Going Global

Increasing your business in the booming world market of water and wastewater technologies

• By Ellen Bohon Zeytoun
• Jul 01, 2004

This article was adapted from the U.S. Department of Commerce's Global Water & Wastewater Export Market Plan.

Access to safe drinking water and contamination of surface water bodies is a major problem in many areas of the globe. In the year 2000, approximately 1.1 billion people (18 percent of the world's population) lacked access to safe drinking water, and 2.4 billion (40 percent of the total population) lacked adequate sanitation. Most of these people live in developing countries, predominantly in rural areas. Over one-third of the urban water supplies in developing countries operate only intermittently, while roughly 40 percent of the drinking water supply is lost due to leakage in the distribution systems.

At the same time, countries have come to recognize that an adequate supply of clean water and effective wastewater treatment is essential for sustainable development. Governments and organizations around the world are investing substantial sums in water and wastewater improvements. These expenditures create real opportunities for U.S. companies to export water and wastewater equipment technology.

Today, it is estimated that only 66 percent of wastewater is treated in Europe, 35 percent in Asia, 14 percent in Latin America, and almost none in Africa. Many important water bodies throughout the world are in violation of local water quality standards. More than 35 percent of drinking water supplies in Africa are contaminated in violation of national health standards, 21 percent in Asia, and 18 percent in Latin America and the Caribbean.

The principal constraints to the development of the water supply and sanitation sector are funding limitations, inadequate cost recovery, and inadequate operation and maintenance. As water sources become contaminated, increasingly effective and costly treatment methods are required. The lack of access to water for drinking and industrial uses, as well as to wastewater treatment, is thus a major limitation to sustainable development.

The incentives for improving water and wastewater infrastructure in developed countries are primarily regulatory, whereas in developing countries, the driver is public health: 2.2 million people, most of them children, die there every year from diseases associated with the lack of safe drinking water, inadequate sanitation, or poor hygiene.

As a result, the global water market has been growing rapidly over the last decade and constitutes well over a third of the global environmental market. This article aims to engage more water and wastewater technology firms in exporting their products overseas by providing a background on overseas markets and presenting U.S. Department of Commerce programs available to help companies take advantage of opportunities overseas.

Global Market Size and Characteristics
The global market for water and wastewater equipment and chemicals was estimated at $47 billion in 2001. Water-related services also represent a significant share of the $77.1 billion (2001) consulting and engineering market.

The United States, Western Europe, and Japan represent over 80 percent of the total market size, but those are mature markets with an average growth of 3 percent to 4 percent. At the same time, the economic recovery of emerging markets in Southeast Asia and Latin America from the 1997 crisis, rapid expansion of the Chinese economy, and broadening demand in the Middle East promise a return to the 10 percent to 20 percent pre-1997 market growth in the developing world.

With assistance from international donors, public sector agencies in developing countries, particularly in Asia, have launched multi-million-dollar spending programs in water supply and sanitation, and are encouraging private sector investments. The proportion of industrialized countries' development assistance devoted to water supply and sanitation increased steadily from 1986 to 1996, rising from 3.4 percent to 6.6 percent of total assistance. In terms of cash, bilateral commitments from industrialized countries for assistance to developing countries in this sector rose from $1 billion in 1986 to $2.9 billion in 1996 (these numbers do not include France). In absolute terms, Germany and Japan's donor funding was particularly large: Germany spent nearly $3.4 billion, while Japan invested $9.5 billion.

The Market in Industrialized Countries
The water and wastewater equipment markets in industrialized countries, including the United States, comprise roughly 80 percent of the global market, or approximately $34 billion a year. The U.S. market for water and wastewater equipment accounts for about half of this amount -- $17.1 billion in 2001 (Environmental Business International, 2003). However, these markets are growing slowly, and the demand is mostly satisfied by existing suppliers.

This article originally appeared in the 07/01/2004 issue of Environmental Protection.