The evolving water and wastewater treatment markets across Central and Eastern Europe, an area of major strategic geographical significance currently undergoing the process of socio-economic and political reform, are perceived as developing markets of major interest.
Despite the restrictive budgets for environmental spending, the emerging nature of the economies of most of the countries in the area, combined with their heavy investment requirements as far as water and wastewater infrastructure is concerned, transform this sector into an increasingly appealing, growing and competitive industry. These are just some of the conclusions drawn in a new study by Frost & Sullivan, the international marketing consulting company.
As with most of the environmental equipment markets, reports a new study by Frost & Sullivan, the international marketing consulting company, the water and wastewater treatment equipment market is legislation-driven and, consequently, a demand-driven market. Other increasingly crucial factors impacting this market include an upswing in environmental awareness; governmental efforts to fortify environmental economic instruments; changing end-customers demands and the shifting dynamics amongst competitors.
Despina Kouzioka, Research Analyst at Frost & Sullivan, reports: "Within their preparations for EU acceptance, the Central and Eastern European countries are experiencing legislative developments bringing the individual national policies in line with EU Directives. Thus, the municipal and industrial sectors are being increasingly motivated to invest in environmental technologies."
"Applicant countries also benefit from the availability of funds for environmental and general infrastructure investments, from the launch of major research programs and from the whole administrative framework, which is set up to support these countries' way into the EU."
The overall market is being stimulated by the implementation of European Union (EU) water purification and wastewater management standards but is also being restricted by limited availability of environmental funds and administrative failings. The market size has been estimated by Frost & Sullivan to amount to a value of $4.04 billion in 1999, a figure which has been rising steadily over the last years. The overall market is expected to see robust growth over the forecast period, with total revenues predicted to reach $6.23 billion by 2006.
Poland and Hungary and the Czech Republic are the most important markets in terms of sales revenues and are characterised by a strong growth potential for the forecasting period. The smallest markets comprise Slovenia and the Baltic States, a fact which highlights the effect of the various market restraints for these less developed markets, with financial and legislative difficulties as the most dominant.
Primary wastewater treatment equipment generated the lion's share of total revenues in 1999, followed by water treatment, secondary wastewater treatment and the embryonic tertiary wastewater treatment segment.
Despina Kouzioka continues: "Central and Eastern European countries are currently undergoing transformation, whereby their market is restructured to adopt open market features including private participation, free prices, competitive policies. In the case of water and wastewater treatment equipment, the effects of this driver are paramount and can be seen in the rise of both quality standards and customer expectations from the systems installed, as well as the boost in demand levels."
Competition is relatively moderate, keeping market concentration low, as revenue shares in the total national markets are fairly equally split among the main players. Pricing is the most important competitive factor and, combined with quality and service, a good means to gain differentiating advantage.
The study concludes: "Other key competitive factors for this market include availability of financial, technical and human resources, local network of contacts, past references, integrated and professional approach to solving customers problems and brand awareness."
Frost & Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of high-tech markets, including the water and wastewater industry for market trends, market measurements and strategies. This ongoing research is utilised to complement a series of research publications--such as the European Advanced Water and Wastewater Treatment System Markets (report #3793-15)--to support industry participants with customised consulting needs. Free executive summaries of all Frost & Sullivan reports are available to the press.
Research Publication: 3792-15 - Central and Eastern European Water and Wastewater Treatment Equipment Markets
Publication Date: April 2000
