Water Treatment Chemicals Business Outlook Flat In 2009, Recovery In 2010

March 24, 2009
Industry has been surprisingly fluid, McIlvaine Co. report suggests

Power and municipal wastewater treatment are the two big markets for water treatment chemicals. These two markets will help water and wastewater treatment chemicals suppliers maintain sales at the 2008 level in 2009. The latest analysis in Water and Wastewater Treatment Chemicals published by the McIlvaine Co. reflects world 2009 revenues of $20.5 billion rather than the previously forecasted $21.3 billion.

World Water and Wastewater Treatment Chemicals Revenues in 2009 (in millions of dollars)
Activated Carbon — 541
Chelants — 483
Corrosion Inhibitors — 4,546
Defoamer — 484
Inorganic Flocculants — 2,681
Ion Exchange — 641
Odor Control — 685
Organic Flocculants — 3,514
Other — 993
Oxidizers & Biocides — 2,024
pH Adjusters — 1,110
Scale Inhibitors — 2,822

Corrosion inhibitors will maintain its lead as the largest revenue generator among the product categories. Organic flocculants will rank second with revenues of $3.5 billion. The industries least impacted by the recession are the largest markets for water treatment chemicals.

Industry Rankings in 2008
1. Wastewater
2. Power
3. Water
4. Refineries
5. Pulp & Paper
6. Other Industries
7. Oil & Gas
8. Food
9. Chemical
10. Metals
11. Electronics
12. Mining
13. Pharmaceutical

Municipal wastewater plants around the world will be the largest purchasers. The power industry will account for slightly more sales than the municipal drinking water segment. Refineries will capture fourth place in 2009.

Chemicals makers in general fared well in 2008 despite increasing raw materials costs. Decreased volume and increased costs were offset by increased prices. In the first half of the year, the suppliers were trying to increase prices fast enough to keep up with increased costs. In the second half, they were able to benefit from these increases.

The water treatment chemicals business has been surprisingly fluid in that large players have been acquired or divested by even larger companies. The most recent acquisition in progress is that of Ciba by BASF. Nalco has been thriving as a divestiture. Betz is now under the GE umbrella and subject to the indirect consequences of the GE Capital problems. There are thousands of chemical companies with regional and product niches. The industry will remain fragmented.

For more information, visit the McIlvaine Co. website at www.mcilvainecompany.com.

Source: McIlvaine Co.

Image by Burnham RNG, courtesy twentytwo & brand.