Environmental Technologies Industries
||Environmental Technologies Industries
|Water and Wastewater Treatment Export Market Plan|
This report is designed to serve as a guide for U.S. exporters of water and wastewater technologies and services and focuses on two segments of the water market:
1. Water equipment and chemicals: equipment, supplies, and maintenance for the delivery and treatment of water and wastewater.
2. Engineering and construction services: engineering, construction, design, management, operation and maintenance, etc.
Over 300 private U.S. companies export filters, pumps, valves, pipes, instruments, and other equipment, as well as chemical and biological products for water and wastewater treatment. There are several hundred water engineering and consulting firms in the United States, many of which offer their services internationally. By concentrating on the market segments where U.S. industry is most competitive, this report aims to engage more water and wastewater technology firms in exporting their products overseas.
The global water market has been growing rapidly over the last decade and constitutes well over a third of the global environmental market. Market pricing, combined with the growing privatization of water and wastewater utilities, generates private capital to create and maintain rational water markets. The market is enhanced by more consistent enforcement of environmental regulations, worldwide consolidation of the water industry, and the proliferation of e-business. The global market for water and wastewater equipment and chemicals was about $42 billion in 1998. The market is expected to grow at a 4 percent rate over the next two years and reach almost $47.3 billion by 2002.
The United States, Western Europe, and Japan represent over 80 percent of the total market size, but those are mature markets with an average growth of 3-4 percent. The economic recovery of emerging markets in Southeast Asia and Latin America from the 1997 crisis, rapid expansion of the Chinese economy, and increasing demand in the Middle East promise a return to the 10 to 20 percent pre-1997 market growth in the developing world.
The major players in the global water and wastewater industry come from the United States, France, Britain, Japan, and Germany. Integrated, global companies based in France (Vivendi, Lyonnaise des Eaux) generally have a competitive edge over U.S. firms, which are mostly smaller and more specialized. European water companies that have more experience in operating and serving privatized or partially privatized facilities have a competitive edge in emerging markets where water and wastewater sectors are undergoing privatization.
U.S. companies are major exporters of water and wastewater equipment and chemicals. Many U.S. firms produce specialty equipment that is not available from other suppliers, which gives them a competitive edge in certain niche markets. U.S. companies frequently find industrial wastewater projects and projects funded by U.S. development agencies.
In the area of water and wastewater treatment works, the market is dominated by French and British companies. In particular, companies from France and the United Kingdom are by far the most competitive in providing integrated packages of designing, building, managing, and even owning water infrastructures around the world.
Strategies to Improve U.S. Industry Competitiveness
In order to succeed in the international market for water and wastewater technologies and services, U.S. firms should be aware of the realities of doing business overseas, know and be able to take advantage of particular market characteristics, and use available information support services.
According to environmental exporters, key success factors in overseas markets include:
Understanding local markets. The first step in a successful export market strategy is knowing where the markets are and how to access them. Knowing the stage and pace of market development, host government regulations, and the local business culture is critical in prioritizing business development efforts.
Building alliances and working effectively with partners in export countries. Local partnerships and representation are desirable for U.S. companies so that they can learn about attractive market opportunities before the competitors. Methods for developing a local presence range from hiring a local consultant or agent to represent the firm, to establishing a local office or a joint venture. Engaging in joint exporting activities (through joint ventures and consortia) with other U.S. firms is another way to enter a new market.
Finding financing for export activities. Development assistance is a primary driver in the water and wastewater sectors of emerging market countries. Multilateral development agencies strongly support, through technical and financial assistance, water supply infrastructure, wastewater treatment systems, and watershed clean-up projects, representing significant market opportunities. U.S. technology and services companies also can take advantage of many U.S. investment and export credit programs. Commercial financing sources include private investment funds, U.S. and local commercial banks, and vendor financing.
Table 1. Water and Wastewater Markets of 12 “Best Prospect” Countries
* The data for Saudi Arabia only address the desalination market.
Total Market Size
(millions of $)
Share of Imports
U.S. Import Market Share
|China (including Hong Kong)|
N/A = not available
See Chapter 4, “Best Prospects in Water and Wastewater Treatment,” for additional information on these countries and data sources.
Best Prospect Countries
The countries that represent best prospects for U.S. exporters of water and wastewater equipment and services are determined by a number of factors, including:
The overall size of the water and wastewater market in the country;
The openness of that market to imports (partly reflected in the share of imports in the total market);
The market’s growth rate; and
The historic U.S. position in the market and the U.S. import market share.
This report contains market profiles of 12 countries that fit several of these criteria: Australia, Brazil, China, Egypt, India, Japan, South Korea, Mexico, Saudi Arabia, Spain, Taiwan, and the United Kingdom, representing a mix of developed and developing countries. Table 1 presents a summary of the estimates of the principal market indicators for the profiled countries.
Brazil, China, India, Japan, South Korea, Mexico, Spain, Taiwan, and the United Kingdom all have water and wastewater markets that exceed $1 billion in size. Such emerging markets as China, India, South Korea, Taiwan, Mexico, and Brazil have enormous potential due to the extent of unmet water supply and sewerage needs. Their growth rate usually exceeds 10 percent per year. Japan, the United Kingdom, Spain, and Australia are mature markets with slower growth, but their sheer size and favorable business climate make them worth exporters’ consideration. The two Middle Eastern countries described in this report (Egypt and Saudi Arabia) are niche markets for U.S. exporters. Egypt is a large, exclusively aid-driven market, where massive U.S. foreign aid gives a significant advantage to American companies. Saudi Arabia is a highly specialized market with a focus on desalination technology, where the United States also has a good strategic position.
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