Analysis of the Middle East (GCC) Water and Wastewater Treatment Equipment Market

This Frost & Sullivan research service titled Analysis of the Middle East (GCC) Water and Wastewater Treatment Equipment Market provides an in-depth analysis of market contours, industry structure, and competitive environment besides dealing with the challenges and issues that market participants are facing. In this research, Frost & Sullivan's expert analysts thoroughly examine both municipal and industrial water and wastewater treatment markets and technologies.

This analysis is available through our Environmental Growth Partnership Services program. With continuous access to intelligence and resources from all seven perspectives of the Complex Business Universe, the Growth Partnership Services program ensures that you and your Growth Team??? are able to maintain a 360 Degree Perspective of the market. This comprehensive, objective information allows your company to mitigate risk, identify new opportunities, and drive effective strategies for growth. For more information on this custom subscription service, please click here.

Market Overview

Economic Meltdown Slows Tempo of Growth in the Middle East Water and Wastewater Treatment Equipment Markets

The market for water and wastewater treatment equipment in Gulf Cooperation Council (GCC) countries took huge strides forward in 2008 fuelled by massive investments in infrastructure, real estate, petrochemicals, oil and gas and other sectors. However, the sub-prime mortgage crisis that hit western economies changed the business climate and since then there has been a considerable decline in demand for most commodities. Crude oil prices plummeted to $50 per barrel from a historic high of $145 per barrel. Investors are fighting shy of funding new projects. Some of the downstream and upstream investments, which were planned considering crude prices of more than $85 per barrel, are likely to be shelved. While the sudden change in the business landscape has stalled market progression in the water segment, the GCC market is expected to be back on the rails by 2010 bolstered by strong economic fundamentals and increased governmental expenditure. Water and wastewater treatment equipment market revenues in the region touched $1.26 billion during 2008 and are expected to reach $1.87 billion by 2013. Desalination will continue to be the prime driver for the segment.

Governments in GCC countries have exhibited strong political will to continue investing in important infrastructure projects. "Environmental and health hazards surrounding the disposal of untreated effluent, marine pollution, and deteriorating ground water quality are some of the issues that are keeping market prospects strong," notes the analyst of the research. "Though these forces have been overshadowed by short term concerns, they are expected to positively impact market dynamics from 2009 to 2013." The extent to which markets across GCC member nations will be affected by the ongoing economic slump depends largely on factors that include government dependence on oil revenues, dependence of economic growth on external debt, and ability to absorb the shock based on economic strength. The core municipal sector is expected to cushion the impact of this slowdown. Governments in GCC countries have identified municipal wastewater treatment as the priority area for multiple reasons including the achievement of the Millennium Development Goals. Wastewater treatment and reuse is likely to see widespread adoption across GCC countries, representing an expanding market for advanced wastewater treatment technologies.

"The market is fraught with challenges in spite of its immense opportunities," says the analyst. "The complex business environment, slow decision making process and customer preference for low-cost solutions regardless of the performance makes it difficult to penetrate the market." The mass market is highly price sensitive, triggering intense competition in less technologically complex products. Profit margins for such products are also under pressure. Fierce rivalry dominates the scenario in some of the component categories such as valves and pumps. Owing to the lack of technical competence, cost considerations dictate buyers' decisions and component suppliers are facing hyper competition due to the availability of low-cost products from supplier nations such as India and China. The onus is on technology providers to roll out cost-effective products to successfully navigate tough market conditions.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By Application:

• Municipal water treatment
• Industrial water treatment
• Wastewater treatment

By End-use Vertical:

• Oil and gas
• Petrochemical and chemicals
• Power and water
• Metals and related products
• Food and beverages
• Building material