Directives Drive Growth in Central and Eastern European Municipal Water and Wastewater Treatment
The fulfilment of reforms and liberalisation processes in the water sector, started in late 1990s in most of the Central and Eastern European (CEE) countries has been vital for the region’s steadily growing municipal water and wastewater treatment equipment market. To strengthen the reforms process, private companies need to increase their investments and the municipalities will have to improve their financial and operational efficiency to attract investment as well as to successfully secure loans. This will help the sector in meeting the treatment standards and in attaining financial sustainability.
The EU funding is a vital financing mechanism for this market as it aims at assisting new member states and candidate countries to upgrade the water and wastewater infrastructure in the region to meet the EU standards.
A key challenge to this market is that the new member states and other CEE nations are still in the process of harmonising the EU directives. Harmonisation involves transposing the water directives into national legislations, formation of river basin districts and classifying Sensitive Areas under the Urban Waste Water Treatment Directive, notes Frost & Sullivan (http://environment.frost.com), Environmental Analyst Fredrick Royan.
The state institutions in the candidate as well as new member states dealing with the implementation of legislations are under tremendous pressure to comply with the legislations within the tight schedule.
Further, the differing rates of economic growth in the CEE countries result in distortion of priority levels for water and wastewater treatment investment across these nations. While countries such as Poland are experiencing a phase of economic growth, others such as Ukraine and Croatia are still experiencing instability.
Manufacturers can counter this situation by identifying the markets to focus on and creating innovative strategies aimed at the key growth segments that will ultimately provide customised services to the individual end users, stresses Royan.
Moreover, the buoyant CEE municipal water and waste water treatment equipment market being price sensitive, vendors must establish local partnerships and concentrate on niche regional markets or product segments such as treatment plants for smaller communities to stay competitive.
The equipment suppliers from outside the CEE region should concentrate on achieving a high degree of operational efficiency to ensure regional success. For instance, Zenon a world class original equipment manufacturer (OEM) of membranes has established itself in Hungary by setting up a manufacturing facility and has also set up a pilot wastewater treatment plant. As a result, the company is well-poised to tap the long-term potential that membranes have in water and wastewater treatment sector in the CEE municipal market.
Treatment equipment manufacturers by establishing strategic partnerships can strengthen their competitive and market position. The water treatment infrastructure in most of the CEE countries needs up-gradation, as currently the traditional methods of clarification, filtration and chlorine dosing are used. Wastewater currently is largely restricted to mechanical and physical treatment and will necessitate the installation of biological treatment processes at the least and in few cases such as Sensitive Areas, tertiary and advanced treatment it will also be required to comply with requirements of the Urban Waste Water Treatment Directive (UWWTD).
Overall, water and wastewater treatment equipment suppliers need to follow a long-term approach when they venture into the CEE market. Suppliers that are able to establish themselves in the current phase of growth will be well placed to tap into qualitatively enhanced opportunities in the developed CEE municipal sector in seven to ten years time.
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