Environmental industries begin recovery in Asia-Pacific

Environmental industries in the Asia Pacific region are back on the up after the economic downturn and are expected to fully recover over the next financial year.

This is the view of finance house Frost & Sullivan, whose regional environmental and building technologies consultant Ranajay Dasgupta pointed to improving market conditions as many countries come out of recession and industrial production picks up.

"Waste management companies can expect a rise in revenues in the industrial sector as the economy rebounds in 2010 and industrial production is back to the level of pre-recession days," he said.

"Earnings from the municipal sector will continue to grow due to governments' spending on environmental infrastructure.

"Solid waste recycling market is expected to grow in ASEAN at a compounded annual rate of 6.5% to 8.5% in the period 2010-2012.

"Water and wastewater markets will also grow in the region, with Singapore and Malaysian markets expected to grow at a compounded annual rate of 10% and 7.5% respectively in the period 2010-2012."

In terms of industry specifics, water treatment equipment manufacturers in Singapore and Japan will continue to increase their footprints in high-growth markets such as China and Middle East, he claimed.

"Rising water shortages and cost reduction achieved through technical innovations are spurring the growth of desalination in Middle East and Northern China and water recycling in Australia.

"High urbanisation rate in countries such as Indonesia will drive the growth of water and waste management markets in urban cities," says Dasgupta.

He adds, "Developed countries in the region such as Japan are unlikely to see major construction of new environmental facilities. However, there will be demand for renovation of existing facilities, most of which were constructed 50-60 years back."

Dasgupta identifies sectors that look promising in water and wastewater management to include desalination, recycling, recovery and 'energy from wastewater' solutions such as Upflow anaerobic sludge digestion blanket (UASB) Internal circulation (IC) reactors, and digesters.

Still the industry will continue to face challenges as growth in sectors such as 'waste to energy' has been slow and sporadic.

"High capital requirements mean that the market will only exist in parts of the world where clear waste legislation exists," he said.

"Participants in industrial waste management trying to penetrate countries such as Malaysia continue to face bureaucratic hurdles in obtaining licenses/permits."

After a stagnant or slight decline in growth, environmental markets in Asia Pacific are expected to pick up in 2010. Water and wastewater management markets will see a technology-led growth in recycle and recovery, reverse osmosis desalination and 'energy from wastewater' solutions.

"Combined pressures of waste management and energy efficiency requirements will drive the growth in the waste management market. The rising interest of market stakeholders, and support from the governments and green building associations will spur the growth in the green buildings market in countries such as Australia, Singapore, South Korea, Hong Kong and Malaysia," said Mr Dasgupta.

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