wwwt market research part 1

7/28/2019 WWWT Market Research Part 1

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1.Water & Wastewater Treatment Market Research

2.1 IntroductionIndia is facing water demand supply gap issue and is expected to face water scarcity condition in

future. As per the various research reports, there is going to be huge demand supply gap in 2050.

Per capita water availability is decreasing due to various factors such as increasing population,

depletion of ground water, migration of population from rural to urban areas. Many regions in India

are facing water scarcity due to low level of ground water and surface water. By 2050, Per capita

water availability will decrease to 685 bcm from 977 bcm in 2010.

Water demand in India is projected to rise due to growth in following dependent factors:

Increase in Urbanization: India will have 68 cities with population more than 1 million by

2030.

Increase in Industrialization: Expansion of water intensive industries like power, Iron &

Steel, Chemical will increase water demand in future.

Depletion of groundwater level: Groundwater level in the Ganges basin is projected be

depleted by 50-75% by 2050. Groundwater levels in the Krishna, Kaveri and Godavari basin

are projected to be depleted by ~50% by 2050.

Water demand is projected to reach 1069 bcm in 2050 from 656 bcm in 2010. Irrigation sector ishighly water intensive sector and constitute major portion of water demand followed by water for

household use and Industrial sector respectively.

Water Scarcity*

Fig 1: Per capita water availability projection (in bcm)

* Per capita availability below 1000m is termed as water scarcity condition


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2.2 WWWT Market OverviewIn 2011, market size of water & wastewater treatment market was estimated to be 93-98 INR Billion

and is growing at CAGR of 14%. Out of this, water treatment market constitutes 40% (37.2-39.2 INR

Billion) of the market.

Industrial & Municipal segment accounted for 90% market share in 2011 in both water and

wastewater treatment market. Indian water treatment market is highly fragmented with presence

of ~ 900 players and top 15 players accounts for 30% market share. Large players are mainly

dominant in Industrial and Municipal segments which are capital intensive. Focus sectors for large

players includes industrial segments like Power, Oil & Gas and large municipal projects. Medium

players dominant in all segments which includes typically light industrial & commercial segments.

Small players are dominant in commercial & residential segments and focus sectors include

hospitals, hotels & SEZs.

Players Type No of Players Sales (INR Billion) Players

Fig 2: Water demand projection (in bcm)

Fig 3: WWWT Market Size projection (in INR Billion)


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Large Players 15 33-36 (30%) VA Tech Wabag, Ion Exchange, Thermax

Medium

Players

200-250 55-58 (50%) Fontus, Aqua Tech, Doshion Veolia, Chembond

Ashland

Small Players 600-650 22-25 (20%) Brisanzia, Akar Impex Pvt. AastoPure

2.3 Project EconomicsAverage project cost for an integrated wastewater project is about 16-20 INR million/MLD.

Additional 0.8-1.3 INR Million per year for 1 MLD plant is incurred as operation and maintenance

cost. Cost breakdown incurred in typical wastewater project in industrial and municipal sector isgiven below:

Collection Cost: Collection of sewage from households/industries and transfer to treatment

plant. Greater the distance between those two points, higher will be the cost. Typically

constitute 50-60% of total project cost.

Treatment Cost: Treatment cost involving primary and secondary treatment constitute 30-

40% of total project cost. Adding tertiary treatment increases cost by 10-20%

Disposal Cost: Unusable treated wastewater is disposed off to nearby river. This constitutes

3-5% of total project cost.

Average project cost for an integrated water supply project varies between 25 INR Million/mld to 30

INR million/mld. Operation & maintenance cost accounts for 3-5% of the total project cost. Cost

breakdown incurred in typical water supply project is given below:

Collection Cost: Collection of raw water from the source (river/lake) and transfer to the

treatment plant. Constitute 25-35% of total project cost

Treatment Cost: Raw water undergoes a 3-step treatment process. Constitute 15-20% of

total project cost

Storage Cost: Treated water is transferred to a storage tank. Constitute 15-20% of total

project cost

Distribution: Water is distributed to households/business. Cost is directly proportional to

distance between storage tank and households. Constitute 25-40% of total project cost

2.4 Government Initiatives

Rising water demand and depleting water groundwater level has forced the government to adaptvarious measures and implement strict regulation to preserve groundwater level and also ensure

* Large Players Revenue > 1000 INR Million, Medium Players Between 1000-100 INR Million, Small Players < 100 INR Million


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availability of water for households. Government has drafted National Water policy 2012 to manage

the water resources. Under this policy, water is treated is economic good and water management is

done through common pool community resources.

Indian government also has implemented National Water Mission (NWM) to increase water

efficiency by atleast 20%. This step is expected to result in growth of urban water & wastewater

market due to focus on recycling of water. Residential buildings will have sewage treatment and

recycling plant. Various government schemes are implemented for urban infrastructure

development such as Jawaharlal Nehru National Urban Renewal Mission(JNNURM) under which till

date project worth 421 INR Billion has been sanctioned in water sector which includes water supply,

sewage treatment, water preservation.

Government Investment Plan

Government spent INR 1207 Billion under 11th

5 year plan on water & sanitation sector and is

planning to spend INR 2549 Billion under 12th

5-year plan. Government related projects contributemore than 50% revenue generated by water & wastewater treatment sector and rest by private

sector.

2.5 Market AttractivenessCommercial & Residential sector is expected to experience higher growth in comparison with

industrial & municipal sector. Growth in commercial & residential sector is expected to be 25%.

Municipal sector market is organized due to presence of big players. Industrial sector is fragmented

with no clear market leader. Commercial segment is fragmented and unorganized due to presenceof many small players in this segment. Implementation time, the time required to setup plant, is

605 INR Bn.(Spent) 1207 INRBn. (Spent) 2549 INR Bn.(Projected)

5

Year Plan spending & projection comparison (in

INR Billion) 12th

5 Year wise projection (in INR Billion)


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typically higher in municipal sector due clearance and approval required from multiple government

authorities and large amount of investment involved in these projects.

Factors Municipal Industrial Commercial Residential

Market Size

(INR Billion)

36.75 45.57 7.35 3.43

Growth 15% 20% 25% 25%

Profitability Low High Medium Medium

Market

Structure

Organized, Big Players

(Indian & Global)

present

Fragmented, No

clear Market leader

Fragmented and

unorganized

Big

established

players

Project

Implementation

Speed

Low High Medium High

2.6 Opportunities & Key Drivers

Opportunities

Water & Wastewater treatment is fast growing market with lots of opportunities coming up due to

various factors involved:

Transition from chemical treatment to MBR: Membrane market is expected to grow at 10-

12% fueled by growing demand for water. Membrane based technology extensively used in

industries like pharmaceutical, petrochemical refineries, Chemical, Food & Beverages, Power

and Textiles

Zero Liquid Discharge : Due to strict regulation of government regarding discharge,

Industries and manufacturing units are adapting advanced technologies like zero liquid

discharge system to avoid water pollution

JV between Indian & Foreign Players: Many foreign players are entering into Indian market

through JV with Indian players. Bluewater Bio International(UK) to enter into Indian water

industry through collaboration with Tatva Global Environment Ltd. SpainsAqualia plans to

enter into Indian market and looking to bag contract worth INR 5500 Million


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Key Drivers

Rapid Urbanization: Increasing per water consumption due to population growth led to

increase in water demand.

Growth of end users sectors : Expansion of water intensive industries like power, iron &

steel, chemical , petrochemical which comprised more than 50% of industrial water

treatment market to increase water demand.

Scarce groundwater: India uses ~230 Km3

of groundwater per year. Groundwater level in

Ganges basin is estimated to be depleted by 50-75% and Krishna, Kaveri and Godavari basin

to be depleted by ~50% by 2050.

Tax break: Proposed 10 year tax break for industries to save water and reduce dependence

on ground and surface water resources.

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