EU accession to spur demand for water treatment chemicals
New growth opportunities await suppliers of water treatment chemicals 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 with the accession of eight states from Central and Eastern Europe (CEE-8) to the European Union (EU). 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 EU directives for drinking water and urban wastewater.
This increase in demand is expected to drive revenues in the market for coagulants and flocculants from €62.1 million in 2004 to €129 million in 2011 at a compound annual growth rate (CAGR) of 11%, according to growth consultants Frost & Sullivan (http://chemicals.frost.com)
Budget constraints are hindering the purchase of high-value water treatment chemicals even though the improvement of water quality and wastewater infrastructure is a priority for industrial and municipal end users. In such cases, affordability is a key purchase criterion for customers and is also a differentiating factor for suppliers.
Frost & Sullivan Chemicals Research Analyst Evelyne Turmes explained, “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 programmes is likely to provide the financial backing for modernising 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.
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,” observed Ms. Turmes.
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.
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.