Membrane technology on the rise
Newcomers shouldn't expect to profit from market growth, report says.
Already the dominant technology for desalination, membrane-based water treatment is expanding into markets that were once the exclusive domain of chemical, biological, and basic filtration technologies. As the opportunities multiply for new and established membrane technologies, the total market will grow from US$1.5 billion in 2009 to $2.8 billion in 2020, according to a report from Lux Research.
This does not translate into plentiful business opportunities for new entrants into the market, however, says Reka Sumangali, research associate at Lux Research: “Despite the groundswell of growth opportunities beyond RO desalination, entrepreneurs and investors contemplating a leap into the membrane market can expect some challenges ahead. A lack of differentiation is driving down product prices, while development of more efficient, longer lasting membranes will keep margins low.”
Titled ‘Filtering out growth prospects in the $1.5 billion membrane market’, the report has come up with some key conclusions:
• RO membranes are the largest technology, but ultrafiltration is set for fast growth. Reaching $1.3 billion in 2020, RO membranes will continue to be the biggest segment of the market. However, fueled in part by their promise in treating municipal wastewater, industrial process water, and other types of water, ultrafiltration membranes should see a healthy 6.5% compound annual growth rate, expanding from $0.4 billion in 2009 to nearly $0.7 billion in 2020.
• Although market size grows for RO, profits become more elusive. RO membrane prices have been eroded by a lack of differentiation, and undercut by competition from Chinese manufacturers. Providers have fought back by bundling value-added services and chemicals with their membranes, or tapping new technologies to improve membrane performance. But the limited number of solutions has forced most providers to pursue similar paths, and the lack of differentiation – and cost erosion – will persist.
• Recycled municipal water will boom. In regions of extreme water stress, such as India and China, the idea of municipal water recycling is catching on. The Indian government alone plans to spend several billion dollars over the next five to ten years treating the Ganges River. This expansion in municipal water filtration will drive growth in membranes for ultrafiltration, microfiltration, and low-pressure RO.