However, the motivational factors and goals behind increased capital expenditure vary across the different industries.
New analysis from Frost & Sullivan (environmental.frost.com), South African Industrial Water Market: 2010 Operational and Capital Expenditure Analysis - Annual Release, finds that the industrial sector accounted for 56.0 per cent of the South African industrial water market in 2009. In this research service, the South African industrial water market is segmented into six end-user industries, namely petrochemicals, energy and power, chemicals, automotive, pulp and paper and mining.
"The commissioning of return to service sites as well as establishment of new electricity generating plants by the state owned utility Eskom is one of the drivers of growth within the water markets," notes Frost & Sullivan Environmental & Building Technology Research Analyst Kudzanayi Bangure. "This is particularly the case for coal fired power stations that require intensive wastewater infrastructure as well as all wet cooled power stations that require purified water."
The key water infrastructure required for these plants include water supply pipelines (temporary and permanent), water and wastewater treatment facilities and dams for water storage facilities.
One of the criteria used to attain a Black Economic Empowerment (BEE) rating as stated in the BEE codes of good practice by end users that have a significant amount of public sector participation is the preferential procurement criteria. This requires that a company procure from a BEE-certified company.
"Due to this preferential procurement policy, end-users are reluctant to conduct business with water companies that have not gone through the BEE process," explains Bangure. "End-users would much rather prefer to do business with companies that have gone through the BEE process as this will assist them with their preferential procurement goals."
Companies are now seeking BEE certification through various means ranging from increasing employment equity to mergers and acquisitions with black-owned companies.
"Companies that wish to contract within the public sector will need to comply with either the relevant BEE Code or the Preferential Procurement Policy Framework Act (PPPFA) requirements," concludes Bangure.
If you are interested in more information about this study, please send an email with your contact details to Christie Cronje, Corporate Communications, at christie.cronje[.]frost.com.
South African Industrial Water Market: 2010 Operational and Capital Expenditure Analysis - Annual Release is part of the Environmental Growth Partnership Services programme, which also includes research in the following markets: The South African Mining Energy Water & Wastewater Treatment Equipment Markets, South African Water & Wastewater Treatment Equipment Markets, and South African Solid Waste Management Market. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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South African Industrial Water Market: 2010 Operational and Capital Expenditure Analysis - Annual Release / M5F3