Markets

Fascinating Trends In The Water Industry And The Companies Poised To Gain From Them

Mamta Badkar

2011-05-25T17:12:00Z

With global water consumption doubling every 20 years, its no surprise that the $450 billion water market has seen rapid innovations.

An increasing number of companies are turning to water reuse, desalinating water, and implementing new technology that makes its economical. The industry is also consolidating merging manufactures with service providers. And the the trend is picking up around the world.

A new report by Citi Investment Research & Analysis has culled key trends to look for in the water market, and the companies levered to the trends.

Membranes are displacing chemicals in water treatment

Advances in filtration membrane technologies have been displacing chemical treatment systems. The membrane water treatment market is expected to grow from $1.5 billion in 2009 to $2.8 billion in 2020.

Top companies: Dow FilmTec, Pall, GE, Pentair, 3M, Koch, Siemens

Source: Citi Investment Research and Analysis

Forward osmosis is the new form of desalination

Forward osmosis uses a semi-permeable membrane to separate water from dissolved solute and relies on natural pressure. It's also a greener option and doesn't consume as much energy as reverse osmosis that relies on pressure from highly engineered pumps or turbo changes.

Thr question however is will the technology be scalable beyond the realm of science experiments.

Top companies: Hydration Technology Innovations, QuantumSphere, and Oasys Company

Source: Citi Investment Research and Analysis

Ultraviolet light disinfection is replacing chlorine

20% of North American wastewater treatment plants use UV technology. Ultraviolet light neuters parasites in water, but the effect only lasts as long as the water is passing through th e UV light.

Top companies: Danaher, ITT and Calgon Carbon

Source: Citi Investment Research and Analysis

Chinese competition in high-tech sectors like filtration is growing

There has been increased Chinese and Asian competition in higher-end of water products and services. While the companies previously focused on low-end infrastructure products like pumps and valves they are now venturing to sectors such as filtration.

This boom has stemmed from an attempt on the behalf of the National People's Congress to increase the access of safe drinking water to China's rural population.

Top companies: Hyflux, Epure International, Shanghai Industrial, Beijing Capital, Kurita, Doosan Heavy Construction, and Nitto Denko

Source: Citi Investment Research and Analysis

There are growth opportunities in water efficiency products

dry cooling — Dry cooling technology from SPX at a power plant outside San Francisco Citi Investment Research & Analysis

Water efficiency products include bio-gas recovery systems, water meters that could help companies gain from water footprint initiatives, ultrasonic sludge pre-treatment, pipe rehabilitation and relining systems, and water derivative products like water-free toilets.

Top companies: Badger Meter, Itron, Roper, Insituform, Geberit, Falcon Waterfree Technologies, and SPX

Source: Citi Investment Research and Analysis

Point of use treatment is becoming more popular

A critique of municipal water systems is that once clean water gets contaminated as it travels through old pipes and is exposed to contaminants.

Top companies: Pentair, Culligan, 3M, Siemens, Eco-Water Systems, Kinetico, and BWT

Source: Citi Investment Research and Analysis

Distinction between water service and equipment providers has been blurring

The competition to land big water, wastewater, and desalination construction projects requires a bidding process on the basis of the build, operate and transfer (BOT) arrangement. Now equipment manufacturers and service providers are partnering to build desalination plants or companies are branching into both segments.

Top companies: Veolia, Suez, Hyflux, and IDE

Source: Citi Investment Research and Analysis

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