Market Study Identifies Water Treatment As Key Market For Biocides In China

A burgeoning market for specialty biocides has developed along with the growth of China's industrial base, both for domestic use and for export. A key sector of this market is water treatment applications, including cooling water, papermaking, recreational water and oilfield applications.

These end uses for biocides could represent a lucrative source of growth for multinational chemical companies that are able to compete effectively with domestic suppliers, according to a recently published market study by Kline & Co., a management consulting and market research firm serving clients worldwide in the chemicals and materials, consumer products, life sciences, and energy sectors.

For example, in the United States, specialty biocides used in recreational water account for around $400 million and represent one of the largest market segments globally for specialty biocides. In China, biocides like chloroisocyanurates that are used in swimming pools account for less than $10 million. But this segment is growing rapidly with a boom in new construction, and a large percentage of counties in China that do not currently have public swimming pools have plans in place to build them.

"The Chinese market for water treatment biocides is much smaller than in the U.S. or Europe, but it's growing at a much faster rate," said Gillian Morris, industry manager for the chemicals and materials practice in Kline's research division. "A multinational would face several challenges in entering a market space filled with low-cost domestic suppliers, but they might find it worth the effort to establish a foothold now, considering the growth potential."

Kline's study, Specialty Biocides 2004-2005, Volume I: China, pegs growth for specialty biocide use in all water treatment applications in China at more than 5 percent a year over the next five years. When oilfield applications are removed from the equation, the forecast growth rate for this segment is even higher.

Biocides added to cooling water used in industrial plants and factories represent the largest end use in the water treatment sector. Estimated by Kline at $20 million, or about one-sixth of the U.S. market, this segment will continue to expand with China's aggressive rate of industrial production.

"On the face of it, the Chinese market shows higher growth potential than the United States and Europe, and there are similar biocide products in use," said Eric Vogelsberg, senior vice president and head of Kline's chemicals and materials consulting practice. "But the question remains for companies how to enter a market that is dominated by local producers that sell generic products at low price points."

The first volume of Kline's global series, Specialty Biocides 2004-2005, focuses on the market for biocides in China and provides consumption estimates for leading product types by volume and value, as well as a five-year outlook. End uses in the industrial preservation and water treatment application sectors are examined in detail, and leading local and multinational biocides suppliers are also profiled.

Other volumes in the series will cover the United States, Western Europe and Japan. For more information on the study series, go to

This article originally appeared in the 07/01/2005 issue of Environmental Protection.

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