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Indian Water Chemicals Market: An Overview
The Indian market for water chemicals is just 1.5 per cent of the global market. Though, the market has grown from USD 0.2 billion in 2009 to its existing size of USD 0.4 billion at a CAGR of 12 per cent over 2009-14 and in the next five years this growth rate is projected to further accelerate to ~15 per cent per year, leading to a market size of USD 0.8 billion by 2019. This makes India one of the fastest developing markets and presents a remarkable prospect for both global and Indian companies. The Asia-Pacific market is growing at a CAGR of ~8 per cent compelled by escalating standards of industrial water quality, adoption of complex manufacturing processes and strong economic growth resulting in greater municipal and industrial spending in water treatment efforts. Growth is also driven by rise in environmental concerns and superior efforts to modernise municipal water treatment facilities. The article explores Global Water Chemicals Market Scenario, Parameters responsible for growth of the Indian market and competitive landscape for the global players
Water treatment chemicals are used to add some specific properties to water or alter the physical or chemical properties of water for domestic, commercial and industrial applications. The industrial applications of water treatment chemicals largely entail waste water management, and enhancing efficiency of industrial equipment by minimizing corrosive and other adverse impacts of water.

Based on their action, water chemicals are further classified into coagulants, flocculants, biocides, disinfectants, algaecides, defoamers, neutralizing agents, oxidants, oxygen scavengers, pH adjusters, boiler water chemicals, resin cleaners and scale inhibitors.

Global Water Chemicals Market – An Overview
The global market for water chemicals in 2014 is estimated at USD 25.1 billion. In the past five years the market has grown from USD 19.1 billion at a CAGR of 5.6 per cent. From 2014 to 2019, the market is estimated to grow at 5.8 percent p.a to reach USD 33.3 billion by 2019.

There are large global players operating in this space such as Nalco-Ecolab (USA), Kemira (Finland), Solenis (USA), Kurita (Japan), BASF (Germany), Air Products and Chemicals Inc. (USA), AkzoNobel (Netherlands), Dow Chemical Company (USA), BWA Water Additives (UK), GE Water & Process Technologies (USA) and Lonza Group (Switzerland). Many of these are present in India.

The Asia-Pacific market is growing at a CAGR of ~8 per cent driven by rising standards of industrial water quality, adoption of complex manufacturing processes and strong economic growth resulting in greater municipal and industrial spending in water treatment efforts. Growth is also driven by increase in environmental concerns and greater efforts to modernise municipal water treatment facilities.

Indian Water Chemicals Market - A Fast Growing Space
The Indian market for water chemicals is just 1.5 per cent of the global market. However, the market has grown from USD 0.2 billion in 2009 to its present size of USD 0.4 billion at a CAGR of 12 per cent over 2009-14 and in the next five years this growth rate is expected to further accelerate to ~15 per cent per year, leading to a market size of USD 0.8 billion by 2019. This makes India one of the fastest growing markets and presents an interesting opportunity for both global and Indian companies.



The short term growth in demand for water chemicals would be largely fueled by the stricter industrial effluent discharge norms being enforced by the Central Pollution Control Board. Power and energy sectors are the largest industrial consumers of water chemicals (constituting ~88 per cent of the total industrial water consumption in India). Power plants require cooling and boiler chemicals for controlling corrosion and boiler treatment, respectively. India has a huge power deficit, and the Government has been planning several power projects since past few years which are expected to be commissioned soon, further boosting demand for the water chemicals industry. Other major industrial uses are engineering, pulp and paper, textiles, steel, sugar and fertilizers.

The long term growth for water chemicals will also be driven by municipal water consumption. The growing urban population is adding to the demand for water purification and waste water management across India. As per the 2011 census, more than 30 per cent of the Indian population lived in urban areas and this is expected to grow to nearly 40 per cent over the next decade. In the long run there may be a huge demand from implementation of the government's vision of 100 new 'smart' cities and 'Swachh Bharat' mission.



Irrigation has traditionally been the largest consumer of water (76 per cent of the total water consumption in India). The segments employing water treatment chemicals, municipal and industrial segments, together constitute ~18 per cent of the water consumption in India. Most industrial water treatment companies produce a variety of products used commonly across these end industries. In terms of application, coagulants and flocculants constitute the largest segment, ~38 per cent of the total market, followed by biocides and disinfectants, constituting ~19 per cent of the market. Other large segments are defoamers (7 per cent share) and pH adjusters (5 per cent share).

The growth of these segments is driven by their end-use applications. Coagulants and flocculants are used for waste water management and are replacing traditional products such as alum. Driven by high growth industrial and municipal water treatment, coagulants and flocculants are expected to grow at ~17 percent.

Biocide and disinfectant market in India is expected to grow at 15 per cent driven by demand from oil and gas (eg. application in drilling fluids, where the drilling efficiency increases greatly by eliminating microbial growth), hygiene and industrial preservative industries. The other segments including defoamers and pH adjusters are small, but growing segments. Defoamers find application in the pulp and paper, and oil & gas industries and are expected to grow at 9 per cent. pH adjusters are expected to grow at 12 per cent, driven by their application in the rapidly growing soil treatment market in India.

Competitive Landscape of the Indian Water Chemicals Market


Value Chain of the Water Treatment Industry

The major global players include Nalco- Ecolab (USA), Kemira (Finland), Solenis (USA), Kurita (Japan), BASF (Germany), Air Products and Chemicals Inc. (USA), AkzoNobel (Netherlands), DowChemical Company (USA), BWA Water Additives (UK), GE Water & Process Technologies (USA) and Lonza Group (Switzerland). Many of these are present in India.

In the water chemicals market, most players are integrated end to end water solutions providers or are in process of expanding in the value chain. Players such as Thermax, Ion Exchange and Nalco (Ecolab) are end-to-end water solution providers and are present across the value chain. They have their own water chemical manufacturing capability, provide complete water projects on a turnkey basis (including EPC) and provide onsite service support as well. Water treatment companies such as VA Tech Wabag and Siemens do not operate in chemical manufacturing segment, but focus on construction and maintenance of water treatment plants. There are a few mid–scale players such as Vasu Chemicals and Chembond which are pure–play chemical manufacturers operating in this segment.

It is estimated that 80 per cent of market share for water chemicals in India belongs to the organised sector. However, there are small players from the unorganized sector who are in some or the other way a part of supply chain in this segment either manufacturing themselves but have limited or no presence in international markets due to various constraints. It is becoming increasingly important for the SMEs operating in this segment to comply with the global standards to be competitive as India is gearing up to be a part of the global supply chain.

Conclusion
With the revival of the economy, several strong government initiatives and pickup in industrial activity, a recovery of private investment is expected to further strengthen growth.

The recent government initiatives targeted towards cleanliness are expected to have a pivotal impact on the water treatment market. The ‘Swachh Bharat’ Mission, Clean Ganga initiative, and National Rural Drinking Water Program, are all aimed towards improving hygiene including better water and waste water treatment.

500 billion has been approved for the Atal Mission for Rejuvenation and Urban Transformation and of the ` 510 billion planned for the Ganga Rejuvenation Plan; ` 200 billion has been approved.

States such as Andhra Pradesh and Telangana have also taken steps to cater to industrial areas in order to accelerate growth. As per the Industrial policy framework of Telangana, every industrial park will be provided with a common effluent treatment plant whereas the government of Andhra Pradesh announced the Industrial Water Allotment Policy and plans to prepare a plan for the recycling of sewage water for industrial purposes.

The recovery in industrial activity in the Indian economy combined with the implementation of stricter effluent norms such as zero liquid discharge plants, waste water treatment, and polluted water discharge is expected to lead to an increase in demand for effective water treatment plants and chemicals, making it an attractive and fast growing market over the next 3-5 years