Latest findings unveiled this week by Frost & Sullivan, the international marketing consulting company, are bullish about the growth prospects and opportunities currently observed in the Middle Eastern, North African and European desalination market.
The study identifies the dominance of thermal processes for desalination in the Middle East and the crucial role of reverse osmosis for industrial end-users in Europe as the main attributes typifying the overall market at present. Frost & Sullivan highlights restricted opportunities for price increases due to stiffening competition in the market as a further factor gaining in prominence.
Matthew Barker, Research Analyst at Frost & Sullivan, explains: "Our research has shown that increasing global water shortages and the decline in plant prices will boost the provision of potable water for municipal, industrial and a host of other end-users via the desalination plant channel."
"The steadiest source of growth in this market is the widespread need for potable water for human consumption, the irrigation of agriculture and for industrial end-users, who all demand a guaranteed supply of good quality freshwater," he continues.
Frost & Sullivan value the Middle Eastern, North African and European desalination plant market at $1.05 billion in 1999, a figure that has been increasing in a fluctuating manner over recent years.
Historically, the erratic nature of sales and contracts secured in the desalination plant industry has been responsible for the inconsistency in growth rates. However, Frost & Sullivan predicts a clear growth path ahead for the total market with revenues climbing from $1.05 billion in 1999 to $2.54 billion in 2006.
Matthew Barker comments: "The fast-paced expansion of the population in the Middle Eastern region, coupled with water shortages and decreasing costs of desalination are predicted to unleash demand across all regions."
The rising number of refurbish and replace contracts, growing tourist industries, the drive towards self-sufficiency and private finance initiatives augur well for growth prospects across the regions under review in Frost & Sullivan's study.
Prices in the desalination plant market--particularly in the reverse osmosis sector--are plummeting. Costs are plunging across all segments as competition stiffens and market participants endeavour to undercut each other when tendering for projects.
The study highlights the ascendency of the membrane desalination plant sector (comprising reverse osmosis and electrodialysis technologies) in the overall market. The ease of use of membrane facilities will continue to buoy sales in this sector, however, this driver will not be powerful enough to allow these types of plants to steal significant installed capacity from thermal processes.
Meanwhile, the thermal desalination plants sector will be picking up speed tremendously over the coming years, eclipsing membrane plant sales in the process and securing the top spot in 2006, when sales in this sector will be accounting for a massive 71.6 per cent, as the Middle East looks towards the provision of more potable water.
Growth in the thermal plants sector is expected to be driven by orders for large-scale potable water plants, especially in the Middle East, where the condition of the Gulf feedwater in particular necessitates investment in this type of tried and tested plant design.
Growing on the back of the company's extensive Shuaiba II plant, South Korean Hanjung emerges as the leading players in the total market, alongside Weir Westgarth, Degrémont, Fisia Italimpianti and Sidem.
The study concludes that in 2006, the Gulf States will be accounting for the lion's share of total sales in the desalination plant market, closely followed by Saudi Arabia. The municipal sector is at the forefront of end-user markets, followed by the industrial sector.
Frost & Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of high-tech markets, including the water industry, for market trends, market measurements and strategies. This ongoing research is utilised to complement a series of research publications--such as the European Commercial Scale Water Treatment Equipment Markets (report #3822-15)--to support industry participants with customised consulting needs. Free executive summaries of all Frost & Sullivan reports are available to the press.
Research Publication: 3857-15 - Middle Eastern, North African and European Desalination Plant Markets
Publication Date: July 2000
