Water treatment chemicals business will be flat in 2009, but recover in 2010


Source: The McIlvaine Company

Power and municipal wastewater treatment are the two big markets for water treatment chemicals.  These two markets will help the water and wastewater treatment chemicals suppliers maintain sales at the 2008 level in 2009.  The latest analysis in Water and Wastewater Treatment Chemicals published by the McIlvaine Company reflects world 2009 revenues of $20.5 billion rather than the previously forecasted $21.3 billion.

World Water and Wastewater Treatment Chemicals Revenues ($ Millions)

Subject                                   2009

Activated Carbon                    541

Chelants                                  483

Corrosion Inhibitors                 4,546

Defoamers                               484

Inorganic Flocculants               2,681

Ion Exchange                           641

Odor Control                           685

Organic Flocculants                  3,514

Other                                        993

Oxidizers & Biocides               2,024

pH Adjusters                           1,110

Scale Inhibitors                        2,822

Corrosion inhibitors will maintain its lead as the largest revenue generator among the product categories. Organic flocculants will rank second with revenues of $3.5 billion.

The industries least impacted by the recession are the largest markets for water treatment chemicals.

Industry Rankings

Industry                     2008

Wastewater                     1

Power                             2

Water                              3

Refineries                         4

Pulp & Paper                   5

Other Industries               6

Oil & Gas                        7

Food                               8

Chemical                         9

Metals                            10

Electronics                      11

Mining                            12

Pharmaceutical                13

Municipal wastewater plants around the world will be the largest purchasers. The power industry will account for slightly more sales than the municipal drinking water segment. Refineries will capture fourth place in 2009.

Chemicals makers in general fared well in 2008 despite increasing raw materials costs.  Decreased volume and increased costs were offset by increased prices.  In the first half of the year, the suppliers were trying to increase prices fast enough to keep up with increased costs.  In the second half, they were able to benefit from these increases.

The water treatment chemicals business has been surprisingly fluid in that large players have been acquired or divested by even larger companies.  The most recent acquisition in progress is that of Ciba by BASF.  Nalco has been thriving as a divestiture.  Betz is now under the GE umbrella and subject to the indirect consequences of the GE Capital problems.  There are thousands of chemical companies with regional and product niches.  The industry will remain fragmented.

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