Value-Added Services Critical In South, East African Water / Wastewater Chemical Treatment Markets
Cape Town, South Africa — The South and East African water and wastewater chemical treatment markets present growth opportunities for companies that set themselves apart through value-added services. Businesses that have lean operations and differentiated product offerings, such as specialist testing or consulting services, are expected to outlast competition.
New analysis from Frost & Sullivan, South and East African Water and Wastewater Chemical Treatment Markets, finds that the market earned revenues of $126.5 million in 2006 and estimates this to reach $239.6 million in 2013.
Numerous water and wastewater chemical distributors in South and East Africa have to deal with low margins in this highly competitive market. East African companies especially are challenged with slow rates of water and wastewater infrastructural development, which directly impacts water and wastewater chemical sales. These companies typically focus on other sectors as well to survive.
"Companies are thriving in the industrial and municipal sectors," remarks Frost & Sullivan Research Analyst David Winter. "Despite the high competition, companies with a good track record as well as a competitive product offering can capitalise on opportunities, especially in the industrial sector, which has a higher growth potential than the municipal sector."
The South African power utility, Eskom, has ambitious expansion plans, which will have a marked impact on the amount of water treated within the South African industrial sector. Each new and re-commissioned coal-based power station will have to treat large volumes of cooling water.
"Although the limited financial resources of East African municipalities has curbed the expansion of water infrastructure and building of new facilities, greater government interest and financial aid from international aid organisations such as the World Bank can help improve matters," says Winter.
Meanwhile, the rapidly rising urbanisation rates will ensure that the municipal sector does not lag far behind on the growth curve. South African urban areas already treat sizeable quantities of water for potable use, but there will be a steady increase as more people move to urban areas.
SOURCE: Frost & Sullivan