Urban wastewater directive perking up treatment equipment market

The forthcoming 2005 deadline for compliance with the European Union Urban Waste Water Treatment Directive (UWWTD) is giving a boost to the continent’s municipal water and wastewater treatment equipment market, according to an international market research company.

A new report by Frost and Sullivan predicts that the municipal water and wastewater treatment equipment market will grow from €2.25 billion (US$1.96 billion) in 2001 to €2.78 billion (US$2.42 billion) by 2008. The municipal sector is predicted to account for 68.5% of total water and wastewater treatment sales by 2008.

Demand is being stoked by the new legislative requirements, says Frost and Sullivan research analyst Arantxa Mencia. “The revision and tightening of existing EC standards will promote the implementation of new water treatment plants,” she said. “However, the main thrust of investment will be derived from upgrading and enlarging old treatment plants.”

Growth in the market is also being pushed by an increasing demand for denitrification equipment, the elimination of crytosporidium from water supplies and an impressive increase in the membrane sector – accounting for a 32.3% share in 2001, says the report. These factors will work to offset fierce price competition, market maturity, and a high level of saturation.

The largest leading national market is the UK, with a 26.7% share, owing to huge investments by the utility companies in recent years.

“Presently, this sector is at the mature stage of its life-cycle, with European and regional legislative pressure promoting sales,” said Mencia. “The lack of necessity for the construction of new water treatment plants will limit the growth of the water treatment equipment market, with revenues coming mainly from refurbishment to meet the escalating water quality standards.”

“Secondary treatment equipment currently occupies the top spot in the municipal wastewater treatment equipment market,” Mencia continued. “This type of treatment equipment will be required by 31 December 2005 for ever agglomeration with a population of between 2,000 and 15,000. This UWWTD deadline will provide the main impetus for growth in the secondary treatment equipment market.”

However, the tertiary and advanced treatment equipment market is poised to become the most dynamic sector, says Frost and Sullivan, and is predicted to create a new revenue stream and stimulate demand in the whole market.

Finally, the players within the market are also predicted to change, with a gradual decline in the number of companies due to mergers and acquisitions. Curently, the top three firms in the market, Vivendi Water Systems, Ondeo-Degrémont and Stereáu account for 22.6% of sales in Europe.

“This percentage of market concentration is predicted to increase over the forecast period, as the market will consolidate and these companies will continue their globalisation and acquisition strategies,” said Mencia.

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