NEWS RELEASE APRIL 2005
Water Niches Provide Attractive Investment
The world water industry has come to the attention of the investor community. As a result, a number of public companies are trading at high multiples.
The McIlvaine Company in its continually updated, Water, Wastewater, and Filtration: World Markets, predicts that despite high present multiples, early growth for some of these companies will justify the price. Those companies will be maximizing revenues in high growth niches which are industry, geographically and technology oriented.
Industry niches ranked in terms of growth potential:
- Desalination of seawater
- Water reuse
- Point-of-entry filtration
- Synthetic oil
Desalination costs are shrinking while treatment costs of surface water treatment are rising. Therefore, desalination will increasingly become the more economic choice.
Investment in water reuse projects is slated to increase at more than 15 percent per year over the next decade.
Point-of-entry residential treatment provides homeland security benefits that central systems cannot achieve. Furthermore, the concept has appeal to individuals willing to pay 1000 times as much for bottled water as municipal.
Filtration pumping and monitoring of coal liquids is a big long-term growth market. Coal can be converted to oil at less than $35 per barrel. The present price of oil will result in big investments in coal liquefaction. Extraction of oil from tar sands is a big and growing business. Extraction from shale is also a potential. Bio diesel fuels and ethanol are growth markets. All these oil alternatives are big growth markets.
The geographical niche is Asia. The water, wastewater and filtration market in Asia will grow at double-digit rates. China will lead the way with annual growth rates close to 15 percent.
Several technologies promise higher than average growth rates. Membrane separation including revenue osmosis, ultrafiltration, and microfiltration is an attractive niche due to both revenue growth potential and dynamic technology differentiation.
Monitoring of organics and biological agents is an expanding market driven by both general health and homeland security concerns.
For more information on Water, Wastewater and Filtration World Market, click on: Water, Wastewater, and Filtration: World Markets http://www.mcilvainecompany.com/water.html
