Water scarcity, population and economic growth, pollution and urbanization are all placing increased pressure on freshwater resources around the world. The gap between the supply of freshwater and demand for water for industrial, agricultural and domestic use is growing at a rapid pace. At the same time, the cost of desalination has come down steadily, and it is becoming a more affordable means of meeting the world’s growing freshwater needs. According to a new report from Pike Research, all of these factors will contribute to strong growth in the desalination technology market over the next several years. The market intelligence firm forecasts that global desalination investment will double from $8.3 billion in 2010 to $16.6 billion per year by 2016, representing cumulative spending of $87.8 billion during that period.

“The desalination plant supplier market is highly fragmented, despite a great deal of mergers and acquisitions activity during the last decade,” says managing director Clint Wheelock. “The top five suppliers captured only 25 percent of the market from 2007 to 2009. And as reverse osmosis is increasingly adopted as the major desalination technology, the barriers to entry are being lowered.”
In contrast, however, Wheelock notes that the market for key desalination components is far more concentrated. For example, more than 65 percent of the market for reverse osmosis membranes is controlled by three large players. The markets for high-pressure pumps and energy recovery devices are also quite concentrated. Pike Research’s analysis indicates that these competitive dynamics will be critically important as the stakes continue to increase in the rapidly growing global desalination market.

Pike Research anticipates that the Middle East/North Africa region will continue to be the global hub of desalination plant construction, but there will be significant growth opportunities in other parts of the world as well. The firm forecasts that, in 2016, the top five markets in terms of installed capacity will be Saudi Arabia, the United Arab Emirates, the United States, China, and Israel. Worldwide desalination capacity will reach 126 million cubic meters per day by 2016, up from 76 million in 2010.

Pike Research is a market research and consulting firm that provides in-depth analysis of global clean technology markets. For more information, visit www.pikeresearch.com