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New entrants in water industry are bringing emerging technologies that will disrupt the industry and create new opportunities, according to Lux Research. Despite a drumbeat of pessimism, the $600 billion water industry boasts of a sizeable number of profitable large companies.
A review of 150 companies across the value chain - representing 23% of the market - found average operating profit of 12.9%, torpedoing claims that it is impossible to make money in the water business. Customer-facing sectors in public service and small consumer systems do even better, clocking 14% profits.
“To read recent headlines in the water industry, one might think the sector is impossible to navigate, but that could not be further from the truth. By targeting worthwhile market sectors and keeping in mind some key sector-specific principles, a company can build a successful business,” said Brent Giles, Lux Research Senior Analyst and the lead author of the report titled, ‘Making Money in the Water Industry’.
According to Lux Research, a quarter of the start-ups are focussing on monitoring, forecast and control, an area that includes advanced sensors and process control. Nearly another quarter are focussing on basic wastewater treatment.
An important development poised to go mainstream is low-energy, low-sludge wastewater treatment. Start-ups like Biogill, Microvi, and Emefcy's Sabre have developed simpler systems that do away with traditional energy-hungry blowers and significantly reduce the sludge resulting from treatment.