Growth in the $7.6 Billion U.S. Remediation Market Slips in 2014 Despite Rebound in the Private Sector
The U.S. environmental remediation market declined 2% in 2014 as larger companies lost share, although it was an improvement over the 4% decline reported in 2013, according to Environmental Business Journal's annual review of the remediation market.
EBJ's annual remediation survey, conducted in March-April 2015, showed that for the more than 50 respondents reporting remediation revenues in 2014, the median growth rate was 4-5% and mean growth was 3.6%. However, after taking into account the decline in remediation revenues of multi-disciplinary billion-dollar leaders like Bechtel, CB&I, AECOM, TetraTech, CH2M and ARCADIS in 2014, EBJ’s annual growth estimate was adjusted downwards.
The $7.6-billion U.S. remediation market-still the most vibrant remediation market of size in the world-has not exceeded 4% annual growth since 2007, but the theory that remediation would inexorably decline as contaminated sites were cleaned up and compliance increased hasn't been borne out, according to EBJ. Economic growth and the ongoing discovery of contaminated sites, in addition to opportunities for infrastructure reuse, have countered conjecture that the remediation market would eventually disappear. 'While society's ongoing need for remediation and restoration may not represent a spectacular growth opportunity, the market is steady,' said Grant Ferrier, publisher of EBJ.
Segments within the remediation market wax and wane, however. Cutbacks to big government cleanup and restoration programs were largely responsible for the decline in the U.S. remediation market in 2013 and 2014. But growth in the private sector has improved as cleanup projects delayed by recession are now being funded and companies are seeking to remove liabilities from their books and return sites to productive use.
Based on interviews with top remediation executives and the results of EBJ's 'Remediation Survey 2015: Market Breakdowns & Forecast,' growth niches in remediation include manufactured gas plants, a growing emphasis on sediments, on-site treatments, and the transitioning coal power infrastructure. Companies that specialize in addressing contamination caused by the use of chlorinated solvents also stand to do well as sites where such solvents were used for parts cleaning (military bases, aerospace facilities, electronics production facilities) are targeted for return to productive use. The brownfields market is also in relatively good health, EBJ concluded.
'For years, thriving and surviving in the remediation market has meant being nimble enough to cut and run out of slow markets, or identify new pockets of opportunity and be able to jump in,' said Ferrier. 'Those pockets may vary by client sector or by site type, or as new classes of contaminants or categories of old facilities draw the attention of regulators.'
According to EBJ's Remediation Survey, revenues generated in the U.S. remediation market in 2014 were derived 33% from groundwater cleanup; 26% from contaminated soil; 9% from sediments (lakes, rivers, bays); and 9% from surface water quality (runoff, stormwater, spills), with cleanup associated with landfills, buildings and ecological habitat comprising the remainder.
Merger and Acquisition Activity Remains High in Remediation
Both strategic and financial investors kept up activity in the remediation segment in 2014-15. This EBJ edition includes analysis of deals and partnerships such as Pritzker's acquisition of Entact; CH2M Hill and Apollo; ERM and Omers Private Equity; Great Lakes Dredge & Dock Corp.'s acquisition of Magnus Pacific; and the merger of LVI Services Inc. and NCM Group Holdings, two leading providers of demolition and remediation, to form NorthStar Group Holdings.
EBJ's Remediation edition 2015 is replete with growth charts and proprietary data including:
- Revenue growth in remediation
- Number of U.S. hazardous waste sites
- Prospects in remediation markets
- Remediation client market rating
- Remediation revenues by project type
- Breakdown of remediation by contract type
- Ranking of remediation technologies applied on active sites, 2008-2015
Also covered in this edition:
Changes to contracting vehicles, brownfields redevelopment, sustainable remediation, M&A activity and profiles of leading remediation contractors including SCS Engineers, TerraTherm, Trihydro, Soil-Therm, Regenesis and Envirocon.