Research Overview
Rising Costs of Water Propels Wastewater Treatment Equipment Market Growth
Wastewater treatment equipment companies weathered a terrible run in the market during 1995-97 when their incremental margins dropped drastically from 14 percent in 1995 to a negative four percent in 1997. With two good years in 1999 and 2000, the market is back on track and is bullish. Water shortage in the United States and the resultant high costs of water has contributed in no small measure to this trend. Industrial facilities prioritize water reclamation and reuse to decrease the amount of wastewater discharged and lower production costs. Treated gray water can be used for cooling and additional advanced treatment will enable its usage as process water for paper mills, construction activities, and even artificial lakes. The Pollution Prevention Act (PPA) of 1990 also mandates that pollution is prevented or reduced at the source, whenever feasible. All these measures and environmental conditions have greatly boosted the market for wastewater treatment equipment.
This Frost & Sullivan insight examines the status of the U.S. wastewater treatment equipment market with a focus on its benefits, drawbacks, and future trends. The market has been segmented into equipment for clarification, aeration, disinfection, and advanced wastewater treatment. This research service enables companies to align their positioning strategies to benefit from the changing markets and obtain maximum return on investment.
Need for Pollution Prevention Measures Drives the Market
There is a nation-wide need to implement pollution prevention measures and do away with the existing damage control approach. Both industrial and municipal sectors are attempting to prevent environmental issues at the start. They are looking for long-term solutions and are considering the economic benefits of reusing existing resources instead of being in perpetual want of excess or new resources. Although reclamation has been practiced in the United States for many decades, it is becoming a prevalent concept only now as communities begin to realize the damaging financial effects of declining quantities of water.
According to the World Water Council reports, residential water consumption will increase by 100 percent and industrial utilization by at least 33 percent by 2025. "Even Wall Street strategists are recognizing the water and wastewater industry as one of the best investment sectors for this century," says the analyst of this research. "Wastewater treatment is a critical service and society will be eventually compelled to adopt the equipment necessary to meet its reclamation needs."
Reuse/Recycling Fast Becoming a Popular Trend in the Wastewater Industry
The escalating costs for fresh water and tough discharge standards are forcing industries to seek cost-effective methods to treat wastewater and reuse it. For instance, some areas use treated wastewater for groundwater replenishment. A case in point is the Orange County Water District and the Orange County Sanitation District in California, which have jointly sponsored the groundwater replenishment system to treat wastewater to high purity levels.
"The present framework of the U.S. market demands innovative contract pricing models, strategic partnerships, improved performance guarantees and most importantly, a focus on trends," notes the analyst. "These trends include a shift toward non-chemical and multi-barrier treatment, package plants for smaller communities, and processes to control nutrients in wastewater streams." The total market revenue is likely to reach $1.32 billion in 2011 and could continue growing.
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