Sustainable Water Treatment Technologies in

the 2020 Global Water Market

Investor Briefing: Water- An attractive investor opportunity

Tuesday, 15 May 2012

By
Fredrick Royan
Research Director, Global Environment (Water) Markets
Email: [email protected]
Agenda

About Frost & Sullivan and the Global Water Market Practice

Headline date of the Global Water Market Key Drivers and Segments

Global Water Design. Build and Operate (DBO) Market

Global Water and Wastewater Treatment Equipment Market

Prospects by Regions and Hot-Spot Verticals and Tech Segments

Smart Water Grid Market

Global Ballast Water Treatment Systems Market

Last Word 3 Big Predictions for Global Water Markets in 2020

2
The Frost & Sullivan Story

Pioneered Emerging Market Partnership Relationship Visionary Innovation

& Technology Research with Clients

Global Footprint Begins Growth Partnership Services Mega Trends Research

Country Economic Research GIL Global Events CEO 360 Visionary Perspective
Market & Technical Research GIL University GIL Think Tanks
Best Practice Career Training Growth Team Membership GIL Global Community
MindXChange Events Growth Consulting Communities of Practice

3
Our Industry Coverage Industrial Convergence

Automotive
&
Transportation

Aerospace & Defense Measurement & Consumer Information &

Instrumentation Technologies Communication Technologies

Automotive Energy & Power Environment & Building Healthcare

Transportation & Logistics Systems Technologies

Minerals & Mining Chemicals, Materials Electronics & Industrial Automation

& Food Security & Process Control

4
 F&S Coverage along the Value Chain of the Water
Industry
F&S Research Business Units and Domain Expertise
Cities, Municipalities, Water Utilities & Services, Smart Water Grid/Metering and Indl. Water & Wastewater Management
Operation & Maintenance
Water & Wastewater Treatment Technologies
Environment(Water) &
Building Technologies Design Engineering and Consulting Services
Chemicals used in Water and Wastewater Treatment Municipal & Industrial
Chemicals used in Sludge Treatment
Materials used in Water Infrastructure and Piping
Chemicals, Materials & Food Materials used in Building and Construction
Pumps, Motors, Drives, Valves, Controllers, SCADA, Machine Control

Industrial Automation Distributed Control Systems, PLCs, Controls, Advanced Process Control, MES, MRP, etc
& Process Control
Communications Infrastructure Systems & Software

Communication Services, Contact Centers, Digital Media, Enterprise Communication, IT Services and Applications, Mobile and
Information & Communication Wireless Communications, Network Security, Space and Communications
Technologies

Frost & Sullivan Expertise and Coverage Along the Value Chain of the Water Industry and Market Segments

Process Control & Automation Cities, Water

Utilities & Services
Design Engineering & Operation
Construction Materials Chem
Consulting Services & Maintenance Industrial Water &
Wastewater
Treatment Technology Supply management

Smart Water Grid

5
 Global Water Market
Headline Data and Drivers
Total Global Water Market Value

Construction

across the value

Technical engineering & design

Key activities
Operations & maintenance

chain
$ 425* Billion Chemicals supply
Technology/equipment supply
R & D and piloting
Water management
Key Global Water Growth Drivers

International Rapid
Population Carbon
Agencies Growth & footprint
Social & Economical
Political & Financial

Urbanisation

Ecological
Environment Storm/Flood
Protection Water Quality &
water
Agencies Public Health
Management

Water Supply &

Business & Sanitation
Financial Needs of Water
Agencies
Remote Stress/Droughts
Note: At present this does not include Smart Water Grid Market revenue estimates Communities

6
Global Water Market by Utilities, Services, Technology
Solutions and Chemicals
Global Water Market $425 Billion Water & Wastewater Solutions and Services $180 Billion
Operation Services
22% Solutions
(Chemicals,
W & WW Treatment
Maintenace & Equipment,
Utilities Monitoring Services Process
58% W & WW 14% Equipment and
Solutions Pumps
Design / Consulting
& 8% $65 Bn
Build & Service 36%
Services
42% $115 Billion Build /
Infrastructure
64% 21%

Chemicals $15.00 Billion Treatment Equipment $34.59 Billion

Corrosion & Other

Scale Inhibitors pH adjusters and W&WW
Softeners Sludge Filtration &
16% Treatment
14% Purification
14% 55%
Biocides &
Anti-foaming
Disinfectants
Agents
22%
5%
Chemicals Biological
Activated 23% WWT
11%
Carbon
Coagulants & Treatment Membranes
12% Disinfection
Flocculants Process Equipment 15%
5%
31% 54%
Control
Equipment
(Valves,
Monitoring,
Controls)
Process Equipment & Pumps 8% Pumps
$15.00 Billion 15% Source: Frost & Sullivan

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 Global Water Design, Build & Operate (DBO) Market

Operate Build/Infrastructure Design/Consulting

200.00

180.00

160.00

140.00
CAGR 2010-2020
CAGR 2010-2020
8.6%
8.6%
$, Billions

120.00
CAGR 9.3%
100.00
CAGR 7.8%
80.00
CAGR 10.4%
60.00

40.00

20.00

0.00
CAGR 5.1%
2007
2010
2020
CAGR 5.5%
Top DBO Companies

North America Latin America Middle East & Africa Europe Asia Pacific
TETRA TECH INC. SUEZ ENVIRONMENT SUEZ ENVIRONMENT SUEZ ENVIRONMENT CH2M HILL
VEOLIA WATER VEOLIA WATER VEOLIA WATER VEOLIA WATER SUEZ ENVIRONMENT
SUEZ ENVIRONMENT CH2M HILL AECOM ATKINS VEOLIA WATER
CH2M HILL BLACK & VEATCH MOTT MACDONALD AECOM AECOM
AECOM LOUIS BERGER ATKINS REMONDIS AQUA REMONDIS AQUA
Source: Frost & Sullivan

8
Global Water & Wastewater Treatment Equipment Market,
2010 to 2015

Water & Wastewater Treatment Equipment Market:

Growth Forecasts for Total Market, Municipal and Water & Wastewater Treatment Equipment Market: Revenue
Industrial Segments (World) 2010-2015 Trend by Technology Segments by Regions (World), 2010

14.00

Equipment Market CAGR 2010-2015 12.00

2010
0% 10%

Revenues ($ Billion)
10. 00
Ind Sludge
8. 00 Mun Sludge
TOTAL 100% $34.59 Bn 7.5%
Ind WW
6.00 Mun WW
Ind Water
Municipal 61% $19.63 Bn 7.8% Mun Water
4. 00

Industrial 39% $14.97 Bn 7.1% 2.00

0. 00
West Europe East Europe North America Latin America ME & Africa APAC
& Caribbean

Note: All figures are rounded . Source: Frost & Sullivan Source: Frost & Sullivan

Rapid increase in populations both in developing countries as well as major urban centres
Lack of freshwater resources is less of a region specific issue and fast becoming global
Ageing water & wastewater infrastructure of the developed regions coupled by increasing stringent
legislation

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 2020 Mega Trend: Sustainable Water Treatment Solutions
Technology Roadmap
1980 1990 2000 2011 2020

Integrated Water Management &

Material, Resource & Smart Water Solutions
Thermal
Energy Recovery
Desalination
Bio Solids Water Needs of Developing Countries
Evolution of Advanced
Management
Water Turnkey WW Treatment Storm water Management

Services
Solutions (ex. Nutrient removal)
Management Retrofit, Replacement & Upgrading
Technologies Service Re-Use &
Membrane
and Solutions Outsourcing Recycling Chemical free treatment
Technology
Ballast Water Treatment
RO Desalination
Treatment Systems for
Worldwide
Small Communities
Sanitation

Water & Wastewater Water Water Re-Use Sustainable/Low-Carbon

Treatment Management & Recycling Solutions & Services
The market message and responsesample of companies equipped with a sustainable solution and/or service

10
2020 Mega Trend: Membranes Fuels Growth Momentum
Revenue Forecasts by Key Technologies
Water & Wastewater Treatment Equipment Market: Revenue Forecasts by Key Technologies (World), 2010-2015

Total Market Segmented by Technology (Total Global Market Size in 2010 = $34.59 billion)
$ Billion Market CAGR 2010-2015
Share (%) Low (<5%) Med (5-8%) High (> 8%)
Membrane Bioreactors (MBR) 0.7 1.9 Very High
RO 1.8 5.1 High
MF 1.0 2.8 High
UF 1.2 3.5 High
NF 0.4 1.3 Med
UV 0.5 1.6 High
Ozone 0.1 0.6 High
UASB (Municipal) 0.2 0.5 High
Chlorination 1.1 3.5 Med
Demineralisation 0.8 2.4 Med
WW Pre-Treatment 1.4 4.2 Low
W&WW Clarifiers 3.5 9.9 Med

Other Primary WW 3.8 11.1 Med

Activated Sludge 3.7 10.7 Med
Other Biological WW 4.0 10.9 Med
Sludge Thickening 1.5 4.4 Low
Sludge Dewatering 1.8 5.2 High
Sludge Digestion 0.7 2.0 High
Sludge Drying 0.7 2.0 High
Filtration 5.5 16.0 Med
Source: Frost & Sullivan

11
2020 Mega Trend: Integration Opps. Along Value Chain
Opportunities of Integration in $6 bn Membrane Industry
Sample of Players along the Membrane Systems Value Chain
Innovative Membranes & Solutions

1.Stratkraft Osmotic Power

2.Aquaworx Ultrasound metallic filtration
3.Nano H20
4.Porifera

Polymers & Modules Water & Process Solutions

Membranes
Ceramic
Polymeric Polymeric
Arkema
Applied Membranes Norit X-Flow
BASF
Asahi Kasei Dow Water Solutions
Dow
Dow / Film Tec 3M Cuno Water Process
DuPont
GE Osmonics GrahamTek Solutions Solutions
Lanxess
Nitto Inge GE Water (Ionics,
Solvay Pall
Denko/Hydranautics Koch Membranes
Toyobo Osmonics and Zenon)
Koch Membrane
Lanxess * Millipore Siemens Water
Trisep Pall Corporation (USFilter) Millipore
Toray Membrane Rochem Veolia Water
Memstar Ceramic Alfa Laval
Degremont
Hyflux Metawater Dow Water Solutions
Ceramic JIUWU Hitech Xylem (PCI Membranes)
Metawater Atech Innovations Pentair
JIUWU Hitech Doosan Hydro
Atech Innovations Biwater
Severn Trent Services

12
2020 Mega Trend: Sustainable Water Treatment Solutions
Few of the Technologies in Select Growth Markets

Energy Efficiency Improvements with Advanced Aeration Systems

Diffused Aeration Systems

Biogas Generation from Wastewater Treatment

(Anaerobic Digesters such as Up flow Anaerobic Sludge Blanket Systems)

Water Reuse & Recycling Systems Market

(Membrane Bioreactor Systems)
Nutrient Removal & Wastewater Treatment Solutions
for Rapidly Growing Cities
(Moving Bed Bioreactor Systems)

Chemical Free Water & Wastewater Treatment

(UV & Ozone)

Smart Water Solutions to Improve Efficiencies and

Decarbonise Water Services
(Smart Water Grid and Smart Water Metering Market)

13
Approx. $ 400 Mn UV Market
Consolidating Position as Chemical Free Disinfectant
Water and Wastewater Disinfection Systems Market: UV Disinfection Systems Market: Revenue Forecasts by
Revenue Share by Chemical, UV and other Technologies Region & Global (World), 2008 and 2015
(World), 2006 and 2013
700
2008 2015
100% 600

Revenues ($, Million)

Other
90% Disinfection 500
80% Technologies
400
70%
60% 300
Chlorine
50% 200
40%
100
30%
0
20%
UV
Middle East
Americas Europe Asia Pacific Global
10% & Africa
0% 2008 171 150 21 44 386
2006 2007 2008 2009 2010 2011 2012 2013 2015 244 220 57 105 626

Recent & Exciting Market Developments

14
$2 Bn Diffused Aeration Systems Market CAGR 10%
Unmet Needs Present Opp. To Membrane Companies
Diffused Aerators Market: Revenue Forecast (Global), 2010-2015

4,000.0 2010 2015 CAGR 25.0%

3,500.0
20.0%
3,000.0

2,500.0 15.0%
$ million

CAGR
2,000.0

1,500.0 10.0%

1,000.0
5.0%
500.0

0.0 0.0%
Middle East &
Americas Europe Asia Pacific Global
Africa
2010 725.0 900.0 200.0 400.0 2,225.0
2015 900.0 1,200.0 500.0 980.0 3,580.0
CAGR 4.4% 5.9% 20.1% 19.6% 10.0%
Note: Above figures are top level estimates from secondary research and analysis
Unmet Needs....
Reduction in the energy needs of aeration systems
Preventing fouling of membrane surface
Customising diffused aeration systems to specific wastewater effluents
Reducing life cycle and maintenance costs of diffused aeration to affordable levels

15
$ 700 Mn Global MBR Market CAGR >15%
Urbanisation-Increasing Water Stress & Legislation Driven
Projected Concentration of Urban Population (Global), 2015

Increase of Water Stress (Global), 1995 and 2025

16
 Opportunities in Water Intensive Industrial Sectors
Power Generation and Food & Beverage
Power Generation Water and Wastewater Market Revenue Food and Beverage Water and Wastewater Market Revenue
Forecast, Global, 2007 and 2017 Forecast, Global, 2011 and 2020
4500.0 Process Water Wastewater
CAGR (20112020): 5.5%
4000.0

826.9
3500.0
5000.0
Revenues ($ Million)

3000.0 4500.0

Market Revenue ($ Million)

4000.0 1812.2
2500.0
505.0 3500.0

2000.0 433.0 3000.0

596.1
2500.0 1142.3
3235.7
1500.0 2000.0
365.0 1450.7
1500.0
1000.0 2080.0 878.1
1795.5 1000.0
788.8
500.0 500.0 477.2
0.0
0.0 2011 2020
2007 2010 2017
Water Treatment Equipment
Year Wastewater Treatment Equipment
Design and Engineering Services
Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan Operation and Maintenance Services

17
 Urban Regions are Leading Smart Urban Planning Initiatives
Emergence of Smart Water Grid and Related Solutions

SMART
Infrastructure

SMART Buildings

SMART GRID
& NETWORK

SMART Technology

SMART Energy

Satellite Towns SMART Cars

Source: Google Images

18
 Global Smart Water Grid Market
Water Utilities Leveraging ICT to Improve Efficiencies
2020 : Smart Water Grid

2010s AMI Smart Water Grid

Data
Analysis
& Exchange

Traditional Manual Water Grid

Revolutionizing the Water Industry

1970s Automatic Meter Reading

19
 Global Smart Water Grid Market
Technology Applications Along the Water Cycle
Smart Water Smart Valves Smart Water Smart
Cloud services, third party
Meters and Pipes Quality Monitors Pumps
analytical services and water
utility billing and operations

MQ
Q
Q

MQ U
MQ U

V P
V P
M

QM M Q U
Adapted from: UK Drinking Water Inspectorate V P
20
 Global Smart Water Grid Market
Strong Growth, Especially from 2015 Onwards

Smart and Conventional Water Grid Penetration, Global,

2010-2020
100%
14.4% CAGR 2010-2020
90%

80%

70%

60%
$5.8B $8.7B $22.2B
50% Total Market
Total Market Total Market
40% Value Value Value
29%
30%

20%

10%

0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Conventional Water Network Smart Water Network

21
 European Smart Water Metering Market
Smart Water Meters in 50 % EU Households by 2020
Smart Water Meter Market Penetration, 2007 - 2020, 2030 (Europe)
Households ('000) Water Meters ('000) Smart Water Meters ('000)

240000

200000
Households & Water Meters ('000)

160000

120000

Market
80000 Revenue
Market
$7.8B
Market Revenue
Revenue $2.6B
40000 $1.2B

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2030

22
 Ballast Water Treatment Market
Shipping Traffic and Market Revenue Forecasts
The main shipping routes, 2007

62%

$21.1 billion

34%

$11.6 billion
4% 2017-2020

$1.35 billion
Source: www.newscientist.com after the Royal Society/Gastner
2013-2016
2009-2012

Note: All figures are rounded; the base year is 2009.

Source: Frost & Sullivan

23
 Ballast Water Treatment Market
Types of Ballast Water Treatment (BWT) Technologies
Total Ballast Water Treatment Systems Market: Overview of BWT Technologies and Competitive Environment

Solid-liquid Opportunity seekers Ship owners

separation and ship
builders
+
Chemical Industrial W&WW
disinfection groups Industry
Ballast and de- Suppliers
chlorination
Water Competitive
Treatment Environment
Disinfection

(BWT) Physical
Solutions disinfection

Micro-
agitation

Advanced
oxidation Marine
industry
suppliers Start-ups dedicated to BWT

24
Global Water Market 2020
3 Big Predictions

Water FACTORY Producing valuable commodity of water at REAL

1 VALUE and recovering resources and producing renewable energy

Water Risk and Trading Both Water Utilities and Water Intensive/Critical
2 Industries to Invest, Insure and Trade Water

Smart Water Grid, Decarbonisation and Water Footprint To Establish as

3 Key Differentiators.

Vision for future water management in which the water sector is RESILIENT, water
companies are more EFFICIENT and CUSTOMER FOCUSSED and in which water is VALUED
as the precious resource it is. Water for Life, White paper for the UK Water Industry

25