Federal Funding Cuts Create Opportunities for Private Investors in Water and Wastewater Treatment Market

Palo Alto, Calif. – January 29, 2004 –
A recently published document by the American Society of Civil Engineers (ASCE), rating the United States’ water and wastewater systems a mere “D,” has further increased attention to the nation’s water needs and infrastructure, and has created a sense of urgency about the matter.

New analysis from Frost & Sullivan (www.environment.frost.com), U.S. Water and Wastewater Treatments Market: An End-User Analysis, reveals t revenues in this industry totaled $2.03 billion in 2002 and are projected to reach $2.67 billion by 2006.

“Aging infrastructure is driving growth of the repair and replacement market, while numerous regulatory constraints create opportunities for continual upgrades and updates in treatment technologies,” says Frost & Sullivan Consulting Analyst Usha Srinivasan.

Expansion of existing treatment plants also seems likely, especially with the population growth in certain parts of the country. However, very few new drinking water systems are currently being built. This may be attributed to an amendment in the “Clean Water Act” of 1996, which does not permit approval of new water plants solely based on population growth.

Building of new systems needs to be justified by proving there is, either a significant public health risk involved, or that the existing system is unable to meet regulatory criteria.

The recent cap on Federal funding is leading many small and medium-sized municipalities, who rely heavily on “State Revolving Funds” (SRF) for expansion and rehabilitation purposes, to seek operational and financial support from private investors. Research undertaken by the Reason Public Policy Institute supports this trend by forecasting an increase in water privatization in the next 3 to 5 years.

“This presents a tremendous opportunity for those companies capable of financing and providing operation and maintenance services to attend to the repair, rehabilitation, expansion, and upgrading of the water utilities,” states Srinivasan.

Frequent mergers and acquisitions (M&As) in this market and subsequent changes in name and management are confusing customers who are unable to identify brand names correctly. In this consolidation-prone market, keeping customers informed of changes following M&As is essential for brand identification and loyalty.

In fact, customer loyalty is one of the most significant challenges facing equipment suppliers today. With the repair and replacement market offering viable alternatives to customers, many municipalities are showing a growing tendency to change suppliers.

Customers are turning to smaller companies that can provide personalized and prompt service, as well as, spare parts at lower costs. Large companies will have to proactively offer similar services such as, enhanced and customized after sales service and phone support, product training with more troubleshooting exercises, and quick response times, in order to stay competitive.

"Customers increasingly expect tailored service to meet specific facility requirements,” says Srinivasan. “Long-term partnerships and commitment to suppliers very much depend on continued high standards not only in product quality and reliability but also extended service features.”

If you are interested in an virtual brochure, which provides manufacturers, end-users and other industry participants an overview of this research, send an email to Nuha Kadri, Industrial Media Relations Executive at nkadri@frost.com with the following information: your full name, company name, title, telephone number, fax number, e-mail, and the title of the study. Upon receipt of your information, an overview will be sent to you via e-mail.

U.S. Water and Wastewater Treatments Market: An End-user Analysis is part of the Water & Wastewater Subsription and studies customers’ expectations from suppliers in terms of price, customer service, reliability, product quality, technological skills, and delivery time. It also measures customers’ current satisfaction levels, and discusses their major criteria for purchasing and supplier selection. Suppliers can accordingly evaluate their performance and formulate appropriate strategies targeted at customer retention and acquisition.

Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff, spans the globe with offices in every major country.

U.S. Water and Wastewater Treatments Market: An End-user Analysis A571

Contact:
Americas
Nuha Kadri
Media Relations Executive
P: 210.247.2440
F: 210.348.1003
E: nkadri@frost.com

Europe
Kristina Menzefricke
Public Relations Manager
P: +44 (0) 20 7343 8376
F: +44 (0) 20 7730 3343
E: kmenzefricke@frost.com

APAC
Donna Jeremiah
Public Relations Specialist
P: +603 6304 5832
F: +603 6201 7402
E: djeremiah@frost.com

The following is a list of key industry participants: ABS Global; Acquionics; Aeration Industries International, Inc.; Aerators Inc; Alfa Laval; Andritz AG; Aqua-Aerobic Systems, Inc.; Askbrook; Byron Jackson; Calgon Carbon Corp.; Cascade Machinery and Electric, Inc.; CBI Walker; DBS Bank; DMD Roots; EBARA Corp.; Environmental Dynamics Inc.; ESCO Technologies Inc.; F.W. Webb Co.; Fairbanks Morse; Fluidyne Corp.; Gardner Denver, Inc.; GE Water Technologies; GL & V/ Dorr-Oliver EIMCO; Goulds Pumps; Hach GmbH; Haywood Gordon; HD Fowler Co.; Hoffman Air & Filtration Systems; Hydromatics; ITT Flygt ; JWC ; Komline-Sanderson Engineering Corp.; Kruger A/S; KSB Inc.; Lakeside Equipment Corp.; Lemna Technologies Inc.; Madison Filter, Inc.; Mid America Water Services; Moyno, Inc.; Nash Engineering; Ondeo Degremont; Ozonia North America; PACO Pumps; Parkson Corp.; PCI Wedeco Environmental Technologies Inc.; Philadelphia Mixers; Pulsafeeder, Inc; Reliance Electric; Rex-Rim Flow; RMS Enviro Solv Inc.; Sanitaire Corp.; Severn Trent; Siemens TI; Smith & Loveless, Inc.; Somat waste Reduction Technology; Suntech, Inc.; The F.B. Leopold Co., Inc.; The Gorman-Rupp Co.; Trojan Technologies Inc.; Tuthill Pneumatics; US Motors; USFilter; Vulcon Technologies; VWR International; Wastech Environmental Services; WEDECO Ozone; Wedeco UV Systems; Wemco; WesTech Engineering, Inc.; Westfalia Technologies; Worthington Biochemical Corp.; ZENON Environmental Inc.



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