World demand for water treatment products is projected to increase 5.7 percent per year to $59 billion in 2013, well above the rate of economic growth in essentially every region. In addition, the marketplace is evolving, with smaller players filling local needs as the influence of larger, global companies wanes, according to two recent market reports.
According to a report from the Freedonia Group, based in the USA, large, yet still developing markets such as China and India will register the fastest growth in the next few years, due to continued industrial expansion and concerted efforts to expand access to safe water supplies and adequate sanitation facilities, especially in rural areas. In more developed markets, advances will also be fairly strong due to initiatives which focus on improving drinking water quality, reducing wastewater discharge and increasing wastewater treatment and reutilization rates.
These and other trends are presented in Freedonia's new study, World Water Treatment Products.
While the recent economic downturn will result in some deceleration of market growth from the very strong advances posted in the 2003-2008 period, prospects in most regions will remain substantial, the study found. However, the reasons underlying the continuing expansion of the water treatment products market around the world vary immensely between regions. In the most developed markets -- the US, Canada, Japan and most of Western Europe -- gains will result from efforts to increase water reuse rates, improve the aesthetic quality of drinking water and further reduce the chances of water contamination. Such efforts will boost demand for products such as advanced membrane systems, disinfection equipment and specialty chemicals used in industrial wastewater treatment.
In the least developed parts of Asia and Africa, market gains will be among the fastest in the world, but even spectacular growth will leave several hundred million people without access to safe water or even minimal sanitation facilities.
In the large Middle Eastern market, gains will be prompted by continued expansion of desalination capacity in the region, not only in the "textbook case" desalination leaders Saudi Arabia, the United Arab Emirates and Kuwait, but also in countries such as Algeria, Israel and Libya. The expansion of desalination will boost demand for evaporators and membrane systems, but will limit opportunities for chemicals and other water treatment products which are not used as much for desalinated water, which usually has very low levels of dissolved solids, the Freedonia Group reported.
Despite the global recession, or perhaps become of it, a number of fundamental changes are occurring within the industry, according to the 11th edition of the Water Yearbook published by Pinsent Masons, a global infrastructure law firm and a specialist in water projects. Most notable among the changes is the emergence of smaller players onto the global stage, for instance from China and Brazil, as the trend towards local contracts continues.
China itself is now the driver of the global water industry, while member countries of the Organisation for Economic Co-operation and Development (OECD) now account for less than half of all contracts (compared to 84% a decade ago). Finally, the "big five" water companies, which used to dominate the industry, have now consolidated into the "big two", but still control a 33% share of the total global water market.
Dr. David Lloyd Owen, water consultant and author of the Pinsent Masons report, said, "Despite the funding issues that beset the industry on both a global and a local scale, water is still seen as an attractive asset class. The private sector has a crucial role to play – by 2015 we estimate that 16% of the world's population will be served by the private sector. This is reflected in the number of contracts awarded this year, which although small, shows 30 contract gains, showing exceptional players can still close deals even in these difficult times."
Freedonia's World Water Treatment Products report is for sale. More information may be found on the company's website, www.freedoniagroup.com. The Pinsent Masons Water Yearbook can be downloaded for free by visiting: www.pinsentmasons.com/wateryearbook.
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