Water treatment equipment industry needs to care for its customers

The pulp and paper sector needs better customer care from its water treatment equipment suppliers, according to a new survey from an international marketing consultancy company.

The biggest weakness in the industry supplying wastewater treatment equipment to the pulp and paper sector is in service related factors including limited after-sales support and slow reactions to customer demands, say marketing consultants, Frost & Sullivan. Respondents to the company’s survey from the pulp and paper sector awarded ‘below satisfaction’ ratings for such factors. Frost & Sullivan expressed concern that wastewater treatment equipment suppliers that enjoy a stronghold in the pulp and paper industry and have close relationships with their customers have lower customer satisfaction than companies associated with basic water treatment supply.

However, despite these complaints, the industry is expected to grow in Europe from $260 million (£183 million) this year to $314 million (£221 million) by 2007, says Frost & Sullivan. The market is being pushed by wastewater legislation, the high levels of water pollution by the industry, and growing interest in the efficiency of systems. Already, 74% of customers have implemented on-site wastewater recycling facilities in order to achieve greater cost efficiency.

There are some important factors that influence how customers decide which supplier to use, says Frost & Sullivan. “On average, some of the largest water and wastewater treatment suppliers are recognised by only 57% of industrial customers,” said Saana Karki, Research Analyst at Frost & Sullivan. “Regional presence is currently perceived as the most powerful brand-positioning strategy.” Suppliers tend to achieve most significant success in terms of their regional performance, with the companies having above 90% regional recognition rates including USF Benelux and Alfa Laval in Benelux, USF Aquaflow and Purac in Scandinavia, Degrémont in France, VA Tech Wabag in Germany, and Andritz in Germany, Scandinavia and France.

However, according to Karki, in terms of purchasing criteria, the decision-making process clearly comes down to value for money. “Overall, product quality and reliability, critically associated with safety concerns, are also distinctive industry specific criteria in purchasing these generally capital-intensive and substantially large-scale systems,” she said.

Finally, it should be noted that despite the prospects for growth within the industry, this is a challenging market. The combination of the potential spread of economic slowdown from the US and current price reductions, together with the capital intensiveness and the already well established companies, means that there is a more cautious approach to new investment. “Along with low long-term profitability and price and demand variations, this capital intensiveness prohibits large-scale innovations in the pulp and paper sector,” said Karki. “Instead, on-site equipment, once selected, requires high quality and a long life cycle in order to generate the necessary cash flow for pay-back.”

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