Abstract
"The Middle East and Africa region is currently experiencing high
average population growth rates, and this factor, combined with scarce natural
water supplies and a high urbanisation rate, is leading to very low per capita
freshwater availability. Countries are approaching dangerous water shortages and
contamination; as a result many European and US companies are considering moving
into this growth region, away from the mature western European and US
markets."
Matthew Barker, Industry Analyst, Environment Group (March 2003)
Recent trends have also shown that these markets are opening up to western
companies and as far as water and wastewater treatment is concerned,
collaborations with locally based companies are also becoming increasingly
common. Many companies are assessing the potential for growth in this area,
however how viable is it going to be for the latter to explore this market?
The size of this market has been estimated by Frost & Sullivan to be
around €2.0 billion in 2002, with the number of players being around
200-250. The nature of major players already operating in or exploring the area
seems to be dominated by western European countries such as France, Spain,
Italy, UK and Germany. For example, bidders tend to be of French and German
origin, e.g. Ondeo and Vivendi, VA Tech Wabag and others, for example SNC
Lavalin (Canada).
There is also a growing number of local companies appearing in the market,
though largely supplying less technologically advanced equipment, although this
is what the market generally still largely requires, particularly for
cash-strapped municipal end-users. Future years will continue to see sustained
growth in both the water, and increasingly, the wastewater sectors and Frost
& Sullivan expect the market to grow at a compound annual growth rate over
the period 2002 to 2020 of around 4.8 percent, giving a value of €4.7
billion in 2020.
Overall, this region presents many opportunities for companies and
large-scale projects are currently being tendered.
Amongst the key opportunities we find:
- Plants to provide potable water to small communities
- Plants for the treatment of urban wastewater
- Plants for the treatment of industrial wastewater
- Systems for the removal of contamination relating to hydrocarbons,
particularly in the oil producing countries
At the same time, many of the countries in this region are considered to be
politically and economically volatile, thus any major event may affect future
decisions to co-operate with them.
Also, different countries present very disparate levels of market
diversification and fragmentation, so new entrants should be aware of political,
economical and social factors affecting how these services are financed and
regulated.
Both the Middle Eastern and African markets seem very active in terms of the
number of water and wastewater treatment projects that are being commissioned.
The area is considered to have great potential particularly in view of the
growing maturity in the Western European market. Environmental issues, as well
as growing concerns for water availability are forcing many of these countries
to co-operate with their western European and US counterparts. Political and
economical changes and events, however, may affect the extent of potential
growth in these regions.
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