Opportunities in the Indian Packaged Wastewater Treatment Plant Market Page 1 of 2

Frost & Sullivan Market Insight Published: 5 Jan 2010

Opportunities in the Indian Packaged Wastewater Treatment Plant Market

Date Published: 5 Jan 2010

By Nitin Saran, Research Analyst - South Asia & Middle East, Environment & Building
Technologies

Who would have thought that, in only a decade or two, a humble plastic bottle of processed
water, exoticised as ''mineral water,'' would be as ubiquitous in paan shops in three-tier towns
as in international airports in metropolitan India. The water business was underestimated in the
past, and we could end up repeating this monumental mistake if we failed to, this time, note the
palpable market for "Packaged Wastewater Treatment Plants." It is multiplying manifold as
industrialization sweeps this country and the economy forges ahead. Fueling this further is
India's restrained water resources.

Fig 1: Life Cycle Analysis, Packaged Wastewater Treatment Plant Market, India, 2009-2014

Customization is just one of the many options available that we can choose or drop in view of
pressing factors such as a general space crunch that bothers many small to medium industrial
and commercial units, while setting up an effluent treatment plant. Packaged wastewater
treatment plants or packaged STPs are perfect solutions to meet the effluent treatment needs
without occupying much footprint. The capacity of packaged wastewater treatment plants can
stretch from 50 KLD to 100 KLD, with an impressive 500 KLD as the outer limit.

The accelerated growth rate seen in the commercial sector (hotels, hospitals, institutions,
software parks, shopping malls) and small- and medium-scale industries (food and beverages,
sugar, distilleries, automotive component manufacturing, pharmaceuticals) has imparted thrust
into this market. Frost & Sullivan estimates that the market for packaged wastewater treatment
plants is likely to be in the range of $40.0 – $45.0 million (INR 180 – 200 crores). Though the
real estate market suffered heavily following the U.S. sub-prime crisis, it has shown signs of
recovery in the past three to four months. Revival of these segments means that an average
annual growth rate of 13-14 percent would be within reach for the packaged wastewater
treatment plant market in the next two to three years.

Regulatory Trend

The pressure on central and state governments mounts as increasing pollution of water
resources creates concern, especially about rivers and ground water resources, which the
common man depends on for drinking water. This has resulted in greater political zeal to
mitigate effects of previous corruption and lax law enforcement vis-à-vis environmental norms.
This increases the demand for packaged wastewater treatment plants, which soars with each
new wave of industrial progress.

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Opportunities in the Indian Packaged Wastewater Treatment Plant Market Page 2 of 2

Current Market Trend

Packaged Wastewater Treatment Plants can be seen in factories, IT parks, shopping malls,
buildings, hospitals, hospices, resorts, etc. -- wherever wastewater is produced in large
quantities and comes in the jurisdiction of government bodies.

The exponential growth of the service sector in India has given a particularly strong boost to
demand for packaged wastewater treatment plants just as it has promoted the real estate
industry. Water treatment becomes even more of a priority once the real estate gains in value.
Liquor distilleries, food and beverages, and other agro-based industries, whether they are small-
scale or medium-scale, need wastewater treatment plants, as do all commercial enterprises that
employ labor exceeding a critical volume.

Due to the pattern of industrial development and the undeniable achievements of the
commercial sector, state governments are drafting specific economic and regulatory policies to
attract industrial and Information Technology investments, which should encourage packaged
wastewater treatment plants. If the pre-economic meltdown trends are sustained, the demand
for wastewater treatment in India is indubitably heading skyward.

End-User Analysis

Real Estate1: The global recession has had wide-ranging ramifications in India as well. The real
estate industry showed its share of these, nevertheless, the sector is expected to gain
momentum spurting from 211 million sq. ft. to 243 million sq. ft in 2009. This will stimulate
sales for packaged wastewater treatment plants because of the national norm in India that
stipulates no establishment with more than 50 people can be without a wastewater treatment
plant.

Food & Beverages2: A sure shot booster for the packaged wastewater industry in India lies in
the processed food industry. The Indian processed food output is slated to grow by 44.2 percent
to scale $90.10 billion. The reason? This industry produces a lot of wastewater, and its growing
output would require a proportionate increase in packaged wastewater treatment plants: a huge
driver indeed.

Pharmaceutical3: The huge scope for growth in the pharmaceutical sector is undoubtedly
another driver for the market. The scene here is full of good cheer, with the Ministry of
Commerce estimating domestic investment alone in this industry to be an astounding $6.31
billion. Drugs and Pharmaceuticals from April 2000 to December 2008 gained Foreign Direct
Investment of $1.43 billion. This industry can claim an average annual growth rate of 9.9
percent until 2010, according to current expectations, and only a slight dip to 9.5 percent until
2015. This is proof that prospects are hoping for growth in packaged wastewater treatment
plants that will also reap the benefits.

Textile4: The Indian textile industry was estimated to be about $52 billion in 2008 and is likely
to reach $115 billion by 2012. The domestic market is likely to increase from $34.60 billion in
2008 to $60 billion by 2012. Furthermore, 100 percent FDI is allowed through the automatic
route.

Conclusion

An inherent feature of the Indian packaged wastewater treatment industry is that it is

particularly amenable to engineering capabilities and innovation. New companies in this industry
actively pursue and execute turnkey solutions for effective wastewater management. Thus, the
future of packaged wastewater plants looks promising due to the slow but steady
implementation of regulatory norms and increasing awareness.

Sources:

1
Frost & Sullivan
2
India Food and Drink Report Q3 2008 by research analysis firm Research and Markets
3
IBEF (India Brand Equity Foundation)
http://www.ibef.org/industry/pharmaceuticals.aspx
4
IBEF & ASSOCHAM study

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