U.S. Water News Online
WASHINGTON -- Access to safe drinking water and
contamination of surface water bodies is a major problem in many
areas of the globe. In the year 2000, approximately 1.1 billion
people (18 percent of the world's population) lacked access to safe
drinking water, and 2.4 billion (40 percent of the total population)
lacked adequate sanitation.
Most of these people live in developing countries, predominantly
in rural areas. Over one-third of the urban water supplies in
developing countries operate only intermittently, while roughly 40
percent of the drinking water supply is lost due to leakage in the
At the same time, countries have come to recognize that an
adequate supply of clean water and effective wastewater treatment is
essential for sustainable development. Governments and organizations
around the world are investing substantial sums in water and
wastewater improvements. These expenditures create real opportunities
for U.S. companies to export water and wastewater equipment
Today, it is estimated that only 66 percent of wastewater is
treated in Europe, 35 percent in Asia, 14 percent in Latin America,
and almost none in Africa. Many important water bodies throughout the
world are in violation of local water quality standards. More than 35
percent of drinking water supplies in Africa are contaminated in
violation of national health standards, 21 percent in Asia, and 18
percent in Latin America and the Caribbean.
The principal constraints to the development of the water supply
and sanitation sector are funding limitations, inadequate cost
recovery, and inadequate operation and maintenance. As water sources
become contaminated, increasingly effective and costly treatment
methods are required.
'The lack of access to water for drinking and industrial uses, as
well as to wastewater treatment, is thus a major limitation to
The incentives for improving water and wastewater infrastructure
in developed countries are primarily regulatory, whereas in
developing countries, the driver is public health: 2.2 million
people, most of them children, die there every year from diseases
associated with the lack of safe drinking water, inadequate
sanitation, or poor hygiene.
As a result, the global water market has been growing rapidly over
the last decade and constitutes well over a third of the global
environmental market. This article aims to engage more water and
wastewater technology firms in exporting their products overseas by
providing background on overseas markets, and U.S. Department of
Commerce programs available to help companies take advantage of
Global market size and characteristics
The global market for water and wastewater equipment and chemicals
was estimated at $47 billion in 2001. Water-related services also
represent a significant share of the $77.1 billion (2001) consulting
and engineering market.
The United States, Western Europe, and Japan represent over 80
percent of the total market size, but those are mature markets with
an average growth of 3 to 4 percent. At the same time, the economic
recovery of emerging markets in Southeast Asia and Latin America from
the 1997 crisis, rapid expansion of the Chinese economy, and
broadening demand in the Middle East promise a return to the 10 to 20
percent pre-1997 market growth in the developing world.
With assistance from international donors, public sector agencies
in developing countries, particularly in Asia, have launched
multi-million-dollar spending programs in water supply and
sanitation, and are encouraging private sector investments. The
proportion of industrialized countries' development assistance
devoted to water supply and sanitation increased steadily from 1986
to 1996, rising from 3.4 percent to 6.6 percent of total assistance.
In terms of cash, bilateral commitments from industrialized
countries for assistance to developing countries in this sector rose
from $1 billion in 1986 to $2.9 billion in 1996 (these numbers do not
include France). In absolute terms, Germany's and Japan's donor
funding was particularly large: Germany spent nearly $3.4 billion,
while Japan invested $9.5 billion.
Best prospect countries
The countries that represent best prospects for U.S. exporters of
water and wastewater equipment and services are determined by a
number of factors, including:
Brazil, China, India, Japan, South Korea, Mexico, Spain, Taiwan,
and the United Kingdom all have water and wastewater markets that
exceed $1 billion in size. Such emerging markets as China, India,
South Korea, Taiwan, Mexico, and Brazil have enormous potential due
to the extent of unmet water supply and sewerage needs. Their growth
rate usually exceeds 10 percent per year.
Japan, the United Kingdom, Spain, and Australia are mature markets
with slower growth, but their sheer size and favorable business
climate make them worth exporters' consideration.
The two Middle Eastern countries described in this report (Egypt
and Saudi Arabia) are niche markets for U.S. exporters. Egypt is a
large, exclusively aid-driven market, where massive U.S. foreign aid
gives a significant advantage to American companies. Saudi Arabia is
a highly specialized market with a focus on desalination technology,
where the United States also has a good strategic position.
Keys to successful exporting
In order to succeed in the international market for water and
wastewater technologies and services, U.S. firms should be aware of
the realities of doing business overseas, know and be able to take
advantage of particular market characteristics, and use available
information support services. The Department of Commerce offers a
number of programs to help U.S. exporters achieve the necessary level
of expertise to do business overseas.
According to environmental exporters, key success factors in
overseas markets include:
1) Understanding local markets. The first step in a successful
export market strategy is, knowing where the markets are and how to
access them. Knowing the stage and pace of market development, host
government regulations, and the local business culture is critical in
prioritizing business development efforts. The U.S. Department of
Commerce offers a number of services to help companies learn about
overseas markets. By visiting the International Trade Administration
(ITA) website (www.environment.ita.doc.gov or generally,
www.ita.doc.gov) companies may find a plethora of research materials
and market reports on countries around the world.
ITA reports range from Country Commercial Guides that provide
details on particulars on doing business in a foreign country, to
specific International Market Insight Reports or Environmental Export
Market Plan reports that provide specific information on the
environmental market of a country. All reports are available free of
charge to U.S. companies on the ITA website. Additionally, for a fee,
companies may choose to contract individual research through the U.S.
Department of Commerce for their company's use only. (Further details
available on the ITA website) The Department's Office of
Environmental Technologies also provides detailed country analysis
reports on the top markets for environmental technologies. These
reports are available by visiting www.environment.ita.doc under
The Office of Environmental Technologies staff, each with regional
and sub-sector expertise on the top markets for environmental
technologies can provide expert advice, trade statistics and
information on the top environmental markets as well. For a staff
listing and areas of expertise, please visit the above listed
2) Building alliances and working effectively with partners in
export countries. Local partnerships and representation are desirable
for U.S. companies so they can learn about attractive market
opportunities before the competitors. Methods for developing a local
presence range from hiring a local consultant or agent to represent
the firm, to establishing a local office or a joint venture. Engaging
in joint exporting activities (through joint ventures and consortia)
with other U.S. firms is another way to enter a new market.
The U.S. Department of Commerce may also help U.S. companies find
local partners in overseas markets through programs such as the
International Partner Search and Gold Key Programs. For a fee, the
Department of Commerce will find and screen potential business
partners for U.S. companies relying on the expertise of the local
U.S. Embassy in the country. There are a number of other programs of
this nature. Details again can be found by visiting www.ita.doc.gov.
The U.S. Department of Commerce has over 140 offices worldwide
available to assist U.S. companies with export endeavors.
The Department of Commerce also hosts a number of trade promotion
activities and events in the U.S. and abroad to help U.S. companies
meet potential buyers, representatives, and to learn about overseas
opportunities. For example, the Department hosts technical seminars
at major U.S. and foreign trade shows, organizes matchmaking
appointments for U.S. companies both in the U.S. and abroad, hosts
trade missions overseas, and other activities to help U.S. industry
meet potential business partners. A list of upcoming trade events may
be found on the ITA website by visiting www.ita.doc.gov, and for a
list of environmental industry-specific events, please visit
3) Finding financing for export activities. Development assistance
is a primary driver in the water and wastewater sectors of emerging
market countries. Multilateral development agencies strongly support,
through technical and financial assistance, water supply
infrastructure, wastewater treatment systems, and watershed clean-up
projects, representing significant market opportunities. U.S.
technology and services companies also can take advantage of the many
U.S. investment and export credit programs. Commercial financing
sources include private investment funds, U.S. and local commercial
banks, and vendor financing.
The Department of Commerce maintains close, working relationships
with a number of U.S. government agencies involved in financing and
can help connect your company to the appropriate contact within the
agencies. (e.g. U.S. Export- Import Bank, Inter-American Development
Bank, World Bank, etc.) The Department also has full time staff in
all of the multilateral development banks available to assist. The
Office of Environmental Technologies recently published a report on
Financing Environmental Exports. This report may be found by visiting
www.environment.ita.doc listed under "Market Research."
The Department of Commerce has helped numerous companies achieve
their export objectives. For more information on U.S. government
export programs, please visit the ITA website at www.ita.doc.gov or
contact the Office of Environmental Technologies Industries for
information and/or referrals. (202) 482-5225. The Hach Company is an
example of a U.S. company that has successfully built an export
business that relies on close relationships with distributors aboard
using Department of Commerce services. Their case is presented below.
Case study: Building a network of top-notch local distributors: the
"The advantages of entering into distributor and dealer
relationships far outweigh the costs," says Paul Goltz, director of
international sales and marketing, The Hach Company.
The Hach Company of Loveland, Colorado, is an internationally
recognized manufacturer and distributor of analytical instruments and
reagents used to test the quality of water and other aqueous
solutions. The company employs almost 1,000 people in the United
States and has been selling its products overseas since the 1950s.
Hach has built a professional distributor network in over 100
countries; most dealers and sales representatives have well over 10
years of service working with the Hach Company and building markets
for its products.
The Hach Company believes that strong local relationships are key
to export success. Local affiliates fulfill such critical functions
as negotiating new and sometimes frustrating business climates,
arranging payment, and addressing tariffs and other barriers.
The Hach Company has established a formal process for selecting
and training local distributors, but it also believes that the
enthusiasm and capability of the selected local affiliate is
critical. Hach representatives look for key characteristics such as
honesty, motivation, and a strong commitment to growth.
Hach identifies dealer prospects through the Agency/Distributor
Service and the "Gold Key Service" of the Rocky Mountain U.S. Export
Assistance Center and by making solid contacts at the U.S. Department
of Commerce's trade and catalogue shows. Other prospective dealers
have been located through responses generated from their ongoing,
multilingual promotional efforts and through overseas Technical Sales
Overseas dealers are required to become experts on all facets of
the Hach product line. As a result, the company has established an
exhaustive process for training its distributors. Distributors are
encouraged to visit the headquarters and the Hach Technical Training
Center for hands-on training. In addition, they are required to
attend factory-sponsored instrument repair courses presented in the
United States and abroad. Since 1996, Hach has held technical
sessions for its distributors in Australia, South Asia, Southern
Africa, the Pacific Rim countries, the Caribbean, and Latin America.
Recently, the Hach Company expanded its Central Asian presence
into Kazakhstan. The business climate and language in this former
Soviet economy pose a challenge to American companies. Finding a good
local distributor is critical to its success in this market. Hach's
approach was to send staff to the country to identify and build a
relationship with a new distributor or sales representative. After a
number of years of work, Hach identified a promising distributor
candidate. Hach staff sent used equipment to Kazakhstan so that the
distributor and its customers could see and feel the products. Now,
Hach has applied for U.S. Commerce Department funds to bring its
Central Asian distributors to the United States for training. Growth
has been slow in the new market, but the company is already beating
internal projections. This is in large part due to the fact that its
distributor demonstrates the real enthusiasm and excitement that Hach
requires of its affiliates.
For more information, contact Paul Goltz, director of
international sales and marketing at (800) 227-4224 or the Web site
Source: Primary interview with Paul Goltz.
Sources Environmental Business International. Environmental
Technologies Reference Guide. San Diego, Calif. (June 2003)
International Trade Commission. ITC Dataweb. www.itcdataweb.gov
U.S. Department of Commerce. Water & Wastewater Technologies
Export Market Plan. Washington, DC (August 2002)
(Article adapted from the U.S. Department of Commerce's Global
Water & Wastewater Export Market Plan)
By: Ellen Bohon Senior International Trade Specialist Office of
Environmental Technologies Industries U.S. Department of Commerce
Washington, DC 20230.
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