The water and wastewater treatment chemicals market in the Gulf Corporation Council (GCC) is making considerable headway as the dire water shortage has lent momentum to water treatment activities. Industrial water reuse schemes and stringent desalination requirements are further necessitating the deployment of high-quality treatment chemicals as a means to boost operational efficiency, cost-effectiveness, and environmental sustainability.
New analysis from Frost & Sullivan titled "GCC Industrial Water and Wastewater Treatment Chemicals Market" showed that the market earned revenues of $396.0M in 2012 and estimates this to reach more than $568.2M in 2017. The research covers pH conditioners, coagulants, flocculants, corrosion and scale inhibitors, biocides, and disinfectants, among other chemicals.
The focus among GCC countries to diversify into downstream industries such as refining, chemicals and petrochemicals has increased water usage as well as wastewater generation, providing significant thrust to water and wastewater treatment chemicals market.
"Tighter government regulations too will encourage companies to opt for more effective water and wastewater disposal and reuse methods, and thereby increase the demand for treatment chemicals," noted Vishnu Sankaran, Associate Director and Head-Chemicals Practice, Middle East and North Africa, Frost & Sullivan. "For instance, the Treated Sewage.
Effluent reuse policy implemented by the Saudi Ministry of Water and Electricity serves to enforce effective water and wastewater treatment in industrial areas, in turn widening market potential."
While participants will be buoyed by the effect of regulations on their market prospects, they will also be concerned about the control that a handful of companies have over major industries. Ultimately, this skewed balance of power pushes down prices of water treatment chemicals and curbs revenues.
Moreover, end users do not fully understand the advantages of high-quality, costlier treatment specialty chemicals and prefer to rely on regular commodity chemicals. Manufacturers too are reluctant to offer these advanced solutions as customers refrain from testing these products on a large scale fearing the loss of operational efficiency and reduced profitability.
"To achieve sustainable growth, suppliers must work hand in hand with end industries in the testing and selection of specialty chemicals that have a high performance to cost ratio," added Sankaran. "Educating users on the long-term environmental, operational and profitability benefits of such chemicals is also a crucial part of this process, and will ensure a steady rise in overall sales."
The GCC's water and wastewater treatment equipment market is set to reach $2B by 2016, Frost & Sullivan said in an earlier report.
The market is currently being pegged at $1.3B but is growing at a compound annual growth rate (CAGR) of seven percent over the next five years.
As economic development gains speed, Middle East governments are moving aggressively towards promoting water conservation/storage, wastewater recycle and reuse and desalination of sea water in order to meet the burgeoning water consumption needs of all sectors, the report stated.
The region has begun investing heavily in water and sewerage networks to ensure 100 percent connectivity to the growing population, it said.
Water requirements by all the three sectors - agriculture, domestic and industrial - are set to grow from 35 billion cubic meters (BCM) to 49 BCM by 2020 in the Gulf region.
Whilethe sewage collection rate in the GCC is 52 percent of the total sewage generated however, contribution of recycled water to total water withdrawal is between four to eight percent.
The industrial growth in the GCC region is expected to unfold opportunities for advanced water and wastewater treatment solutions, according to the report. Desalination is expected to continue playing a critical role in the overall water supply in the MENA region. Across the Middle East, a total of 39 million cu. m/day of desalination capacity is expected to be added between 2010 and 2020.
SOURCE: Gulf Corporation Council (GCC)