Great savings to be made from outsourcing industrial water services

Major cost savings can be made from the outsourcing of industrial water services, although there remains a low level of customer awareness of the potential benefits. The largely supplier-controlled domain is currently worth $590 million of European annual sales and is predicted to rise to $1.5 billion by 2008.

This is according to a new study from international market research company, Frost & Sullivan, which lays out the opportunities for companies to outsource water supply and treatment services.

There is growing popularity in the outsourcing and externalisation of non-core business activities allowing organisations to redirect resources more efficiently towards greater value-adding activities and enhanced services. A relatively recent development is the outsourcing of water supply, water processing and wastewater treatment.

The study recommends that water and wastewater contractors need to adopt innovative and proactive approaches in order to win customers. It is suggested that there is a great potential market for contractors who are able to supply a complete, integrated service all the way from water provision, through manufacturing to wastewater treatment and discharge.

John Raspin, Research Manager at Frost & Sullivan points out that there is a great range in stages of development of the outsourcing of water and wastewater treatment. This current research highlights a general trend towards liberalisation in the utilities market, but as Rapsin points out “The process will be slow”.

The European Water Framework Directive (200/60/EC) is set to overhaul the management of water in Europe which it is thought will help outsourcing activities to shift up gear as pressure mounts for companies to comply with legislation.

Currently two key French players, Ondeo and Vivendi Water, dominate the water service outsourcing market.

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