The market for water and wastewater treatment chemicals will exceed $22 billion by 2010, up from $18 billion in 2005, according to the latest McIlvaine report, Water and Wastewater Treatment Chemicals: World Markets.
Power accounts for nearly one-third of the total market. This segment is growing at a rate faster than GDP due to the need to utilize coal instead of expensive natural gas. The biggest growth will be in China. Chemical sales to Chinese power plants will more than double over the next 10 years. Coal-fired power plants utilize four times the treatment chemicals used by gas turbine plants. China plans an additional coal-fired capacity of 300,000 MW, bringing its total to 700,000 MW over the next 15 years. This will create the largest power plant chemicals market in the world. China will also show the highest percentage gains in municipal water and wastewater and in the chemical industry.
Three areas where double-digit growth will occur are metal separation, odor control and desalination. The U.S. has recently regulated the miscellaneous metal working industry wastewater discharges. This will result in total yearly treatment costs including equipment and chemicals of $2 billion. Municipal wastewater plants throughout the world are accelerating their odor control activities. Prevention of scaling on desalination membranes is a critical factor in turning seawater into drinking water.
Corrosion inhibitors will remain the largest product segment. Worldwide sales will increase from $4.2 billion this year to $5 billion in 2010. Organic flocculants will continue as the second largest category, with 2006 sales of $3.2 billion rising to $3.8 billion in 2010. Scale inhibitors are the third-largest segment. In the 2006-2010 period, sales will grow by $300 million to $3 billion.
There have been a number of structural changes in the industry, including the divestiture of the largest treatment chemicals company. A consortium of private equity firms comprised of The Blackstone Group, Apollo Management LP and Goldman Sachs Capital Partners acquired Ondeo Nalco from Suez S.A. in a transaction valued at $4.2 billion.
GE acquired BetzDearbon in a transaction with Hercules. It then purchased Osmonics. It already owned several companies with ties in water and wastewater treatment. It has positioned itself to furnish the systems, and then provide the consumables and services for those systems. The company also has monitoring capability. Since chemicals represent a large cost in many processes, accurate measurement and utilization of those chemicals is important. GE is now the second largest supplier of water and wastewater treatment chemicals.