Expansion, Laws Pushing Brazil's Sludge Treatment Demand
With the rapid evolution of some industrial sectors and the introduction of tighter legislation, the sludge treatment equipment markets in Brazil are witnessing steady growth, according to new analysis from Frost & Sullivan. The market is expected to become more competitive, and opportunities have been unfolding for key participants and new entrants. As market dynamics become more complex with emerging niche demands, equipment manufacturers are striving to develop more comprehensive environmental solutions.
"Brazilian Industrial Sludge Treatment Equipment Market," finds that market earned revenues of over $31.7 million in 2008 and estimates this to reach $48.8 million in 2013.
Awareness of environmental concerns is intensifying among the Brazilian population. Companies that demonstrate environmental responsibility will derive the cutting edge over competition. With more companies treating their industrial waste to conform to legal requirements, growth for this market is expected to continue on an even keel.
"The industry is becoming aware that good environmental practices can also have an impact on the company image," says Frost & Sullivan Research Analyst Alessandra Lancellotti. "Companies, particularly the smaller ones, that were until now disposing waste in landfills without any treatment are now actively pursuing specialized services and technologies to reduce their environmental impact."
The CONAMA resolution number 357, from March 17, 2005, drafted guidelines for sludge treatment and disposal, classifying sludge according to the level of certain substances. Industrial manufacturers have largely been accommodating their sludge generation to these specified levels in terms of volume and concentration of certain harmful substances.
Although the market scenario looks encouraging, there are some factors that are clouding prospects. Both high interest rates and the high level of income taxes to the industrial sector discourage investments in the country. Trends indicate that the market will suffer a deceleration process in 2009 as a consequence of the global financial crisis. The end result is escalating financial cost of sludge treatment equipment in Brazil, diminishing the investment payback attractiveness for end-users. End users are unable to muster up funds to finance the new sludge treatment equipment because of the lack of credit in the economy.
Going forward, the market will be driven by the requirement for customized solutions. There will be more scope for new entrants with capabilities to meet technical and economic requirements from small industries.
"A promising niche for producers to focus on is providing small size equipment for smaller industries as demand for smaller equipment is gaining momentum and offers more attractive growth rates," explains Lancellotti. "Smaller industries are gaining more importance as large end users have already adapted their processes."
The service sector also offers great potential for the sludge treatment equipment market. Complete solutions such as total waste management are poised to be the next major areas of opportunity. The market is far from reaching consolidation, and there is plenty of room for efficient companies that can offer superior solutions at reasonable prices.
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