EU Directives compliance to promote water treatment chemical demand: Report
Financial aid to cash strapped end-users viewed as key to accelerating compliance, accourding to new report from Frost & Sullivan -- "Water Treatment Chemicals in Central and Eastern Europe - Coagulants & Flocculants"...
LONDON, Feb. 7, 2005 -- With the accession of eight states from Central and Eastern Europe (CEE-8) to the European Union (EU), new growth opportunities await suppliers of water treatment chemicals. The CEE-8 -- comprising Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Lithuania, Latvia and Estonia -- are expected to spur demand for coagulants and flocculants as they align their national legislation with the EU directives for drinking water and urban wastewater.
According to data information and management growth consultants Frost & Sullivan, this increase in demand is expected to drive revenues in the market for coagulants and flocculants from EUR 62.1 million (US$79.6 million) in 2004 to EUR 129 million (US$165.4 million) in 2011 at a compound annual growth rate (CAGR) of 11%.
While improving water quality and wastewater infrastructure is a priority for end users in the industrial and municipal segments, budget constraints are hindering the purchase of high-value water treatment chemicals. In such cases, affordability is a key purchase criterion for customers and is also a differentiating factor for the suppliers.
Frost & Sullivan chemicals research analyst Evelyne Turmes explains, "Unless an effective executive framework for enforcement of the EU regulations is set up, industrial plants are likely to keep investments in nonessential water treatments to a minimum."
Financial aid is a step towards creating and maintaining demand for water coagulants and flocculants in the CEE region. In fact, municipalities are dependent on external funding, loans and private investments to meet the EU directives for drinking water and urban wastewater.
Monetary support from the European Bank for Reconstruction and Redevelopment (EBRD), the World Bank and numerous other EU funding programs is likely to provide the financial backing for modernizing water treatment plants and implementing the stringent EU regulations regarding water quality.
Sourcing raw materials locally is expected to be a method to reduce transportation costs and enable suppliers to offer coagulants and flocculants at affordable prices while maintaining their profit margins.
A local presence is set to bring in knowledge and expertise for building tailored solutions to meet specific needs of the regional markets. Moreover, networking with local contacts is another strategy expected to prove successful in minimising costs.
While affordability is essential for long-term success, it is not the only means of gaining a competitive edge. Suppliers are also looking at broadening their product portfolio by offering a more comprehensive package of water treatment chemicals.
"With coagulants and flocculants as their base products, manufacturers are seeking to branch out into offering biocides, corrosion inhibitors and other chemicals used in the water treatment process," observes Turmes.
Suppliers of water treatment chemicals can expect to find numerous growth opportunities in the industrial sector, especially in the oil and petroleum refineries and in metal processing.
High-growth markets such as Hungary, Slovenia, Slovakia and the Baltic States also offer new growth prospects as the Czech and Polish markets for water treatment chemicals approach maturation.
While privatization of Hungary's municipal water treatment system is driving demand for coagulants and flocculants, robust economic growth and building projects for plants are key factors driving the demand in the Baltic States.
Prospectively, the untapped markets of Romania and Bulgaria offer immense potential for water treatment chemicals as these regions are stepping up efforts to improve their water and wastewater infrastructure and gain acceptance into the EU in the next wave of integration.
The following is a list of key industry participants: Kemira, KEMIFLOC, Kemwater ProChemie, Kemivesi AS, Kemipol, Belinka KTM, SNF Floerger, Feralco, Rokita, Sachtleben, Donau Chemie, MOTIM, Ciba, Cytec, Degussa/Stockhausen, KRONOS Ecochem, BASF, BK Giulini, Siarkopol, United Utilities, Infilco Degremont (SUEZ), Nalco, Kurita, BWT (Best Water Technology), GE Betz, Veolia Water Systems, Ondeo (Suez), Saur Neptun Gdansk, RWE Aqua Gelsenwasser, Suez.
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