Municipal Water And Wastewater Treatment Equipment Market Gains Traction Amid Mounting Pressure For UWWTD Compliance

The European municipal water and wastewater treatment equipment market, albeit mature, is perking up in response to the implementation of the Urban Wastewater Treatment Directive (UWWTD) and its 2005 deadline for achieving compliance.
Efforts to significantly raise the standard of waste water treatment and to ensure common high standards across Europe - manifested in the strict new EU requirements of the Drinking Water Directive and the UWWT Directive - offer a new lease of life to the municipal water and wastewater treatment equipment market.

A new study by Frost & Sullivan, the international marketing consulting company, pegs European revenues in the municipal water and wastewater treatment equipment market at $1.96 billion in 2001, set to climb to $2.42 billion in 2008.

Frost & Sullivan underlines the commanding role the municipal wastewater treatment equipment sector plays in the overall industry. Soaring on the back of premium prices and the typically more substantial size of European wastewater treatment plants, this sector will account for a massive 68.5 per cent of total sales in 2008. The considerable investment in the municipal wastewater sector, synonymous with the struggle to ensure compliance by 2005, will further inject vigour in the municipal wastewater treatment equipment sector.

Arantxa Mencia, Research Analyst at Frost & Sullivan, foresees demand being stoked by legislative pressure to meet the obligations set out by the increasingly stringent Directives.

"The revision and tightening of existing EC standards will promote the implementation of new water treatment plants, however, the main thrust of investment will be derived from upgrading and enlarging old treatment plants," she notes.

The combination of influences which further lie behind the anticipated growth include the growing demand for denitrification equipment, the elimination of crytosporidium from water supplies and the impressive growth march of the membrane sector. The adverse repercussions of fierce price competition, market maturity and the high level of saturation will be offset by these factors, the study believes.

Strong consolidation of the European municipal water and wastewater treatment and widespread saturation within the municipal sector signal a further wave of steep competition in the overall market. Municipal end-users are demonstrating a higher degree of confidence in the utilisation of new and advanced technologies for both drinking and wastewater treatment.

Representing a 26.7 per cent share of the total market, the UK emerges as the leading national market, owing to the huge investments in the national water and wastewater sector by the utility companies in recent years.

Membrane equipment represents the dominant product segment in the overall municipal water treatment equipment market, accounting for a 32.3 per cent share in 2001.

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

Ms Mencia continues: "Secondary treatment equipment currently occupies the top spot in the municipal wastewater treatment equipment market. This type of treatment equipment will be required by 31 December 2005 for every 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."

The tertiary and advanced treatment equipment market is poised to become the most dynamic sector of the European municipal wastewater treatment equipment market. Frost & Sullivan believes that this type of equipment will create a new revenue stream and stimulate demand in the total market.

Around 700 companies, ranging from huge multinational turnkey plant suppliers to specialist manufacturers, are currently battling it out on the municipal water and wastewater treatment equipment stage.

However, this number faces a gradual year-on-year decline, with companies exiting the market or joining through mergers and acquisitions. In spite of the large number of players, the two largest French water groups, Vivendi Water Systems and Ondeo-Degrémont, have the tightest grip on this industry. French water group Stereáu has secured third position. Jointly, these three companies account for a 22.6 percent of sales in the overall European market. "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," Ms Mencia points out.

Coupled with the market's maturity, the lack of investment from the local authorities and the increasingly monopolised situation have boosted the municipal market's competitiveness. Large European contractors and engineering companies are trying to maintain their revenue levels through bidding for foreign companies in emerging high growth regions such as Africa, Eastern Europe, South America and Asia.

Frost & Sullivan's Analysis Of The European
Municipal Water and Wastewater Treatment Equipment Market

Report Code: B057, Publication Date: January 2002

For more information contact:
Kristina Menzefricke, Public Relations Department
Tel. +44 (0) 20 7343 8376 or Fax. +44 (0) 20 7343 8380
(kristina.menzefricke@fs-europe.com)



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