Defining the differences between the commercial and industrial sectors in the water treatment industry (C&I)
For a long time, the commercial and industrial (C&I) markets have been accepted as one sector of the water industry. Although considered different from such other markets as residential, agricultural and wastewater, there is a large murky area when being separated from each other.
With the recent proposals to create standards for the C&I markets comes the question of whether C&I should continue as one sector or be severed into separate entities. If a separation is in order, should it be determined by the application, flow rate or size of the equipment?
Defining the Markets
The Water Quality Association (WQA) and other organizations classify these markets as one to create a larger group, making it easier to draw members. "The reality is that the C&I markets don't have enough critical mass to really survive [on their own]," says Jim Baker, president of AmeriWater. "So organizations associate them as one to form a larger group."
Some people in the industry feel strongly about separating these markets, but most aren't sure how to set the boundaries. This is an area only beginning to advance to the level of discussion. "When trying to define these and make a clear difference between residential, commercial, industrial and ultrapure, you can talk about it and try to describe it but you have to be careful when drawing lines," Baker says. "It really gets difficult because there is a lot of gray area in between."
Most often, commercial applies to applications such as restaurants, hotels, camps, laundries, hospitals and car washes, to name a few. Applications that have a retail end to them are what many people consider the defining element. This market ranges from small commercial applications (sometimes confused with residential applications) to large applications that are frequently confused with industrial applications. The commercial market is a large market that includes uncommon applications such as grocery stores, commercial photo establishments, physical fitness facilities, engineering services firms and optometrists' offices.
The ultrapure market also is hard to define because it gets hazy around the industrial market. "If you are in electronics or pharmaceuticals, you are definitely in the ultrapure market," says Baker. "However, you can run a system that is an awful lot like those high-tech ultrapure market systems for other processes such as in cosmetic manufacturing or a painting operation. There are a lot of similarities in low conductivity-type systems."
Much like the commercial market, the outlook for defining the separation of ultrapure and industrial is dismal; everyone seems to have his own definitions that work for his individual company.
"We cover ultrapure and industrial as being the same," says Frank Slejko, publisher of Ultrapure Water. "There is some low-tech industrial business but the players are the same, the equipment is the same, there's just not as many steps in the purification process. I consider everything that requires water that's deionized vs. softened as ultrapure water."
With the previous two markets loosely defined, the industrial market should just fall into place, but it doesn't. Many applications are still left to question which way they fall.
"You have a lot of applications that fall in between commercial and industrial and industrial and ultrapure, and they are not clearly one or the other," says Peter Censky, executive director of the WQA. "For instance, the small municipals/systems market is a case in point. The equipment might be for an industrial application in one company but identical equipment at another company might be defined as being for a large commercial application."
Industrial applications often include large factories, computer chip operations, cooling systems, power plants and boiler treatment operations. But where the lines tend to blur is when discussing amusement parks, dental offices, paint shops, etc. For example, a dental office requires ultrapure water, yet, the size of the equipment leads some people to call it a commercial application.
"I think of industrial as manufacturing, research, sciences and universities," says Frank DeSilva, national sales manager at ResinTech, Inc. "Also, much of commercial is softening and reverse osmosis (RO). Industrial is softening, RO, deionization and other ultrapure processes. As far as I know there are not too many commercial applications for deionization or demineralization."
Settling the Confusion
A lot of confusion has occurred from one company naming an application commercial and another naming it industrial. How does each define its markets?
Censky believes two things: There isn't a well-formed commercial or industrial market yet, and nobody has any idea how to define either of them. Many sides have been argued about how these markets should be determined, but the most common ones are by application and by the flow rates/equipment size.
The most often made argument is on the side of application. "The decision seems to be application-driven," Baker says. After all, most professionals can look at the application and categorize it as being either commercial or industrial without knowing anything about the process or equipment involved.
Defining the markets by the applications is something that is already a common practice in everyday discussion. When speaking of a car wash, thoughts turn directly to commercial images. On the contrary, when speaking of nuclear plants thoughts immediately turn toward industrial images. It is the end user that tends to tell us the most information, explains DeSilva, yet suddenly, when taking into account all of the information, sight of a clear definition is lost once again. "It's easy when someone looks at an application, to say 'that's industrial or that's commercial,'" Censky says. "But if they try to define them, that's when it gets a little fuzzy in terms of do you define it by gallons per minute (gpm) or gallons per day, or the size of the equipment? I think it comes down to defining it by usage."
Equipment size and flow rate.
Perhaps the answer is in the size. Many dealers handle only equipment of particular sizes. "Most of the dealers who handle commercial products have a limit of the size of their units such as 25 to 50 gpm," Slejko says. "And that's really very small compared to the thousands of gallons per minute typical of large industrial systems." From 25 gpm to thousands, such a wide range from the commercial to industrial leaves a lot of room to draw a line between the two. The trick will be to get everyone in the industry to agree on where the line will be drawn.
Various sizes have been offered to determine the market such as commercial is using less than a ¾-inch line size. "But that's not entirely true," DeSilva says. "There are a lot of high purity industrial applications that use smaller than ¾ inch. Judging by applications is probably more accurate. For example, you sell a softener to a laundromat, and it's clearly commercial, but you take a Las Vegas hotel-they use giant softeners-that's not an industrial application."
"The best way to get a handle on the confusion that exists here is for us to accept the fact that water is used in just about every aspect of human existence," Censky says. "Because water is so widely used and readily available, we tend to be add-ons to a whole number of different industries. In a sense, we are enhancers to a number of other industries, and we tend to lump all those other industries into commercial, industrial or household markets but they are all vastly different. For example, for one company to do commercial work in the hotel industry doesn't mean it is qualified to do commercial work in the dental industry."
Is There Agreement on the Horizon?
For some, the markets should definitely see some separation. Recognizing two separate markets won't make any difference for others. "It's the business that defines the market," says Slejko, who thinks that too much time is being spent defining the markets when it can be spent with customers. "If you can handle it, you should get it. The whole discussion-whether it falls under commercial or industrial-is just an exercise in futility."
The future of the C&I market is a blank page. Much discussion will continue before any agreements are made. "What eventually I think will come about is a set of standardized reference terms," Censky concludes. "There will never be standards that say 'an ultrapure piece of equipment is the following' because that definition is determined by how the user uses it, not by how we define it. We ought to be talking about the industries we serve rather than the industry that we are."