MOUNTAIN VIEW, Calif. — The North American industrial water and wastewater treatment chemicals market has always been fragmented, with both global and regional participants vying for market share. According to a new report from Frost & Sullivan, to stay afloat, participants have evolved from merely supplying chemicals to providing a more integrated solution that includes services and equipment.
The report, North American Industrial Water and Wastewater Treatment Chemicals Markets, finds that the market earned revenues of $2.03 billion in 2011 and estimates this to reach $2.79 billion in 2018. Despite the emergence of alternative modes of water treatment, chemicals will continue to dominate the landscape due to its cost effectiveness, analysts note.
"The present economic conditions in North America are not conducive for industries to invest heavily in equipment or infrastructure," Frost & Sullivan Senior Research Analyst Deepak Karthikeyan says. "Thus the lower cost and higher performance of chemicals place them at par with the best available technology for treating water."
With freshwater resources depleting and governments stressing the need to conserve and reuse water in industrial processes, end-users are turning to treatment chemicals, notes the report. The market’s potential has attracted numerous participants, escalating competition not only among chemical manufacturers, but also among various value-chain participants that sell solutions. Consequently, some segments in the market have become commoditized, placing pressure on companies to reduce prices to meet customer expectations.
Considering the price sensitivity of the market at present and depressed demand, low-cost imports from Asia also pose a threat to the local manufacturing base in certain segments, Karthikeyan notes. "Companies have to increasingly focus on differentiating themselves through product development and innovation in niche segments rather than compete on price. To maintain their dominance, domestic manufacturers need to leverage their advantages such as product quality, strong R&D capability, broader product line, superior customer service, and long-term partnerships with service companies.".