Dec 28, 2000

New Water Regulations to Boost Membrane Sales

SAN ANTONIO -- According to strategic research conducted by
marketing consulting company Frost & Sullivan and reported in its "U.S.
Ultrafiltration, Nanofiltration, and Reverse Osmosis Membrane Element
Markets," recent changes in water regulations are expected to spur growth
in the markets for membranes used in municipal water treatment facilities.

Revenues for the total market have climbed from $202 million in 1998 to $215.3
million in 1999, with steady market growth anticipated through 2006. Many of
these regulations set limits for cleanliness that can be achieved only with
membrane filtration. As the compliance date for these regulations draws near,
demand for ultrafiltration and other types of membranes will increase

Mergers are redefining the competitive field and forcing participants to develop
new products to separate themselves from the competition. But satisfying
customer needs will not be cheap, according to Frost & Sullivan.

"With the increasing interest in using membrane filtration comes greater
demands for the capabilities of existing products," says industry analyst
Karen Rasmussen.

Customers are looking for long-lasting membranes that resist heat, pH and
chemicals, while providing greater purity and allowing for higher product
recovery. Manufacturers must devote sufficient R&D resources to meet these
membranes needs, but the cost of R&D, coupled with the trend toward
declining product prices, will squeeze the budgets of all but the largest

Meanwhile, the high costs of validating membranes for particular processes will
actually work to the advantage of some companies. Ultrafiltration,
nanofiltration and reverse osmosis membranes are often used in highly sensitive
applications, such as microelectronics, biopharmaceuticals, and foods and
beverages. End users in these industries frequently require membrane suppliers
to validate their products for a particular process to insure quality control.

"Performed on a site-by-site and media-by-media basis, validation can
represent a substantial cost to membrane suppliers and end users," says
Rasmussen. "Consequently, customers tend to stick with a supplier once they
find a product that suits the particular process."

This Frost & Sullivan study analyzes the U.S. markets for ultrafiltration,
nanofiltration and reverse osmosis membrane elements. It also includes in-depth
discussions of the markets for specific types of ultrafiltration products,
including cassette/flat sheet spiral wound and hollow fiber membranes. It
evaluates key drivers and restraints and presents expert forecasts for each

Frost & Sullivan presents 2000 Market Engineering Awards to companies that
have worked hard to make a positive contribution to the filtration membrane
element industry. The Competitive Strategy Award is presented to Hydranautics
(Nitto Denko). The Market Engineering Leadership Award is given to Koch
Membranes. The Product Line Strategy Award is awarded to Millipore.

Market participants include A/G Technology Corporation; DuPont Company; FilmTec
Corporation; Hoechst Celanese Corporation; Hydranautics; Ionics; Koch Fluid
Systems; Koch Membrane Systems, Inc.; Millipore Corporation; Osmonics, Inc.;
Pall Corporation; Pall Filtron; PTI Advanced Filtration; Rhodia; Sartorius North
America; Spectrum Laboratories, Inc.; Trisep Corporation; and U.S. Filter/Ionpure.

Frost & Sullivan is an international marketing consulting and training
company that monitors the environmental technology industry for market trends,
market measurements and strategies. This ongoing research is used to complement
a series of research publications such as U.S. Ultrafiltration, Nanofiltration,
and Reverse Osmosis Membrane Element Markets; U.S. Water Treatment Equipment
Markets; and U.S. Microfiltration Membrane Markets. This research is also used
to support customized consulting needs.

SOURCE: Business Wire