Radical changes for water industry ahead

Water supply shortages and poor quality of drinking water have created growth opportunities for the water treatment industry, according to a report by the Helmut Kaiser Consultancy.

The global market for water and wastewater treatment equipment, processes and services will expand from US$ 287 billion in 2004 to $ 303 billion in 2005 and grow further to $ 412.4 billion by 2010, according to the German research company Helmut Kaiser Consultancy. The company recently completed a study that examined and evaluated the development of global markets, single consumer sectors and technology segments.

The mineral and bottled water sector experienced the highest growth rate (14% in 2003), and is expected to double its market size of 2003 until 2008. Five companies dominate this sector worldwide with a market share of 20%. The global market for bottled water will show a stable high growth rate of 12%, given the increasing problems of low quality and even serious water supply shortages in public drinking water systems.

High investment is expected to flow into public drinking water supply systems, which have grown with an average annual rate of 9%. In particular, water treatment is growing at an especially high rate. Communal companies that belong fully or partially to government dominate the drinking water market worldwide, and approximately 20,000 companies worldwide are involved in water supply. However, multinational corporations will likely further concentrate these companies as more municipalities privatise their water operations due to the high investments and operating costs required in producing drinking water that meets regulatory requirements.

The drinking water market provides limited profit potentials of less than 12%, but it offers a relatively safe, long-term investment with small, annual fluctuations. Companies and public institutions, that combine drinking water with other utilities, such as wastewater and energy, can achieve a higher return of more than 15%. Asian nations, such as China, offer the highest growth rates because of state-launched public programmes to improve drinking water quality in the next five years.

The global wastewater treatment market has improved slightly. An average of fourteen percent of all wastewater worldwide was purified in 2004, but less than two percent of wastewater was purified in Africa and South America. China confronts some of the most serious environmental threats in the world - water scarcity, flooding and increasing industrial and municipal pollution - that jeopardises regions throughout the country. China’s extraordinary economic growth, industrialisation, and urbanisation, coupled with inadequate investment in basic water supply and treatment infrastructure, have resulted in widespread water pollution. Consequently, approximately 700 million people (more than half the population) consume drinking water contaminated with varying levels of animal and human excreta that exceed maximum permissible levels by as much as 86% in rural areas and 28% in urban areas.

Nanoscale purification, disinfection and measurement are becoming the standard of municipal, industrial and domestic water/wastewater treatment in the next years. Any player in the water industry who wants to secure a leading position in the future should study carefully the application of nanotechnology and molecular technologies and begin to invest in them.

The shortage of water supply quantity and quality create growth opportunities for the water industry, and high standard treatment and cost efficiency are the success factors for the competition. Nanotechnologies and molecular technology (nano-bio-info convergence), instead of conventional chemical and thermal methods, are set to provide more clean and safe water at reasonable cost.

The applications of nanotechnology and molecular technologies cover a wide range, from drinking water to industrial water to wastewater, from filtration to disinfection to desalination. Nanotechnologies are already used in several fields in a small scale. The full development of large-scale applications is on the way and will influence almost all the segments in water industry.

The Helmut Kaiser Consultancy updated this study in November 2004. For more information please see: http://www.hkc22.com/watermarketsworldwide.html

Global market highlights

High growth in global water and wastewater treatment;
Bottled water market will double from 2003 to 2008;
High growth in Chinese water market, particularly bottled water, public water supply, treatment, and pumps and pumping stations;
Demand for nanotechnology in global water market to grow 50% by 2015.