membrane filtration in southeast asia water and wastewater treatment

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Published: 31 Aug 2012

Water, being one of the most valuable natural resources we possess, is becoming increasingly scarce due to the unsustainable anthropogenic use, and exacerbated with the impact ofglobal climatic change. The growing demand for water in agriculture, industrial sectors, and local domestic use, with its associated pollution have led to depletion of freshwater resourcesand also decline in water quality.

Southeast Asia, a region with a burgeoning population and thriving economic activities, consumed close to 100 billion m3 of fresh water is 2011. Vietnam, Indonesia and the Philippinesare the biggest water users accounting to more than 80 percent of total consumption in this region. Despite majority of water uses in these countries are still for agriculture purposes,water use by industrial and domestic sectors are seen to be on the rise.

Increased industrialisation and associated pollution in this region have indirectly resulted in the growing demand for water and wastewater treatment, with membrane being one of thekey technologies used among the many filtration equipments in the market.

Membrane Filtration in Southeast Asia

The market size of water filtration equipment in Southeast Asia (excluding Vietnam) totaled close to $1.3 billion in 2011. It includes non-residential machinery for water and wastewaterfiltration such as membranes, activated carbon water purifiers, filter bags, mesh filters, filter cartridges, and other filter elements. As defined by Frost & Sullivan, market size in thiscontext includes only selling prices and revenues from manufacturers to distributors/ contractors/ end-users. It does not include design costs, and installation costs and excludes contractvalues for operations, and scheduled and ad-hoc maintenances.

Southeast Asia is predominantly a net importer of water filtration equipment. Thailand for instance remains a net exporter with a trade value of $367.3 million in 2011 due to itsmanufacturing activities of such equipment for export purposes. In the same year, the largest trading nation is Singapore which recorded a trade value of $490.6 million. Singapore beingthe home to leading water treatment companies in Southeast Asia imports membranes and filters from those companies' original equipment manufacturing (OEM) facilities in the region.

Of the total water filtration equipments revenue in Southeast Asia, membrane filtration equipment for water and wastewater treatment accounted $249.0 million in 2011 and is expectedto reach $398.0 million by 2017 with a CAGR of 7.0% from 2012 to 2017. Out of the four major membrane types commercially used for both water and wastewater treatment,Microfiltration (MF) led with 35% of the total membrane market size, followed by Ultrafiltration (UF) at 25%, Reverse Osmosis (RO) at 22% and lastly Nano-filtration (NF) at 18%. Themarket size for membrane technologies such as MF and UF are slowly being overtaken by the RO and NF due to its increasing viability.

Vertical Market Demand

Membrane filtration is applied across water and wastewater treatment systems in various industries. The key end-user segments of membrane are municipal and industrial sectors, whileresidential and commercial sector are less significant.

In the municipal end-user segment, membrane filtration is used in both water and wastewater treatments. Among the reasons governments engage in membrane filtration are to achievethe Millennium Development Goals, provide clean drinking water, improve water supply, and reduce pollution to marine ecosystem.

As for the industrial end-user segment, membrane filtration is no longer an alternative as it is recognized as the more effective solution to treat water for industrial use (such as ultrapurewater for the semiconductor industry) and wastewater that is generated from the industries. The residential end-user segment's demand for membrane is mainly on reverse osmosis forwater treatment. Likewise, commercial end-user segment, which include malls, entertainment outlets, hotels, and other service industries adopted the reverse osmosis system to treatwater for drinking purposes. These demands are seen to increase due to greater awareness among end-users, and better affordability of membrane-based water treatment products.

High Demand from Industrial Sector

Source: Frost & Sullivan

In comparison between the two key vertical markets, namely the industrial and the municipal water and wastewater treatment markets, the percent of revenue generated from industrialend-user segment is projected to grow from 53.8% in 2011 to 64.3% in 2017. The decrease in revenue generated from municipal end-user segment could be attributed to the capitalinvestment hurdle commonly faced by municipal water and wastewater treatment projects.

The industrial vertical market consists of large industrial segments such as the pharmaceuticals, food and beverage, and chemicals industries as well as other water intensive industries.Additionally, membrane solutions are sought after by smaller players from the chemical, biotechnology and dye industries. The revenue of membrane generated from industrial verticalmarket accounted for approximately 54% of the total market revenues in 2011, and it is projected to increase to 64.3% in 2017.

The increase in share of industrial vertical can be attributed to the robust economic activities in both Indonesia and Thailand. The demand for membranes in Indonesia's came from thehigh number of industrial enterprises include oil and gas processing, pulp and paper, power plant and palm oil processing. In Thailand, the food and beverage, electrical and electronicssectors are the main manufacturing entities. All these industries have high requirement for water quality, with intensive water usage, and discharge polluted effluents requiringwastewater treatment. Over the long term, the industrial vertical market is expected to lead the way in the uptake of membrane technologies as membranes prices continue to becomemore competitive.

Membrane Filtration in Southeast Asia Water and Wastewater Treatment http://www.frost.com/c/481418/sublib/display-market-insight.do?ctxix...

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Source: Frost & SullivanOn the other hand, municipal vertical market consists of governments and municipalities. Specifically in Singapore, this vertical market will continue to generate stable and sustainabledemand for membrane technologies as there is vast opportunity in seawater desalination and municipal wastewater recycling. In addition, the future lies on upgrading and retrofitting ofexisting membrane-based treatment plants.

Malaysia and Singapore

Source: Frost & SullivanIn 2011, the highest spenders in membrane technology were Malaysia and Singapore. Singapore made up almost a quarter of the Southeast Asia market whereas Malaysia contributed14.7% of total membrane revenues. The aspiration of Singapore in achieving self sufficiency in water has led to the country investing heavily in membrane technologies. In order to reduceits dependency of water resource from Malaysia, Singapore has positioned itself as the regional research and development hub on membrane related technologies, exploring the use ofmembrane in recycling and reusing of wastewater for municipal and industrial use, and seawater desalination for municipal consumption.

The largest investments from Singapore on membrane technologies will come from its desalination activities. It is evident with the construction of the country's biggest desalination plant- the Tuaspring Desalination Plant. With investments of approximately $890.0 million, this desalination plant which engages some of the most advanced membrane technologies isexpected to produce the world's cheapest desalinated water.

Unlike Singapore, Malaysia does not have such unique water issues, and water demand in terms of volume is not as high as Indonesia. Nevertheless, Malaysia is the second highest percapita usage of water hence expected to show the second highest contribution of revenues for membrane filtrations due to its rapid growth in industrial activities and improvement onindustrial wastewater discharge regulations and enforcement.

Membrane technologies in Thailand, Philippines, Indonesia and Vietnam are expected to grow favorably as these countries look to increase their levels of sanitation and water supply inorder to meet respective UN Millennium Development Goals as membrane technologies are among the most efficient and best technologies in the market. Vietnam, for example, isalready expanding its footprint in the desalination market with foreign investments that include construction and assembly of membrane equipment.

Challenges

Despite it being a increasingly important component in water and wastewater treatment, membrane filtration faces some apparent challenges. Although membrane prices are becomingmore competitive, it is still challenged by lower-priced conventional filtration solutions. Water treatment operators and industrial market participants may difficulties to justify the highinvestment of membrane applications as the return on investments are usually not apparent and not easily understood.

The second challenge is in relation to the low water prices across most countries in Southeast Asia. The low water tariff indirectly discourages further investment in membranetechnologies. It further necessitates water operators or industrial owners to choose the cheaper, if not cheapest options for water and wastewater treatment. In comparison toconventional treatment equipment, membrane filtration is relatively a new treatment method which is technologically advanced. Hence, workforce with special skills and knowledge arerequired to operate and maintain these systems. In Southeast Asia, there has been a lack of such workforce, and keeping the manpower costs low is another challenge. Additionally, thecosts of repairs in membrane treatment and machinery are high as replacement equipment is expensive and may be difficult to source

Competitive Factors and Demand


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Source: Frost & SullivanCompetition within the membrane market in Southeast Asia is rather high and the competitiveness of membrane products is linked to the following factors:

1. MEMBRANE EFFICIENCY is the main requirement in a contract. Companies that are able to deliver high treatment efficiency membranes with low energy requirement would havea better advantage over their competitors.2. Despite it being less apparent in less-developed markets, REPUTATION remains a key competitive factor in order to secure a project. In this instance, multinational or big companieshave the competitive edge.3. PRICING is a crucial factor especially in less-developed markets as customers in less-developed countries tend to be more price sensitive.4. Unlike pricing, INNOVATION has more impact on developed markets, as customers are well aware and emphasize more on innovative offerings.5. Incorporating GREEN APPROACH in service offerings increases its competitiveness as customers are educated with the concepts of sustainability and energy efficiency.Nonetheless, local or smaller companies have yet to embrace this concept on a cost-benefit basis.6. The level of PENETRATION is factor affecting multinational companies, or companies having businesses in several countries. Geographical coverage is deemed important as thecompanies' local presence is preferred for technological support and after-sales services.

Moving Forward

Given the wide-ranging application potentials and advanced treatment capability of membrane filtration, it has become one of the fastest growing water filtration solutions in SoutheastAsia despite the various challenges and concerns. Membrane filtration will continue to play a pivotal role in the provision and supply of clean water across end-user segments, and inwastewater treatment for recycling and reuse for both municipal and industrial functions.

The article is authored by David Lee, Senior Consultant - Asia Pacific, Environment & Building Technologies, Frost & Sullivan

For media queries, please contact Donna Jeremiah at [email protected] or Jessie Loh at [email protected]


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membrane filtration in southeast asia water and wastewater treatment

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