Biological Wastewater Treatment Markets Analyst Briefing

North American Biological Wastewater Treatment Markets and North American Sludge Treatment Equipment Markets are ready for Considerable Future Growth - What are the Driving Forces?

Shilpa Tiku, Consultant, Environment and Building Technologies

August 6, 2008

2

Focus Points

• Market Scope

• Market Drivers

• Market Restraints

• Industry Challenges

• Market Movement and Revenue Forecasts

• Market Leaders

• Competitive Factors

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North American Biological Wastewater

Treatment Markets

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Market Scope

The North American biological wastewater treatment

market is divided into two segments:

• Membrane Bioreactor (MBR) Market

• Sequential Batch Reactor (SBR) Market

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Market Drivers

•Public environmental awareness promotes the use of biological wastewater treatment equipment.

•The need for energy-efficient equipment drives market growth.

•Mergers and acquisitions help expand the wastewater treatment market.

•Rising demand from industries for biological plants…

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Market Restraints

•Maturity of biological treatment equipment stunts growth opportunities.

•High costs deter the purchase of certain wastewater

treatment equipment.

•High vendor loyalty poses market-entry barriers.

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Industry Challenges

•Long equipment lifetime limits replacement market

development.

•Increasing steel prices is a major challenge.

•High degree of saturation hinders demand for

traditional technologies.

8

Market Movement/Revenue Projection

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

550.0

600.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Revenues ($ Millions)

8.0%

8.2%

8.4%

8.6%

8.8%

9.0%

9.2%

9.4%

9.6%

9.8%

10.0%

Growth Percentage (%)

$ Millions %

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Market Leaders

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Competitive Factors

• Brand Name

• Pricing

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North American Sludge Treatment Equipment

Markets

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Market Scope

The North American sludge treatment equipment market

has been divided into three segments:

• Sludge digestion equipment

• Sludge dewatering equipment

• Sludge drying equipment

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Market Drivers

• Sludge reuse driving sales

• Reduced volume of sludge saves transportation cost

• Public awareness

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Market Restraints

• Increasing attempts to reduce sludge production

• Mature market hinders further growth opportunities of

sludge treatment equipment manufacturers.

• Traditionally conservative market

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Industry Challenges

• Economic situation hits hard in the industry

• Maturing market with slow down in large scale

investments and increasing consolidation.

• Emerging price competition squeeze profit margins.

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Market Movement/Revenue Projection

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

550.0

600.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Revenues ($ Millions)

1.0%

2.0%

3.0%

4.0%

5.0%

Growth Percentage (%)

$ Millions %

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Market Leaders

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Competitive Factors

• Highest quality for the lowest price

• Complete solutions

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Competitive Structure?

Emerging Trends?

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free audio segment that accompanies this presentation, please contact Stephanie Ochoa, Analyst Briefing Coordinator, at (210)

247-2421 or via email, analystbriefings@frost.com.