding of the question, Maribel, but I think that the biggest opportunity is water scarcity and servicing both that water scarcity and also water quality. Mario, would you like to complement?
I would say that going back to the suppliers crunch that we all faced starting on second quarter, third quarter. We saw a lot of supply chain disruptions mainly in raw materials and logistics. That was affecting our delivery for raw materials because of lack of availability or logistics wise. On the other hand, we're enjoying of a strong demand in different markets. Right now we are not seeing bottlenecks in the future, but we're still gonna be playing on the safe side on inventories to serve our customers.
Today for all of 2021 has been key to manage inventory well and have some excess of inventory, secure our raw materials and logistics, no matter if you're paying a premium price. With that, the end strategy is to gain market share and to have a better penetration of our products and services with our end consumers. Once everything comes back, that will return in higher market share and margins.
Sorry, I didn't understand your question well, Michael. Hi, thanks for joining. Yeah. I think we took the biggest impact in margins and in cash flow increase in our inventories, and I hope that normalizes very soon. But I think that the team did just an incredible job on getting us all of the materials that we needed to service our customers. We saw tremendous drive in volume. Obviously with lots of challenges, but I just would really congratulate our team for being able to get access to everything that we needed in the best way possible.
Great. Thank you. Our next question comes from Regina Carrillo from GBM. This one is for Matt, actually. Of the five central themes that you mentioned earlier, which one do you think is the most crucial for Latin America? And how can water solutions companies like Rotoplas solve them?
If I reflect on that said , I might highlight three sectors. One is the mining sector and the conversation that Charlie had earlier in terms of the solutions there is super important. The growth rate that's gonna come out from lithium, from copper, from graphite in Latin America is tremendous. The resource, the water is so central to the production. How do you make sure that the solutions are in place to make that scale in a sustainable fashion? That's the first one. I think the second one is the industrial effluent management and the ex-auto example that was there earlier. The pressure on any export producer to have both low carbon intensity and low water intensity to their output from major consumers around the world has increased dramatically.
I think providing a solution for those industrial customers who need to find ways to dramatically reduce effluent, and again, there's some really good examples already in the Rotoplas portfolio. The last one I would say is hydrogen. There are key places in Latin America that are intending to be major global producers for hydrogen. The water management challenges that are coming are as yet un. There's a set of how do I design into a green hydrogen project appropriate water management technologies, and that design-in process is occurring currently. The growth rate there, we're talking about, you know, 30%-40% growth for the next decade in that area, with Latin America being a key center to supply the globe. I think that's the third one I would look at.
Thanks, Matt. That's really good insight. Our next question comes from David Seaman from Alpha Cygni. Can you please discuss the Plomero strategy? How does this initiative add value to the whole ecosystem, meaning Rotoplas to the plumber, to the client, and what are your future plans in this area?
Thanks. Hi, David. Thanks for joining me. Thanks for the question. I would say that in the markets that we have played for the longest time, such as Argentina, Peru, Central America, and Mexico, the level of loyalty that plumbers have to Rotoplas is very high. The connection, the access we have to these plumbers is very high. We see them as our customers. On the other hand, users have tremendous regard for Rotoplas.
The brand recognition in our markets is huge, and we have very high levels of loyalty to the Rotoplas brand. While we were treating them both as just customers, I think there's an opportunity to structure the way these customers, these end users are being serviced, so that they can have a much better experience, and so that we can have the best plumbers with the best capabilities, getting the best opportunities for work and reducing, in a very relevant way, waste.
I would say on average, a plumber might spend 80% of their time finding a customer, getting to the customer, to see what's needed, going to the shop, buying the products, driving them back to the customer's home, and then just 20% of the time doing the actual work. There's a tremendous amount of waste with these traditional services. If we can have customers tell us what they need, and we can structure that workload in a way that plumbers can find a more efficient way to service those customers, they'll most likely be delivering a better service at a better cost with better margins.
Consumers, on the other hand, might be seeing better prices, getting a much better experience, and from the best talent available. We're very excited about what this might mean for additional businesses such as bebbia, our traditional products business, and our distributors. Because we would obviously leverage that distribution channel that we have to better service these needs. It's integrating in a better way for increasing efficiency to service the traditional services that are implemented. Mario, did you wanna comment something?
Well, good afternoon, David, for you. Good morning for the rest. Just in a nutshell, what Charlie explained, part of building an ecosystem is creating the connections, sometimes between vendors and users. Plomerísimo can fit nicely on this ecosystem that Rotoplas will start building up using technology and data. The endgame might be to build an AI-based marketplace for service and installation, so their people can connect and help Rotoplas and products to help them, the consumers and plumbers connect in a different way and make it more efficient for everyone. That's one bit. I saw the Q&A about the Metaverse and technology.
You know, that's a very new thing, but you know, generating ideas, you can end up using the Metaverse to build communities and connect the plumbers community there, and you know, help on this ecosystem strategy. That's the kinds of things we're thinking. More to come in the coming years.
Thank you. We have another question from Mariana Cruz from BTG Pactual about rieggo. Can you please give us an update on this business unit?
Mario, would you like to comment?
Sure. Well, the business is starting to gain traction. We've been building a very healthy pipeline and connecting with a lot of customers. We believe that this business will start to bring interesting results late next year or going into 2023. So far, the test is there, and we're happy on what we have achieved so far.
Maybe just to add to that, I think that what's most relevant is that we have been able to validate on a lot of our assumptions. First of all, there being a need for services needing technified irrigation. That's very interesting to see. Secondly, that our offer, our unique value proposition, is one that is very well-regarded and that we have also been in the stage of optimizing our business design. I think that rieggo's getting on the way of now going towards a scale-up part of that business life. But thank you.
Thanks, Charlie. Our next question comes from Paulina Perez from Miranda Partners. What are the main challenges to achieve your ESG goals?
Jose?
Thank you, Paulina. We see a set of both, you know, internal and external challenges. Internally, the objective is to create an ESG mindset, so we will all operate within our sustainability framework regardless of position, geographical location or role. Externally, we think the main challenge are the macro trends in countries where we operate, such as the transition to renewable energies, social unrest, and sustainable business models and consumer expectations of sustainable companies.
Sorry, were you done, José Luis?
Yes, just done.
Just maybe additionally, with our strategy of 360 degrees focusing on people, profit and planet also, trying to balance between planet and the other two, particularly planet. Fortunately, we've seen that the right approach to managing water is the most known, the most sustainable one, but the most economical one, and the one that offers the best reliability. That is really driving our strategy. A little bit of the challenges is that that still needs to be understood by the customer side. It's very new. Customers tend not to be experts around water, so there is a lot of education that needs to be taking place for that to happen.
If I may add, something else is on the other side of the equation, as you see, José Luis disclosed one of the metrics that we're gonna be chasing is to certify our vendors in ESG metrics. That will require also a lot of education to our vendors network, because we need to explain to them why is the importance of ESG. Some of them might be very well prepared, but some of them will be a completely new thing for them. That's kind of the challenges the company will be facing forward. We'll try our best to make it happen.
Thank you. We have one more question from Mariana Cruz in BTG. Can you please tell us more on what countries drove the cut down on the expected growth in EBITDA for other countries from 22% ranging to 24%, all the way to 15% and 17%? Thanks a lot.
Thanks, Mariana, for your question. Mainly it was driven because as I was explaining, the services segment of the business was delayed because of the pandemic. In others you have SYTESA Brazil. Remember, in others you have the Central American products, the Peruvian products and the water as a service that we are starting in Brazil. That business has been delayed in performance. That's the reason we dropped the speed of growth.
Thank you. Our next question comes from Humberto Cortés. You are launching innovative initiatives to growth. What R&D expense are you expecting for coming years?
Mario, do you wanna maybe answer that one?
The target is always to do anywhere between 1%-2% as a percentage of revenue. We are pushing hard within the company to make that happen. As we move the transformation and the innovation needs of the company, that is happening. A lot of energy and money is being placed into, I would say, not only research and development, but I will also include the word innovation. That's what will be anywhere from 1%-2% of the revenues of the company.
Thank you. Our next question comes from Jorge García Salmones. What is the comparative consumption between bottled water and the bebbia service? My question is focused in asking if you see a change in the uses of the people for water consumption itself.
Thanks for your question, Jorge. Very interesting question. So one of the biggest benefits that the bebbia service offers is practicality. The difference for all of us who've ever used these big bottles of water at homes is four-gallon jugs or 20-liter jugs of water. It's not very convenient that once one of this is finished, that you need to change this bottle, which is heavy, and you don't necessarily have one at home, and you need to go out and buy one, or you need to wait for the delivery service to get you one. When you have water in the way we offer it, which is purified at the point of use, and there is no lack of it, people start using much more of it.
They use it for other purposes than they were used to, such as maybe cooking, washing vegetables, brushing their teeth, and other purposes. We do see that water consumption increases very much once the service is hired. One of the benefits that is like the most is the practicality of the service, even above the sustainability of it or the economics of it. That's the feedback we get from customers, and that's what really drives very high Net Promoter Scores in the service.
Thank you. We have another question requesting if Matt Rogers can give us some insight on the poll question.
I'm happy to talk about the poll question. The poll question came out and said that, you know, scarcity and water quality were the key determinants, and I think that's right. That's how customers experience the challenge. I would say that the poll question, though, that's a compound answer. It's a compound answer because one of the reasons for scarcity is because of things like climate change and the increasing droughts in particular, and the unpredictability of water supplies in major markets. The other climate change impact is the impact when a major storm comes through on the central water infrastructure in many markets. The ability to return to a centralized solution after a major event has turned out to be much longer than consumers are comfortable with.
They can't wait two or three days to have potable water after a hurricane comes through. The U.S. alone experienced something like 20 events over the last year that had major impacts on that kind of infrastructure. I think really understanding the climate change and how that's really pushing it is quite important. I think the corollary is the population growth obviously is part of increasing water demand, but where that population growth is occurring is often in areas that are already highly water stressed.
I'm in a small community in the mountains outside of San Francisco right now, and we have a giant lake, and we have apparently plenty of water, but there are so many people that are trying to come into an area where the water infrastructure just can't handle the quantity of new population coming in. There's a big need to develop alternative models in, you know, small communities like that, and then large communities like Los Angeles, where the fight is between the urban and the agricultural demand for the same water sources. You know, it's still coming out of the Colorado River, and there's just not enough to go around to all of the different stakeholders. Population growth, where it's occurring, ends up increasing the stress on the system.
I would say government regulation, you know, is tightening. I think the customer side of this equation is perhaps more important. The pull from large industrial customers, large technology customers to be able to provide very low water impact solutions in their core operations has gone up dramatically over the last decade and really over the last two or three years come into focus in terms of the ESG commitments that those companies need to make. If we missed one on the pull, the whole role of customers and changing customer expectations for water is actually quite important.
Thank you. Our next question comes from Mariana Cruz at BTG. Finally, to understand more, what drove the minority stake acquisition in Banyan Water? Can we expect more acquisitions on the smart water management sector in the USA? Thanks again.
Nando, would you like to start with this one?
Yeah, sure. We can complement this, a very interesting thing for everyone within the company. The thought behind doing that acquisition is to accelerate Rotoplas into the water digitization trend. To complement with the very interesting skills with our very interesting platform, and really to co-create the first massive data collector and player on water digitization. To the second component of your question, which is, should we be doing more on that water technology space? There's not that much more. There are just a few players. The trend and opportunity is just starting, and we want to be a front runner on this water digitization. The same as any other business, when you do it well, a bunch of different opportunities to monetize that digitization can be very interesting. Charlie, you wanna comment? 'Cause you're very passionate about on this.
You know, we're very passionate about technology, and the reason is that the only way to service a massive amount of users with water solutions and being part of the solution is using digital technologies. I think I mentioned this even on this same forum. It would've been impossible to see a ride service business such as a taxi business grow as much as Uber did without technology. You know, managing all of these drivers over a radio like it used to happen before would have been impossible. It's only the availability of this technology that enables something like Uber to happen, right? Or Amazon.
I can mention that Rotoplas aims to play the role of the platform that connects the solutions availability with customers and customer needs. It is really with these kind of technologies that we will be able to service lots of customers and make sure that their systems are running optimally. This is one of the different efforts we're doing in being able to have optimal solutions where we implement them and we service them for our customers in a massive scale. Small solutions in huge quantities.
If I can, Charlie, I can give the audience some data points, and that can build back to David, similar question around ecosystem and Plomerísimo. Today, Rotoplas' ecosystem is composed of these stakeholders. We have more than 3,500 suppliers. We are in 14 countries. We have 27 different product segments. In the value chains, in distributors' part and installers' part, we have more than 29,000 points of sales. We have close to 20,000 plumbers in our loyalty programs. Then in the end users, we have more than 50,000 bebbia users. We have more than 30,000 e-commerce clients, and we sell roughly more than 1.5 million units for water storage.
Connecting all those into a common platform, that's the ecosystem we will be trying to build with technologies such as the Banyan Water technology. Obviously, when you create and connect all these different parts of the Rotoplas' ecosystem, different businesses and opportunities will come by.
That's great. Actually, our next question from José Carlos Coello. It's kind of, I think you both tapped into this in a certain way, but what kind of software use to reach water digitalization will AGUA be using, whether it's the metaverse environment or any other sort of software?
Definitely we will be using software and the metaverse environment. It is to precisely this point, users, anywhere from business users to household users, are not expert in water solutions. They don't really wanna become an expert for a solution that they'll purchase once in their lifetime. They would really rather not have to be concerned with the operation and maintenance of that solution. We see tremendous opportunity for those customers wanting to rely on Rotoplas and all of our partners on the supply side to help them diagnose their issue and design a solution, implement it and operate it and do the maintenance.
Like I mentioned, since we're going after a decentralized approach, which is a much more sustainable approach and the more obvious approach in terms of the way nature works, water is nature very decentralized. The only way that we will be able to accomplish this is using this software and this metaverse environment to both develop capabilities, even train service providers to deliver and even if necessary train users. Well, deliver to users and if necessary, certainly train users.
Thank you. Our next question comes from Luis Miguel Alcalde. In your view, what are Mexico's main challenges in terms of water management and how Rotoplas could take advantage of it?
Well, like we mentioned, on the poll, again, the question was which of the following do you think is the biggest driver for demand of water solutions? The answer, the most popular answer was water scarcity. Unfortunately, the Mexico's water management, like even in the U.S., water infrastructure is very old, and it's not enough for the rate at which population grew and the consumer habits, water consumption habits grew. It's really water scarcity that's driving a tremendous opportunity for Rotoplas. The way we'll take advantage of this is developing the sustainable solutions that are decentralized, sustainable solutions, such as rainwater harvesting and water treatment and reuse. We see the very interesting opportunities in Mexico. Again, it's not only something that happens in countries like Mexico and Latin American countries, but also in the U.S., which is a huge market.
Great. Thank you. We have a follow-up question from Paulina Perez for Matt, actually. Do you think investments and new fund creations focused on ESG can lead companies to make positive changes or lead them to more sustainable operations?
I think the ESG fund story is actually for being and sustaining projects around the world. The basic equation is quite important, which is if you're an ESG fund, there's a set of fossil funding projects that you can't fund anymore, and you have to find a place to put that money. The net effect is great competition for sustainable projects from ESG funds trying to be able to deploy their money and put it to work. The net effect is that a set of the most ESG-oriented projects around the world are seeing very, very low cost of funds, including some, you know, very highly decentralized and technologically enabled kinds of solutions.
The opportunity, as these funds begin to think about what kind of asset classes qualify for ESG funding, what you're seeing is, you know, very attractive, funding opportunities, that accelerate the ability to scale up those kinds of solutions around the world. I think as we see more and more funds show up in the ESG category, that puts more and more opportunity in the market for those who have solutions that meet that need and really allow those funds to deploy capital and get it to work to scale up.
Thank you, Matt. That concludes our question and answer session. If we were unable to answer your questions today, please reach out to our investor relations team, and they will be happy to help. We would like to take this opportunity to thank all our speakers again for their contributions and to thank you all for joining us virtually today. We hope that next year we will be able to meet in person. As a thank you for your time and interest, we would like to offer everyone on the call today two months free when you subscribe to bebbia with the code Aguade2021. Please visit bebbia.com for more information on this product. Thank you all again, and please don't hesitate to reach out to the team if you have any further questions.
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