Industrial Water Treatment North American Study

Transcription

1 Industrial Water Treatment North American Study Finpro Canada: Tuomo Laine, Johanna Tarvainen, Sarianne Lehto Finpro Houston: Michael Lovejoy, Anne Wilkins

2 Methodology North American study 1. General desk study to understand the industrial wastewater treatment market 2. Identified trends and drivers in industry segments (pulp & paper, oil & gas, mining, food processing) 3. Created a long list of companies in the US and Canada involved in wastewater treatment (n=89) and categorized them into groups: Operators/developers Engineering consultants EPCM contractors System suppliers Technology/equipment suppliers Chemical suppliers 4. Interviewed short listed companies from this long list 5. Used desk study and interview finding to highlight key trends, developments and explanations of different business models used in North America (See separate Word document for longer report with appendices) Finpro 2

3 Shortlisted companies interviewed Operator Severn Trent Services System Suppliers Environmental Dynamics Inc. GE GLV Idex/ADS ITT Maverick Technologies Pall Samco Technologies, Inc. Siemens Veolia EPCM Contractors CDM CH2M Hill Engineering Consultants Aecom Stantec Technology Suppliers ACME BioteQ Environmental Technology Harrison Western Koch Membrane Systems, Inc. Komline-Sanderson Rockwell Automation Finpro 3

4 Examples of North American companies operations in Russia Own Office/Subsidiary Other Company Representing (e.g. partner or distributor) Aecom CH2M Hill Degremont Endress Hauser GE Water & Process Technologies GLV Rockwell Automation Siemens Veolia Control Microsystems Inc (PLC Systems Corporation) EDI (Septek, of HyXo Oy; EDI representative in Finland, Russia, Estonia, Latvia, Lithuania, Ukraine & Belarus) Idex (Pulsafeeder) (Paters Group Ltd.: industrial); Bridgemere UK (White Derek: industrial & water treatment) ITT (Goulds Pumps; Vogel, ITT WWW) Mavrick Technologies (Insist Avtomatika LLC) Pall (Döhler, Filtermedia) & Representative (Pall GmbH office) Rotork (Azimuth Engineering Ltd) Severn Trent De Nora Finpro 4

5 2. Trends & developments General trends, challenges and developments identified in North American industrial wastewater treatment markets Finpro 5

6 Challenges faced by water-using industries from GE Water & Process Technologies Finpro 6

7 Need for sustainability Total water costs are increasing in unexpected ways. Business disruption risks are growing. Current water allocations are not assured into the future. Customer expectations related to water use and impacts are evolving. Businesses license to operate and ability to expand are increasingly tied to water-related performance. So rather than just wastewater treatment, the aim is for zero waste or zero liquid discharge and for all resources to be recovered from wastewater wherever and whenever possible. Finpro 7

8 Embracing total water management Progressive industries and companies are taking a total scope approach to good water stewardship, tracing water inflows and outflows at every step in their complete value chain. Wastewater re-use or water reclamation is incorporated into total water management this is driven by cost of water (primarily) but also by sustainability (water footprint), which will set higher requirements for purification technologies The aim is toward water use minimization and energy efficiency in operations through efficiency and re-cycling both horizontally and vertically (e.g. reaching energy-neutral wastewater) Finpro 8

9 Progressive companies are forerunners in showing how the wastewater end market is likely to develop Water management driven Short cutters Forerunners Laggards Good corporate citizens Complying with regulations Finpro 9

10 Example: The Coca-Cola Company Water Neutral: Setting an aggressive water sustainability goal Greg Koch, Managing Director, Global Water Stewardship Finpro 10

11 Market developments: industrial wastewater treatment value chain Trends and developments organized into the following segments: Industry Industrial end-client side developments Operations Operations side developments Suppliers Supplier side developments Finpro 11

12 Project Scope Supplier market Operations/ After market Industrial end-clients Construction Onsite facility Food Technology Products & Chemicals Standard Components System Suppliers EPC Contractors Engineering Consultants / Services Operation Contract Operators Municipal WWTP Public Private Partnership Contract Operator Pulp & Paper Mining Oil & Gas Regulations, permitting, enforcement, penalties/incentives Finpro 12

13 Industry side needs and trends (water using industry) Adopting a total scope approach to good water stewardship Reusing water from effluent treatment system to industry processes Managing risks associated with bringing the water back into the industry process Reducing effluent discharges, thus reducing disposal treatment costs Creating revenue from waste or developing beneficial use opportunities from waste materials Reducing energy consumption Collaborating with other industries Finpro 13

14 Operations side needs and trends Outsourcing New players are emerging in the value chain or the role of existing players will change, economies of scale can be applied, different wastewaters can be mixed to obtain an optimal and consistent quality of water, etc. In the U.S. industrial water treatment market, annual spending on a wide variety of outsourced services is estimated to be between $250 and $300 million and growing rapidly. With increasing frequency, companies in the industrial market are finding that outsourcing components of their utility operations enables them to concentrate resources on their core business. The results are a more cost-effective operation, reduced overhead and enhanced regulatory compliance Public Private Partnerships Especially prevalent in municipal wastewater treatment facilities but also growing in e.g. industrial site cleanups Finpro 14

15 Some companies are focusing on contract operating, such as Severn Trent Services How do contract operators compete? Finpro 15

16 Case example: Severn Trent Services Finpro 16

17 Case example: Severn Trent Services Finpro 17

18 Supplier side needs and trends Examples of how suppliers in the water industry are solving their clients problems (GE Water & Process Technologies) Finpro 18

19 Supplier side solutions (GE Water & Process Technologies) Finpro 19

20 Supplier side emerging aftermarket Aftermarket Many key players show increasing interest in the after market (similar development has taken place in many other industries) They see the after market less competed and more profitable (also continuous cash flow vs. project business) Brand loyalty plays an important role in buying decisions In contrast to traditional EPC contractors to own and operate WWTPs, a new group of contract operators has emerged whose expertise lies in the operation business Opportunities for cost of ownership -type of business models gain foothold as the emphasis shifts to life cycle cost control from investment costs Finpro 20

21 Supplier side needs and trends Creating revenue from waste (e.g. sludge or acid drainage) The goal is to make a revenue-generating byproduct e.g. sludge that can be converted into energy or metals extracted from discharge. In the US, there is more appreciation of the technologies required to capture this energy source. Sludge management practices as an emerging focus when used as an energy source. Denmark is now putting tax incentives in order to use sludge as an energy source. However, there are greater restrictions and some bans being placed on the use of sludge on land applications (e.g. fertilizers) because of perceived health risks to soil, vegetation, animals and man. Finpro 21

22 3. Changing value chains and business models Emerging, developing, prevailing business models Finpro 22

23 How do the major system suppliers compete? It seems that the major system suppliers are building their strategy upon success factors like: Building and acquiring a comprehensive and complementary portfolio of technologies consolidation very prevalent in both system suppliers and consulting companies Building on well known component/equipment brands Covering the whole water life cycle from intake to discharge Having a local presence in key markets Emphasizing the after markets and their ability to serve the end client during the operation phase Global sourcing to secure cost competiveness Finpro 23

24 Consolidations/Acquisitions Consolidations & acquisitions have been prevalent over the past 10 yrs. Example of horizontal integration = GLV Finpro 24

25 Example of vertical integration = Siemens Large systems suppliers have a wide range of offering, founded on many acquisitions. E.g. Siemens purchase of U.S. Filter enables it to offer everything, now including engineering & construction. Finpro 25

26 Case example of major system supplier ITT Water and Wastewater Category Equipment, technology and system supplier Industry focus What do they do? How are they unique? Wide industry focus, present in all major wastewater treatment segments. ITT Water & Wastewater is the world leader in transport and treatment of wastewater, operating in 140 countries across the world. The company provides a complete range of water, wastewater and drainage pumps, equipment for monitoring and control, units for primary and secondary biological treatment, products for filtration and disinfection, and related services. ITT s strength lies in the after market segment (43% of revenues). In addition, 70% of ITT s distribution is direct, and the company is a fore-runner in innovation and adjacencies. ITT s product range includes a number of brands wellknown throughout the industry, e.g. Flygt pumps. Finpro 26

27 Case example of major system supplier GLV Water Treatment Group Finpro 27

28 System suppliers with narrow industry or technology focus how do they compete? Understanding the client need, providing a tailored system solution for a client s specific wastewater problem Partnering with complementary players in the value chain (local presence, global sourcing, integrators, engineering consultants, EPC contractors etc.) Unique business model Finpro 28

29 Case example BioteQ Environmental Technologies Category Technology suppliers & DBOO of onsite treatment plants (design, build, own, operate) Industry focus Mining What do they do? How are they unique? Water treatment company that can build, own and operate water treatment plants to treat acid drainage or acid wastewater from mines. Their technology recovers metals individually from a mix of heavy metals in acid discharge metals which can then be sold to create revenue and also treats the water for discharge back to nature for reuse. Creates new revenue from what otherwise would be waste. BioteQ was awarded the 2009 Environmental and Social Responsibility Award by the PDAC (Prospectors and Developers Assoc. of Canada), which recognized their water treatment systems that reduce the environmental liability associated with mine wastewater. Finpro 29

30 Case BioteQ, technology focus Finpro 30

31 Case example EDI Category Industry focus What do they do? System supplier (narrow technology focus) Diffused aeration technologies EDI specializes in the research, development, and application of advanced technology aeration and biological treatment solutions for municipal and industrial water and wastewater treatment. EDI s focus on partnerships and value solutions supports new plant construction, existing facility upgrades, and infrastructure maintenance. How are they unique? EDI offers a Key Account Program to support the marketing and sales activities of firms serving the wastewater treatment industry with engineering, design, consulting and/or contracting services, as well as OEM manufacturers. The Program allows Key Accounts to fully utilize EDI s strengths in diffused aeration technologies, aeration system design, and biological system options. This enhances the Accounts capabilities to serve their customers, and abilities to compete in the global marketplace. Finpro 31

32 Positioning of the key suppliers in the wastewater value chain (preliminary) Horizontal integration Wide customer base/ Wide technology base Rockwell Automation ITT GE Siemens GLV Narrow customer base/ Narrow technology base Myriad of niche players EDI BioteQ Vertical integration Wide service scope whole water life cycle Finpro 32

33 Technological opportunities in the wastewater treatment market Opportunities for sustainable water and wastewater treatment technologies are growing quickly in key areas such as: energy efficiency higher levels of energy and treatment efficiency waste reduction protecting sensitive ecological habitats and wildlife and reducing the carbon footprint of treatment facilities cleaner waste chemical free wastewater treatment resource recovery for new revenue source water reuse and recycling in order to decrease discharge/sewer fees generation of renewable energy biogas generation from wastewater treatment) Finpro 33

34 4. Conclusions, recommendations When seeing wastewater as part of a total water management approach in a time with stricter regulations, successful companies are able to offer value added services and embrace a more consultative approach rather than purely a technological focus.. To be completed with DuO project team after discussion Finpro 34