Packaged Waste Water Treatment Plant_Final

8/10/2019 Packaged Waste Water Treatment Plant_Final

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Packaged Wastewater Treatment Market in India Portraying huge market potential because of growth in key

industries like food & beverage and pharmaceuticals.

P71D-15June 2013



2P71D-15

Research Team

Name Krishna Chandra DeyResearch AnalystEnvironment Technologies Practice

+91.33.66273337

[email protected]

Lead Analyst

Research Director

Name Sasidhar ChidanamarriIndustry ManagerEnvironment Technologies Practice

+91.44.66814081

[email protected]

Strategic Review Committee Leader

Name Nideshna NaiduIndustry AnalystEnvironment Technologies Practice

+91.44.66814351

[email protected]

mailto:****@frost.com










3P71D-15

Contents

Section Slide Numbers

Executive Summary 4

Market Overview 9

Total Packaged Wastewater Treatment Market in India -

• External Challenges: Drivers and Restraints 15

• Forecasts and Trends 22

• Market Share and Competitive Analysis 31

End User Segment Breakdown 40

State Suitability and Industry Breakdown 50

End User Segment Overview 53

The Last Word 63

Appendix 66



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Executive Summary



5P71D-15

Executive Summary

• The packaged wastewater treatment market presently is in growing stage with a market

size of INR 1,600 million and 12.8 percent CAGR between 2012-2017, which throws ampleopportunities.

• The packaged wastewater market in India is slowly expanding from Industries to hotels and

institutions.

• Small break even period coupled with stringent laws and government initiatives and polices

are the major drivers of the industry.

• The food and beverage industry growing at 25 percent Compound Annual Growth

Rate(CAGR) and pharma industry growing at 15 percent CAGR dominates the industrial

segment.

• The low penetration of such systems in class-I cities(32 percent) and class-II cities(8

percent) is an eye opener for new as well as present market players.

• Regulation in various cities like Gujarat and government initiative for wastewater treatment

in Bihar is propelling such systems in these two cities enormously.

• West Bengal, Gujarat, Karnataka, Andhra Pradesh and Bihar are high growth rate markets

for packaged systems. Source: Frost & Sullivan.



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Executive Summary—Market Engineering Measurements

Market Stage

Growing

Market Revenues

INR 1,600 M

(2012)

Average Price PerUnit

INR 2.20 M

Market size at the end ofForecast Period

INR 2,925 M

(2017)

Base YearMarket GrowthRate

11.2%

5 Year ForecastMarket GrowthRate

12.8%

(CAGR)

Customer PriceSensitivity

5

(scale:1 [low] to 10 [High])

MarketConcentration

15.4%

Degree ofTechnicalChange

6

(scale:1 [low] to 10 [High])

Market Overview

Total Packaged wastewater treatment market: India, 2012

For a tabular version click here.Stable IncreasingDecreasing

(% of market share held bytop 3 companies)

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.

(2012)


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AverageProductDevelopmentTime

3-5Years

Number ofCompetitors

100-150

(active market competitors in

base year)

Executive Summary—Market Engineering Measurements(continued)

Competitor Overview

Stable IncreasingDecreasing

Maintenancefrequency

1-2 timesper year(average maintenance

frequency)

Total Addressable Market

Industry Advancement

MarketingSpend as aPercent ofMarket Revenue

2-3%

. Note: All figures are rounded. The base year is 2012.Source: Frost & Sullivan analysis.



Executive Summary—CEO’s Perspective

2The market is highly Fragmented soTie-ups with local players could be agame changer.

3Educational promotions regarding lowoperating cost of such systems in longrun is an efficient marketing strategy.

4

Patented technologies give cuttingedge in enhancing the profit share asconsumers are not much cost-sensitiveas quality sensitive.

5

Such small systems are beingpromoted by state governments bygiving tax breaks etc. which is leadingto many start- ups in this industry.

1 Branding is extremely important forhigher profit margins in case ofIndustrial packaged systems.

Source: Frost & Sullivan analysis.



Market Overview



Market Overview—Definitions

• The market covered by this project comprises packaged

wastewater treatment plants in India Upto a capacity of 500

Kilo liters per day(KLD).

• The scope of this project includes all sorts of wastewater

treatment installations within 500 KLD. It doesn’t include

parallel pre-treatment facilities.

• This study covers the break up of packaged systems end

user wise and also points the potential states and sectors for

such systems.

• Revenue is specified in Indian Rupees (INR) Million.


2017

Time

Line

Geographic Scope

Short Term Long Term

2012 2014 2015

Forecast

Period

Base

Year

Medium Term



Market Overview—Key Questions This Study Will Answer

Is the market growing, how long will it continue to grow and at what rate?

What are the sectors which are expected to see major growth for packaged systems?

Will these companies/products/services continue to exist or will they get acquired by othercompanies?

Which states of India are most suitable for market expansion and what are the factors that drive themarket in these states?

Are the products/services offered today meeting customer needs or is there additional developmentneeded?

Are the vendors in the space ready to go alone, or do they need partnerships to take their businessto the next level?




Market Overview—Segmentation

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivananalysis.

Commercial20.0%

Municipalities30.0%

Industries50.0%

Percent Sales BreakdownPackaged wastewater treatment plant: India,2012



Market Share by Technology

. Source: Frost & Sullivan analysis.

Key Takeaway: RO Systems would increase its market share at the cost of MBBR.

MBBR50%

MBR10%

RO25%

OTHERS15%

Packaged Wastewater System Breakdown by Technology



Technology Break Up Discussion

• Moving Bed Bio-Film Reactor(MBBR)- It uses polyethylene biofilm carriers operating in

mixed motion within an aerated basin. It has the advantage of compact size but it requiresmaintenance and cant bear shock loads.

• Membrane Bio reactor(MBR)- It is the combination of a membrane process likemicrofiltration or ultrafiltration with a suspended growth bio reactor. It is effective at highconcentrations of solids due to cross flow mixing.

• Reverse Osmosis(RO)- Reverse osmosis uses osmotic pressure gradient in oppositedirection and produces extremely high purity of water and is highly used in Pharmaindustry. It is a costly method compared to MBBR and MBR technologies.

• Fluidized Media Reactor(FMR)- Its very similar to bio reactor with only difference that theentire medium is fluidized and air is generally used as fluidizing media and it’s a completephysical separation process.

• Other Technologies- Other Technologies like Field erected package(FEP), Sequentialbatch reactor(SBR) are relatively new technologies. Up flow Anaerobic Sludge blanketdigestion(UASB) is a very slow process and is used where there are no space constraints.




External Challenges: Drivers and Restraints— Total Packaged Wastewater Treatment Plant Market



Drivers and Restraints

M

a r k e t D r i v e r s

M a r k e t R e s t

r a i n t s

1-2 years 3-5 years 6-10 yearsHigh growth rates of food and beverage industryis expected to propel the demand in industrialsegment.

Impact: High Medium Low

Packaged Wastewater Treatment Plant Market: Key Market Drivers and Restraints, India, 2012-2017


Construction industry development accompanyingthe industrial growth would drive the demand inhotels and institutions.

Increasing government regulations, tax breaks and

stringent water disposal parameters coupled withdeclining cost and increased awareness would leadto more use of such packaged systems.

Lack of awareness about operating cost, andprofitability is pegging the rapid growth.

Negligence in the implementation of waterpollution laws and back end corruption is also adeterrent.



Drivers Explained

The Growth of the Food and Beverage Industry

The Indian Food and Beverage Industry is witnessing an annual growth rate of 25.0 percent with a market size of$69.4 billion and expected to grow at massive rates owing to increasing population and higher rate of urbanization.

Rapid Urbanization

The increasing rate of urbanization and growing fast food culture coupled with westernization is propelling the Foodand Beverage industry. This is pretty evident from the increasing per capita consumption of almost all food items.The expansion plans of all major companies in this sector and the opening of retail sector to foreign directinvestment and the clause that they have to procure 30 percent of items from domestic suppliers, would lead to

increase in efficiency in terms of water treatment technology which in turn would increase the demand of smallpackaged wastewater treatment plants.

Food Companies Expansion Plans

Nutricia International It’s aiming to double the sales in the next three years by consolidating the local brands acquired fromWockhardt and then introducing selected brands from Danone’s International nutrition portfolio.

Poncho Indian Angel network has made an investment in Mumbai based Mexican quick service restaurant,Poncho to reach 15 outlets by 2012.

New Silk route New Silk Route (NSR) plans to invest about US$ 100 million to expand its food and restaurantportfolio.

Coca-Cola Coca-Cola plans to invest US$ 5 billion over the next 10 years as it expands its capacities in India.

MOFPI The Ministry of Food Processing Industries (MoFPI) has formulated a Vision 2015 Action Plan thatincludes trebling the size of the food processing industry, raising the level of processing ofperishables from 6 per cent to 20 percent, increasing value addition from 20 per cent to 35 percent,and enhancing India's share in global food trade from 1.5 per cent to 3 percent.



18P71D-15

Drivers Explained (continued)

The Growth of the Construction Industry

The Indian Construction Industry is expected to witness an annual growth rate of 10 percent with a market size ofINR 2.40 billion and expected to grow at massive rates owing to increasing population and higher rate ofurbanization.

Rapid Urbanization

The constant demand supply gap in the construction industry is fuelling the real estate, hotels and institutionsgrowth in urban areas and also leading to expansion of urban areas. Moreover the RBI’S stand of reducing theinterest rates and paring down the Cash Reserve Ratio is clearly an indicator of steps to spur investment which is

bound to have a repel effect on the construction industry especially associated real estates, hotels and institutions.Maharashtra, Andhra Pradesh, Tamilnadu, Uttar Pradesh and west Bengal are key states for packaged systems inhotels and institutions.

00.10.20.30.40.50.60.70.80.9

1

Construction Industry Relative Growth, India, 2012

R e l a t i v e g r o w t h i n u n i t s

Source: Frost & Sullivan analysis



19P71D-15

Drivers Explained (continued)

Government Laws and Regulations and increased Awareness

The water laws and regulations are getting stringent day by day and with more emphasis being laid on itsimplementation, the percentage of industries following the standards are on the rise. Many states like Bihar aregiving tax breaks to the start up companies setting up wastewater treatment facilities. The government is alsoproviding loans at zero percent interest rate on a case by case basis. Of the overall 4,339 MLD capacity Sewagetreatment plant that has been sanctioned in 167 towns under national river conservation plan 3,095 MLD has alreadybeen installed. The low O & M cost of STP systems as well very low power consumption is a fact not much of apopular fact. As the awareness spreads more and more companies would adopt such systems and stop dischargingthe waste directly into the water bodies.

Source: Infrastructure report 2011 & Frost & Sullivan analysis

Polluting Sources SpecificStandards

Current Status

Domestic sewage from towns andcities.

MINAS STP facilities exists for only 26% of sewage from class-Iand class-II cities. Out of those only 55% are complyingwith MINAS.

Industrial Effluents (point discharges) MINAS(Industryspecific)

No Comprehensive statistics available but wide spreaddamage is documented by CPCB.

Industrial and mines run-off Nostandards/legislation

No comprehensive study measuring the quantum ofcontaminants available.

Agricultural run-off Nostandards/legislation

Widespread run off of pesticide prone water to waterbodies have been documented.



20P71D-15

Restraints Explained

Lack of Awareness

The lack of awareness about low operating cost and the subsequent tax benefits from meeting thegovernment standards has created a myth that packaged systems are costly to operate and install. Theinstallation cost varies between INR 10-30 lakhs depending upon the complexity of applications. The cost ofpower varies with technology and ranges from INR 1.31/m^3 to INR 9.61/m^3. The Operation & Maintenancecost varies from INR 0.57/m^3 to INR 5.48/m^3.

Moreover industries complying the standards can export goods which is an additional revenue makingfeature. So as the wastewater management companies and consultants work for increasing the awareness,

on short run they are major impediments.O & M cost & Power cost variation with Technology, India, 2011

Source: Grover(2011) & Frost & Sullivan analysis

Technology O & M cost/m^3 (INR) Power cost/ m^3 (INR)

Extended Aeration 0.57 1.31

Classical Tertiary+ UV+ CL 5.11 8.74

MBR +UV+ CL 5.48 9.61

Densadeg. (Degermont technology) +Bio formation.

1.73 3.01

Biotower+ Densadeg + Bio formation 1.14 1.68



21P71D-15

Restraints Explained(continued)

Negligence in law implementation and back end corruption

Though there has been laws related to wastewater standards but lack of implementation has lead to lowpenetration of such laws even in tier-I cities. The prevalence of corruption in environmental departmentsleads to illegal approval of water discharge directly to water bodies without meeting the requirements. Evenin Class-I cities the available treatment capacity is only 32% whereas in class-II towns it is only 8%.

CPCB provides source specific pollution standards for industries with respect to pollution concentration ofmajor water pollutants: (BOD), chemical oxygen demand (COD), suspended solids (SS), and PH.

Wastewater treatment Capacity in Urban Areas, India, 2012

Source: CPCB(2008) & Frost & Sullivan analysis

Category No. Of Cities Total watersupply(in MLD)

Wastewatergeneration (inMLD)

Treatmentcapacity (in MLD)

Class-I city 498 44769.05 35558.12 11553.68(32%)

Class-II town 410 3324.83 2696.70 233.7(8%)

Total 908 48093.88 38254 11787.38(31%)



22P71D-15

Forecasts and Trends—Total Market



23P71D-15

MEASUREMENT NAME MEASUREMENT TREND

Market Stage (Nascent, Growth, Mature) Growing —

Market Revenue (2012) INR 1,600 M ▲

Market Units/Volume (2012) 750-800 ▲

Average Price Per Unit INR 2.20 M ▼

Market Size at End of Forecast Period (2017) INR 2,925 M ▲

Base Year Market Growth Rate 11.2% ▲

5 Year Forecast Market Growth Rate (CAGR) , 2012-2017 12.8% —

Customer Price Sensitivity (scale of 1 to 10, Low to High) 5 ●

Degree of Technical Change (scale of 1 to 10, Low to High) 6 ●

Market Concentration (% of base year market controlled by top three competitors) 15.4% ▼

Market Engineering Measurements

TREND Decreasing Stable Increasing

▼ ● ▲ Market Overview

Total Packaged Water Treatment Plant Market: India, 2012




24P71D-15

Maintenance frequency(average maintenance frequency) 1-2 times per

year▼


Number of Competitors (active market competitors in base year) 100-150 ▲

Market Engineering Measurements (continued)


▼ ● ▲

Competitor Overview

Total Addressable Market




25P71D-15


Average Product Development Time 3-5 Years ▼

Marketing Spend as a Percent of Market Revenue 2-3% ●

Market Engineering Measurements (continued)


▼ ● ▲

Industry Advancement




26P71D-15

Forecast Assumptions


• A stable economic outlook has been considered for the next five years with GDP growth of 8 percent

for the period (2012-2017).

• The Asian market for water and wastewater treatment in the pharmaceutical industry is expected towitness a CAGR of 16.5 percent according to the Frost & Sullivan Global Pharmaceutical Water andWastewater Study.

• The growth of Textile industry has been assumed to be 16 percent according to National

Manufacturing Competitiveness Council (NMCC) report.

• The growth of Food & Beverage industry over the next five years has been assumed to be 25 percentaccording to government reports and the allowance of Foreign direct investment in retail with aclause of procuring 30 percent goods domestically.

• The Pharma industry and Distillery industry are expected to grow at a rate of 15 percent and 9percent annually according to planning commission annual report.

• The Hotels and Institutions are expected to grow at a rate 10 percent annually considering thepopulation growth and urbanization trend in India.

T t l P k d W t t T t t Pl t M k t



27P71D-15


9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

13.5

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2012 2013 2014 2015 2016 2017

Revenue (INR Million) 1,600 1,779 1,993 2,251 2,559 2,925

Growth Rate (%) 10.9 11.4 12.3 12.6 12.9

G r o w t h R a t e ( % )

R e v e n u e ( I N R M i l l i o n )

Year

Total Packaged Wastewater Treatment Market: Revenue ForecastIndia, 2012 –2017

CAGR = 12.8% (2012-2017)

Total Packaged Wastewater Treatment Plant Market—Revenue Forecast

Key Takeaway: Growth is fuelled by increasing adoption and industrial growth.



28P71D-15

Revenue Forecast Discussion

In 2012, the packaged wastewater treatment plant market in India was valued at INR 1,600 million. It is in

growing stage with a highly fragmented market structure.

The adoption of sewage treatment plants even in class-I cities have been only 32 percent and in class-II

cities it is only 8 percent. These unexplored markets are key potential for packaged plants due to space

constraints as well as due to government regulations.

As the economy starts gaining confidence and the investment scenario comes back on track, the

packaged system would get more popular due to environmental issues which explains the high growth rate

predicted at the latter half of the forecast period when its expected to grow at a rate between 12-13

percent per annum.

The growth is expected to be steady over the next 5 years and the market size is forecasted to grow to

INR 2,925 million at the end of the year 2017.The opening up of foreign direct investment, lowering of cash reserve ratio and reducing the interest rates

would bolster the investment mainly in infrastructure and food industry where huge demand potential is yet

to be untapped.




29P71D-15

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2012 2013 2014 2015 2016 2017

Municipalities 480 523 573 630 696 773

Industries 800 907 1039 1201 1399 1637

Commercial Hotels & Institutions 320 349 382 420 464 515

Growth Rate (%) 11.2 12.1 12.9 13.7 14.3



Total Packaged Wastewater Treatment Plant Market— Revenue Forecast by End User

Key Takeaway: Industrial segment outweighs municipal & commercial

R e v e n u e ( I N R M

i l l i o n )

Total Packaged Wastewater Treatment Market: Revenue Forecast by End UserIndia, 2012 –2017



30P71D-15

End User Market Revenue Forecast Discussion

• The end user market can be broadly categorized into municipalities, commercial and

industrial.

• The municipalities have about 30.0 percent market share, commercial which includeshotels, institutions and hospitals have 20.0 percent market share and industries form themajor chunk taking 50.0 percent market share.

• The main driver among the end users is industries which is expected to have a CAGR of15.4 percent whereas municipalities and commercial are pegged at 10.0 percent growthrate.

• In the municipal segment the second tier cities are expected to be the major contributorwhere rate of wastewater generation is on a higher note.

• In the commercial segment it’s the green buildings that are expected to be key driverdue to higher rates of technology adoption.

• In the industrial segment food and beverage industries is the blooming sun growing at aCAGR of 25.0 percent followed by textile industry growing at a CAGR of 16.0 percent.




31P71D-15

Market Share and Competitive Analysis— Total Market



32P71D-15

Competitive Analysis—Market Share

* A list of ―Other ‖ companies can be found in the appendix. Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.

Key Takeaway: Smaller companies like cater to different market compared to bigger

players like due to lack of technology to treat complex impurities.

Ion Exchange

12% Aquatech Systems9%

Siemens2%

Aquadesigns4%

Driplex1%

Thermax

3%Degermont

6%

Shubham Inc.5%

Marcus water Treatment4%

RO Chem9%

Lotus EnvironmentTechnology Pvt. Ltd

1%Neela Systems

3%

Sai enviro1%

Others40%

Per Cent of SalesTotal Packaged Wastewater treatment Plant Market: India, 2012



33P71D-15

Market Share Analysis

Companies Revenue (INR Million)

Ion Exchange 195.0

Aquatech Systems 150.0

RO Chem 150.0

Degermont 90.0

Shubham Inc. 80.0

Others 935.0

Total 1,600.0

* A list of ―Other ‖ companies can be found in the appendix. Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.

Total Packaged Wastewater Treatment Plant Market:

Company Market Share Analysis of Top 5 ParticipantsIndia, 2012

The packaged wastewater treatment plant market is

highly fragmented. The top five players in the marketoccupy only 41 percent of market share. Ion Exchange

has been the market leader since long and is expected

to continue its position owing to wide portfolio of

products and better brand positioning. RO Chem sells

only patented systems which are expensive and have

very high profit margins. They sell packaged systemsonly for industries. Degermont is a relatively new

entrant in the packaged segment whereas Shubham

Inc. caters to both industrial and hotels segment. They

have MBBR, MBR as well as RO systems but the

capacity is limited to 300 KLD. Moreover they don’t

treat industrial waste water having oil, grease or dye asimpurities. Others form a major part of the market as

there are many small players like Driplex, Sai Enviro

etc. making the packaged wastewater treatment market

a fragmented one.







36P71D-15

Competitor Growth Analysis

Note: Bubble size represents relative capitalization. Thebase year is 2012. Source: Frost & Sullivan analysis.

G r o w t h r a t e 2 0 1 1

- 2 0 1 2

Ion-Exchange

Revenue ($ Million)

Aquatech Systems

Degermont

RO Chem

Key Takeaway: RO Chem is the fastest growing company in the packaged waste

water treatment plant sector with yoy growth rate of 20%Competitor Growth Analysis

Total Packaged Wastewater Treatment Plant: India, 2012



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Tier IIINR 20.0-150.0

Million(10-15 companies)

Tier I>INR 150.0

Million(3 companies)

Tier III<INR 20.0 Million

(400-450 companies)

Competitive Analysis—Market Share by Tiers

Key Takeaway: Market is expected to remain fragmented for the next five years.

Total market participants = 100-150


Total Packaged Wastewater Treatment Plant Market: Market Share Analysis by Tiers, India, 2012

Ion Exchange, Aquatech systems and RO Chemare Tier I companies operational in India. AmongTier-I companies RO Chem supplies only toindustries.

Aquadesigns, Siemens, Degermont, ShubhamInc. are among the Tier II companies operationalin India. The Tier II is the most competitivesegment of the industry.

Tier III companies form a huge chunk with about

37.5 percent market share by revenue. Theymostly cater to small municipalities and theircapacity ranges to 100 KLD.



38P71D-15

Technology matrix of Packaged Systems Companies

. Source: Frost & Sullivan analysis.

Key Takeaway: New technologies like FMR, UF, SBR are gaining ground

Name of the Company MBBR MBR RO FMR UF SBR UASB

Ion Exchange Y Y Y Y Y Y N

Aquatech Systems Y Y N N N N Y

Siemens Y Y N N N N N

Aquadesigns Y Y Y N N N N

Driplex Y Y Y N N N N

Thermax N Y Y N Y N N

Degermont Y Y N N N Y Y

Shubham Inc. Y Y N N N N N

Marcus water Treatment Y Y N N N Y Y

RO Chem N N Y N Y N N

Lotus Environment Technology Pvt. Ltd Y Y N N N N N

Neela Systems N N Y N Y N N

Sai enviro N Y Y N N N N

Technology used by Manufacturers, India, 2012

Y- yes & N- No



39P71D-15

• Product Quality: Product quality is important for industrial segment where higher profit margins can be

garnered by superior quality.• Reliability: Reliability is created by the prior experiences of the supplier and market brand name.

• Pricing: Prices still vary among suppliers due to differing technology, output specifications, reliability and

brand value.

• Vendor Client Relationship: Client relationships are very important when the product differences start

blurring out in small capacity systems of the order of 100 KLD.• Acquisition: Acquisition of smaller companies is essential to gain regional dominance because the

expertise needed to handle smaller clients at regional level would increase the operating and

administrative cost for bigger companies, so using the distribution network of smaller companies by

acquiring them would be an instrumental step towards market consolidation.

• Product Innovation: R&D has played an important role in product innovation. In a competitive marketproduct innovation plays a crucial role in tapping the market potential. It helps in generating higher profit

margins in the long run.

Competitive Factors and Assessment



40P71D-15

End-user Segment Breakdown

Municipal Packaged Wastewater Treatment Plant Market



41P71D-15



Market Revenue (2012) INR 480 M ▲



Market Size at End of Forecast Period (2017) INR 773 M ▲



Customer Price Sensitivity (scale of 1 to 10, Low to High) 5 ●

Degree of Technical Change (scale of 1 to 10, Low to High) 6 ●

Municipal Packaged Wastewater Treatment Plant Market- Market Engineering Measurements



Total Municipal Packaged Wastewater Treatment Plant Market: India, 2012


Municipal Packaged Wastewater Treatment Plant Market —



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0.0

2.0

4.0

6.0

8.0

10.0

12.0

0

100

200

300

400

500

600

700

800

900

2012 2013 2014 2015 2016 2017

Revenue (INR Million) 480 523 573 630 696 773

Growth Rate (%) 9.0 9.5 10.0 10.5 11.0

G r o w t h R a t e

( % )

R e v e n u e ( I N R

M i l l i o n )

Year

Total Municipal Packaged Wastewater Treatment Plant Market: Revenue ForecastIndia, 2012 –2017

CAGR = 10.0% (2012-2017)


Revenue Forecast

Key Takeaway: Growth is fuelled by Increasing adoption and government initiative.




43P71D-15

• The market share of municipalities in the packaged segment is 30 percent with a market

size of INR 480 million in 2012.• The major drivers for such systems are small towns that comprise generally of class-II

and class-III cities and villages where wastewater generation is increasing.

• The major restraint in the small municipalities is the lack of awareness and lack ofkeenness of adoption. They still discharge the wastewater directly into the water bodiesand there are no proper regulatory framework to oversee such environmental

degradation.

• Moreover lack of political will and initiative on the part of government has also lead toslow growth of such systems in municipalities.

• But states such as Bihar have taken initiative for providing zero interest loans for wastewater management start-ups. Such steps can go a long way in promoting this hugemarket which is almost untapped.


Municipal Packaged Wastewater Treatment Plant MarketRevenue Forecast Discussion

Commercial Packaged Wastewater Treatment Plant



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Market Size at End of Forecast Period (2017) INR 515 M ▲



Customer Price Sensitivity (scale of 1 to 10, Low to High) 5 ● Degree of Technical Change (scale of 1 to 10, Low to High) 6 ●


Commercial Packaged Wastewater Treatment PlantMarket - Market Engineering Measurements



Total Commercial Packaged wastewater Treatment Plant Market: India, 2012





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0.0

2.0

4.0

6.0

8.0

10.0

12.0

0

100

200

300

400

500

600

2012 2013 2014 2015 2016 2017

Revenue (INR Million) 320 349 382 420 464 515

Growth Rate (%) 9.0 9.5 10.0 10.5 11.0


R e v e n u e ( I N R M i l l i o

n )

Year

Total Packaged Wastewater Treatment Market: Commercial Market RevenueForecast

India, 2012 –2017 CAGR = 10.0% (2012-2017)

Key Takeaway: Growth is fuelled by green buildings and remote constructions.

Commercial Packaged Wastewater Treatment PlantMarket – Revenue Forecast




46P71D-15

• The market share of commercial in the packaged segment is 20 percent with a market

size of INR 320 million in 2012.• The major drivers for such systems are new hotels and Institutions coming up in class-I

and class-II cities where the rate of technology adoption is pretty high and lot of greenbuildings are coming up.

• Apart from these many companies like Oviva specialize in setting up packaged systemsin remote areas where there are mining camps, schools, hospitals and residential care

homes.

• The commercial market is expected to grow at a CAGR of 10 percent during the fiveyears from 2012-2017.

• The major restraint is in the minds of real estate developers that tend to charge high forbuildings with such facilities whereas such systems on the contrary have very lowoperating cost.


Commercial Packaged Wastewater Treatment PlantMarket – Revenue Forecast Discussion

Industrial Packaged Wastewater Treatment Plant Market -



47P71D-15






Market Size at End of Forecast Period (2017) INR 1,637 M ▲



Customer Price Sensitivity (scale of 1 to 10, Low to High) 5 ● Degree of Technical Change (scale of 1 to 10, Low to High) 6 ●


Industrial Packaged Wastewater Treatment Plant Market -Market Engineering Measurements



Total Industrial Packaged wastewater Treatment Plant Market: India, 2012


Industrial Packaged Wastewater Treatment Plant Market



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0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2012 2013 2014 2015 2016 2017

Revenue (INR Million) 800 907 1,039 1,201 1,399 1,637

Growth Rate (%) 13.4 14.5 15.6 16.5 17.0


R e v e n u e ( I N R M i l l i o

n )

Year

Total Packaged Wastewater Treatment Market: Industrial Market Revenue ForecastIndia, 2012 –2017

CAGR = 15.4% (2012-2017)

Key Takeaway: Growth is fuelled by Food and Beverage Industries giants.

Industrial Packaged Wastewater Treatment Plant Market – Revenue Forecast

Industrial Packaged Wastewater Treatment Plant Market



49P71D-15

• The market share of Industries in the packaged segment is 50 percent with a market

size of INR 800 million in 2012.• The major drivers in the industrial segment are the Food and Beverage Industry which is

expected to witness a CAGR of 25 percent over the next five years from 2012-2017.

• Textiles and pharma are also key industries with CAGR of 16 percent and 15 percentrespectively where packaged systems see a huge demand.

• The capacity of packaged systems generally installed in pharma industries is of theorder of 200-300 KLD but the quality of water generated is very high. So packaged ROsystems have been used a lot in pharma industry.

• Higher capacity systems of 500 KLD are mostly deployed in distillery which presently isgrowing at a moderate CAGR of 9 percent.

• The overall Industrial market segment is forecasted to grow at a CAGR of 15.40

percent.


Industrial Packaged Wastewater Treatment Plant Market – Revenue Forecast Discussion



50P71D-15

State Suitability and Industry- Breakdown



State Suitability and Industry Breakdown Analysis



52P71D-15

State Suitability and Industry Breakdown AnalysisDiscussion (continued)

• The top 5 states for implementation of Packaged Systems in Pharma Industry are

Maharashtra, Delhi, Tamil Nadu, Andhra Pradesh and West Bengal.• The high concentration packaged food industry in Delhi coupled with space constraints

have surged the demand of such systems in these states and union territories.

• So finally to arrive at the combined state suitability these five industries where packagedsystems are used have been considered.

• The top 5 states where there are highest demand of packaged systems in industrialapplications are Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu and West Bengal.

• The greatest driving force have been the food and Beverage Industry followed by TextileIndustry and Pharma Industry.




53P71D-15

End-user Segments Overview

C t ti I d t O i



54P71D-15

Construction Industry Overview


ConstructionIndustry

Real estate

Residential

Commercial

Retail

Hospitality

SpecialEconomic

Zones

Infrastructure

The Construction Industry is the second largest economic activity of

India after agriculture and has been growing at a CAGR of 11.1percent over the last eight years.

The Real estate segment contributes to around 76 percent of thetotal construction market by GDP.

The booming real estate market has been pegged at 66.80 billionUS$ in 2011 and has been estimated to grow at a CAGR of 20percent owing to the acute housing shortage coupled with expectedinflow of foreign capital.

The Residential market has a major chunk of around 90 percent inthe real estate market followed by commercial and retail segmentwith a share of 4 percent and 2 percent respectively.

The hospitality segment is in very premature stage and is highlycorrelated to industrial growth.

The hospitality segment consists of hotels that can be furthercategorized into economic and premium hotels.

C i l S t



55P71D-15

Commercial Segment

Source: ICRA & Frost & Sullivan analysis.

0

50

100

150

200

250

300

2004 2006 2008 2010 2012 2014 2016 L e a s e R e n t a l s ( r s / s q f t / m o n t h )

Year

Average lease rental :Indian cities(indexed

to 2005)8 9

12

12

2

19

20

18

Commercial office space absorption: Indian cities,

rating,2012 (%)Pune

Mumbai

Chennai

Kolkata

Hyderabad

NCR

Bangalore

Others

The commercial office market is fragmented with very few big players.

The demand for office space is increasing more in Kolkata and Tier-II cities owing to high rentalprices in Mumbai and other region.

Presently the supply outstrips demand as in the year 2013 the demand is expected to be around55 million square feet whereas the supply figures soared to 180 million square feet.

In the coming years the supply demand gap is expected to narrow down to increase theoccupancy rates to around 90 percent by the end of 2014 which would lead to new projects incommercial office segment.

R t il S t



56P71D-15

Retail Segment


0

2

4

6

8

10

12

2010 2011 2012 2013 2014

Demand Projections Across top 7cities(million square feet), India, 2012

0123456789

Demand Analysis of Top 7 cities(millionsquare ft.), India, 2010-2014

Demand for retail space grew from 4 million square feet in 2010 to 11 million square feet in 2011. The Indian retail market stands $500 billion presently which is expected to rise to $900 billion by

2020. Organized retail is expected to increase from $25 billion to $250.00 billion by 2020. The retail industry is expected to grow at a CAGR of 14 percent in the short term and 19 percent in

the next 5 years. The Emergence of foreign direct investment in retail sector would open the gateway for mega retail

outlets which would lead to a spurge in the construction of hyper markets and supermarkets. Presently there are 59 malls in the construction phase and most of them are concentrated in the

NCR, Bangalore and Chennai. Apart from these many new retail projects are coming up in TIER-II cities but they are being

developed by local developers.

Hospitalit Segment



57P71D-15

Hospitality Segment


Group Existing Hotels Planned Hotels By

Marriot international 18 80-100 2015

Hilton worldwide 8 50-100 2016

Intercontinental Hotels Group 12 150 2020

Accor group 13 90-100 2015

Choice hotels international 27 100 5-7 years

The growth in hotel industry is directly linked to tourist industry and industrial growth. The touristindustry is growing at a CAGR of 5 percent and the trend is expected to be stable and continue.

Presently there are around 1,70,000 hotel rooms in India across all segments of which 60,000 arebranded and around 60,000 hotel rooms are expected to be added in the next 3-5 years.

Almost all major hotel groups are having huge expansion plan and aim to increase their numbers by

five times in the next five years. The occupancy rates of premium hotels which dropped below 50 percent during 2008 has picked up

to touch the Asia average of 75 percent. Private equity players are more interested in Mid- size and budget hotels that work on asset light

models rather than asset heavy models that take huge time to become profitable. Easier financing, public- private partnership are the key drivers whereas execution delays and

soaring interest rates are the major constraints.

Hotels & their Expansion plans, India, 2012

F d P i & B I d t i



58P71D-15

Food Processing & Beverage Industry overview

Source: Ministry of Food Report & Frost & Sullivan analysis.

FoodProcessing

andBeverageIndustry

Meat, Fish,Fruit &

vegetables

Dairy Products

Grain mill,starch and

animal feeds

Bakery, sugar,cocoa, cereals

and similarproducts

Beverages

including softdrinks, alcoholetc.

Among all the sectors the Dairyand fruits and vegetables sectoris oligopolistic with HerfindahlHirschman index between 0.2-0.7.

Delhi, Maharashtra, West Bengal& Tamil Nadu comprise of 53%

of Beverage industry. Fish & fruits & vegetables export

is declining due to increasinglocal consumption. In fact thegrowth rate of this sector hasbeen low to meet the increasingdemand.

Dairy giants like Gujarat

cooperative milk marketingfederation that markets the Amulbrand has extensive plans toinject Rs. 3000 crores over thenext five years in the dairyindustry.

Classification of Food & Beverage Industry, India, 2012

Food Processing & Be erage Ind str o er ie (cont)



59P71D-15

Food Processing & Beverage Industry overview(cont)…

• India holds a prominent position in the production of agricultural, horticultural and dairy

products but the processing industry is ate very low levels of 2.2 percent compared toEuropean and U.S counterparts.

• India currently ranks at the bottom for the processed food sector and is essentially a netimporter as per trade competitive map.

• The Indian food market is estimated to be around $69.4 billion of which value added foodproducts comprise of only $22.20 billion.

• The food processing industry is witnessing an annual growth of 20 percent and thedemand is expected to double by 2020.

• The processed food industry is derived from agro products and incurs taxes at multiplelevels. This multiple taxing combined with varying tax rates across states is a barrier infood processing industry.

• Another critical restraint in food processing industry is the lack of refrigerated foodstorage facilities which is in dismal condition and also highly priced which is reflectedfrom the fact that 20 percent of the potato cost is attributed to refrigeration.

• Foreign direct investment in food and retail sector would play a big role in eliminating therestraints and leading to robust growth of this industry segment.


Pharma Industry overview



60P71D-15

Pharma Industry overview

Source: Economic Times & Frost & Sullivan analysis.

The global pharma industry are fragmented between high growing developingmarkets and slowly growing developed markets.

India ranks third largest by volumes and tenth largest by value. The market is expected to grow at 12-14 percent CAGR to become a $20-$24 billion

market by 2015. The key drivers propelling the market are rising incomes, enhanced medical

infrastructure, rise in prevalence and treatment of chronic disease, greater healthinsurance coverage, launches of patented products and new market creation.

The launch of branded generics and significant expansion of market coverage bymultinational coupled with mergers and acquisitions illustrate the new marketcreation.

The tier-I and tier-II cities would lead the growth baton as health insurancepenetration to increase to 45 percent of population by 2020.

The health care spend by both central and state governments have shown increasingtrend with a CAGR of 18 percent.

Measures like 100 per cent foreign direct investment(FDI) in the pharmaceutical anddrugs sector and the establishment of pharmaceutical special economiczones(SEZ’s) have attracted global pharmaceutical MNCs to India.

Distillery Industry overview



61P71D-15

Distillery Industry overview


Sugar,molasses

Alcohols,ethanol,

methanol,etc.

DistilleryIndustry

Presently in India there are 579 sugar

mills and 325 distilleries(alcoholic,ethanol, etc.) in India.

There are two categories of watertreatment facilities required indistilleries, one water treatment andthe other wastewater treatment.

Currently about 45.72 million metrecube of spent wash is generatedannually from distilleries alone in India.

Most of the distilleries are located around Uttar Pradesh, where there are highconcentration of sugar mills because of the ready availability of sugarcane.

The decontrol of sugar industry and abolition of release order mechanism would allowthe sugar mills to set up the selling prices thus making it more profitable for newentrants.

Moreover if any entity wants to establish new sugar mill or wants to expands theirexisting capacity, it will be given rebate on land registration fee and stamp duty.

Such measures make Uttar Pradesh and Maharashtra a prime location for distilleryindustry growth thus opening the gate ways for packaged wastewater treatmentsystems.

Textile Industry overview



62P71D-15

Textile Industry overview

Source: Textile Ministry Report & Frost & Sullivan analysis.

73

8

11 6 2

Break up of textile companies, India,2012

Cotton

Manmade

Blended

Silk

Others

01020304050

Diversify New market &Market related

Plans

CapacityExpansion

Future Plans of textile industry break down,India, 2012

The Indian Textile and apparel industry is estimated to be around $36 billion in the year 2012accounting to around 15 percent of India’s exports.

The textile industry is expected to grow at a CAGR of 16 percent per annum for the next five years. Presently India’s share in Global textile industry trade is 3 percent and the government aims to

increase it to 10 percent by allowing 100 percent Foreign direct investment in the textile sector andexecuting technology mission on cotton.

22 percent of the companies have shown revenue growth up to 30 percent in the last couple of

years. The major hindrances faced by the textile industry are Infrastructure, taxes and duties and lack of

government subsidies. 50 percent of the sample companies are private limited, 10 percent are public limited, 26 percent are

partnerships and 14 percent are proprietary firms. 40 percent of the private limited companies are in the turnover bracket of Rs 40 million – 100 million.

About 22 percent of the private limited companies are in the turnover bracket of Rs 100 million – 250million.



63P71D-15

The Last Word

The Last Word Three Big Predictions



64P71D-15

The Last Word—Three Big Predictions

2Mergers and Acquisitions are anticipated to give access to superiortechnology for small companies.

3RO based packaged systems would gain immense popularity in the nextfive years.

1

Food and Beverage, Pharmaceuticals and Textile industry will be the mostpromising industrial segment for packaged wastewater systems. In hotelsand Institutions green buildings would be a thriving market for packagedsystems.


Legal Disclaimer



65P71D-15

Legal Disclaimer

Frost & Sullivan takes no responsibility for any incorrect information supplied to us by

manufacturers or users. Quantitative market information is based primarily on interviewsand therefore is subject to fluctuation. Frost & Sullivan research services are limited

publications containing valuable market information provided to a select group of

customers. Our customers acknowledge, when ordering or downloading, that Frost &

Sullivan Research Services are for customers’ internal use and not for general publication

or disclosure to third parties. No part of this Research Service may be given, lent, resold ordisclosed to noncustomers without written permission. Furthermore, no part may be

reproduced, stored in a retrieval system, or transmitted in any form or by any means,

electronic, mechanical, photocopying, recording or otherwise, without the permission of the

publisher.

For information regarding permission, write to:Frost & Sullivan

331 E. Evelyn Ave. Suite 100

Mountain View, CA 94041



66P71D-15

Appendix

Market Engineering Methodology



67P71D-15

Market Engineering Methodology

One of Frost & Sullivan’s core deliverables

is its Market Engineering studies. They

are based on our proprietary Market

Engineering Methodology. This approach,

developed across the 50 years of

experience assessing global markets,

applies engineering rigor to the oftennebulous art of market forecasting and

interpretation.

A detailed description of the methodology

can be found here.

Source: Frost & Sullivan research.

List of Companies Included in the Others Category

http://www.frost.com/prod/servlet/me-research.pag

http://www.frost.com/prod/servlet/me-research.pag



68P71D-15

List of Companies Included in the Others Category

GE Water

Siemens Water

Doshion Veolia

Nilson NishotechGrey Water Solutions

Permionics

Trans Organics

Watertec Enterprises

UEM India

Chemtronics


Partial List of Companies Interviewed



69P71D-15

Partial List of Companies Interviewed

Ion Exchange

Aquatech Systems

Siemens

Aquadesigns

Driplex

Thermax

Degermont

Shubham Inc.

Marcus Water Treatment

RO Chem

Neela Systems


Acronyms and Abbreviations Used



70P71D-15

Acronyms and Abbreviations Used

Abbreviations & Acronyms Full Form

BOD Biochemical oxygen demandCAGR Compound Annual Growth Rate

CAPEX Capital Expenditure

CL Chlorination

CPCB Central Pollution Control Board

FDI Foreign Direct Investment

FMR Fluidized media reactor

GDP Gross Domestic Product

INR Indian Rupees

MBBR Moving bed biofilm reactor

MBR Membrane bioreactor

MOFPI Ministry of food processing industriesN No

NA Not Applicable

Pharma Pharmaceutical

R&D Research and DevelopmentSource: Frost & Sullivan research.



Additional Sources of Information on Environmental



72P71D-15

Technologies and Frost & Sullivan

Frost & Sullivan's Environmental Technologies Research and Consulting practice is part of

Environmental and Building Technologies Practice

http://www.frost.com/prod/servlet/svcg.pag/EVEV

http://www.frost.com/prod/servlet/svcg.pag/EV00

Join Frost & Sullivan’s Global Community of Growth, Innovation, and Leadership

http://www.gil-global.com

Previous Analyst Briefings

http://www.frost.com/prod/servlet/analyst-briefings.pag?ref=RHC

Past Webcasts

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Learn More—Next Steps



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73P71D-15

Learn More Next Steps

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