The companies selling water pollution control equipment, instrumentation and services are planning growth strategies based on world markets and not on individual countries, concludes the McIlvaine Company in the report Air/Gas/Water/Fluid Treatment and Control: World Markets.
According to McIlvaine, the future of the water industry is international specialization. The companies who become leaders in a special technology and then provide this technology worldwide have a large revenue stream in their specialty. This allows them the resources to lengthen their lead through research and development.
The world’s water technology knowledge is doubling every few years, and McIlvaine says companies and individuals can only cope with this flood of information by focusing on niches. The individual company needs to specialize in something or it will not lead in anything.
Therefore, McIlvaine says the individual government strategies to boost exports and limit imports need to be revised. The government strategy should be to provide the infrastructure (education, tax incentives, etc.) to foster niche expertise among its citizens.
McIlvaine notes the strategies of the largest companies are indicative of the future. Thermo Scientific, a company with corporate headquarters in the U.S., has moved the headquarters of its Environmental Instrument Division to Shanghai. It has expanded its technology development activities in China as well. The company believes China will be the fastest growing market for its products.
Veolia is serving 40 million people in China with its water treatment and delivery services. It is a major operator in the U.S., but is home based in Europe.
Andritz is European based, but its wastewater treatment center is in Texas. It is now a major supplier of sewage sludge centrifuges to Chinese municipalities.
McIlvaine cites the centrifuge as one of the best examples of a product that is sold based on superior technology. These are complex, high-speed machines. It would be difficult to offer the product in a limited geographic area. And the revenue would not justify the research and development costs to keep pace with the international suppliers.
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