Standardization: Wave of the Future?

When I joined WaterWorld back in 1994 I was told the manufacturing community serving the water industry was, for the most part, a fragmented mix of small and mid-size companies that made specialized products. The reason? In part because water systems had to be custom designed to meet the specific needs of a specific water utility. Because of the extreme variability in water source characteristics and other factors, it was impossible to build a “one size fits all” water system that could be purchased off the shelf.

I don’t know how accurate that view was 11+ years ago, but it is fair to say that the water industry has changed rather dramatically since then. It probably won’t happen tomorrow, but I foresee the day when shopping for a new water system would be similar to shopping for a car - you consult a handful of dealers who offer a selection of standard models with various options available, and pick the one that best suits your needs.

The consolidation of the manufacturing market isn’t a new trend. Anyone in the industry for the past few years knows about the rise of USFilter and the round of acquisitions and mergers of the late 1990s. But after the economic bust of the new Millennium, it seemed that things had calmed down a bit. In the last year, however, the acquisition binge has come back with a vengeance.

A surprising (to me) acquisition earlier this year was GE’s purchase of Zenon and its portfolio of membrane bioreactor (MBR) and hollow fiber technologies. I’ve always seen Zenon as an innovator in the membrane world and expected it to continue growing with this exciting, cutting edge portion of the water market.

GE in just the past two years has become a major player in the water market, although primarily on the industrial side of the business. Earlier acquisitions include Ionics and Osmonics. GE already had a major presence in the electric power industry, and it’s water acquisitions have played to that strength - positioning the company to provide the water-related systems needed by electric utilities.

With the Zenon acquisition, the company is now poised to become a stronger force in the municipal water industry.

I had the chance recently to talk with Colin Sabol, chief marketing officer of GE Water & Process Technologies. He said Zenon brings to the table a strong marketing force in the municipal water industry - something that GE sorely needed. At the same time, the association with GE will help the Zenon product line move further into the industrial market, where the products will play a significant role in the water reuse movement.

Sabol said GE is very interested in the potable water production market globally, especially the “higher end” systems. He said the market is ready for more standard offerings that can be offered at a much lower cost if produced in larger quantities. Small and medium size municipalities with consistent water types have a lesser need for highly engineered, customized equipment, and are hungry for systems that are standardized, lower cost, and easier to install, start up and service, he said.

The concept certainly makes sense to me. “I’ll take the red one! And throw in the satellite navigation system!”

James Laughlin, Editor