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Market News

 July 18, 2006
Thailand: Environmental Technology

 The total market size of the environmental technology industry of Thailand has been estimated at $2 billion USD per year. The major players in the environment sector are the government sector (40%)and the private sector (60%). Construction and engineering service costs make up about 85% of the market size. The average market size of environmental equipment is about $300-$400 million USD per year and the growth rate is about 5%-10%.

In general, expansion within the environmental equipment industry is generated from population growth, pressures of urbanization and industrialization, implementation of environmental laws, and increased environmental awareness. This report presents an overview of the opportunities in the environmental equipment sector in Thailand.

Market Demand

The environmental equipment market in this report can be divided into three major sub-sectors: water and wastewater treatment equipment, solid waste treatment equipment and air pollution control equipment. The water treatment share is about 50% of the market. The solid waste treatment equipment and air pollution control equipment shares of the market are 30% and 20% respectively. About seventy to eighty percent of environmental equipment is imported each year (about $210-$280 million USD).

There are no restrictions on the importation of environmental equipment. Tariff rates imposed on equipment range from 0-5%.

The estimated market size for environmental equipment was $328 million USD in 2006, a growth rate of 3-5% from 2005. The moderate growth in 2006 was mainly due to the economy's slow-down that stemmed from political crisis, rising oil prices, rising interest rates, and major flooding in the central area of the country. The economical slow-down is expected to continue throughout 2007. The environmental equipment market is expected to grow by 10% in 2008 due to anticipated economic recovery.

Water/waste water treatment equipment

The main sources of water pollution have been the discharge of domestic sewage along with manufacturing and agricultural activities. Water and wastewater treatment equipment make up 50% of the environmental equipment market. The products included are pumps (submersible, centrifugal, aerator and mixer pumps, dosing pumps, vacuum pumps), sludge dewatering equipment, screening machinery, aerators, blowers, paddle wheels, and advance water treatment chemicals. The market size for the wastewater treatment equipment was approximately $164 million USD in 2006- an average growth of 3%-5% from 2005. Moderate growth is expected to continue due to spending by both the government and private sectors including foreign direct investment.

Thai government has allocated a budget of about $436 million USD annually for new wastewater treatment projects in Bangkok and other municipal areas. The Bangkok Metropolitan Administrative (BMA) has allocated a budget of approximately $600 million USD to finish three major wastewater treatment plants within the next three years. The Public Works Departments (PWD) of the Ministry of Interior has allocated a budget of $650 million USD to construct 47 wastewater treatment plants in several municipal areas within the next three years.

The private sector includes the industrial, commercial and agricultural sectors. The market size of the private sector is about $654 million USD. Thailand currently has over 120,000 factories registered with the government and about 10% of those factories are classified as water pollution sources. A growth in demand for wastewater treatment is expected from hotels, condominiums, department stores and high-rise buildings. Thai law requires that all wastewater from livestock be treated before being discharged into the public drain but only large farms will have the water treatment system.

Currently, the number of large farms looking for bio-gas technologies to convert their animal waste into energy is increasing. Another sector that represents a significant demand for water treatment is aquaculture, especially shrimp farming. Shrimp farming is one of Thailand's major foreign exchange earners.

Solid waste treatment equipment

Rapid growth in urban population and a change consumption patterns has contributed to an increase in the generation of solid waste. A large amount of solid waste is straining existing landfill sites, and the majority of disposal grounds are merely open dumps. Thailand's waste management system is moving towards recycle and reuse applications.

Solid waste handling equipment owns a 30 % share of the environmental equipment market, which is estimated at about $100 million USD with 5-10% annual growth. The equipment includes recycling and sorting equipment, garbage trucks, street sweeper trucks, and incinerators. According to a 2005 survey from the Pollution Control Department (PCD), Thailand generates 39, 221 tons of municipal waste per day or 14.3 million tons per year. Twenty one percent of the waste was collected in Bangkok and 32% was collected in surrounding municipal areas including the city of Pattaya. The remaining 47% was collected from non-municipal and local administration organization areas. Major buyers of waste treatment equipment include government agencies and private companies operating under government contracts.

Bangkok Metropolitan Administration (BMA) spends approximately $15-$20 million a year for waste collection, transportation and land fill operation. BMA is also likely to be the only government agency investing a large amount of money on the development of waste management systems. It operates over 6,000 garbage trucks that collect waste from main roads, streets, sub-streets and households throughout the night. In 2005, BMA collected 8,291 tons per day or 21% of solid waste in Bangkok. That amount represents a decline of 1,049 tons per day from the volume collected in 2003. BMA has set a goal of reducing waste by 10% each year.

Air Pollution Control Equipment

Thailand's air pollution situation has significantly improved over the last decade due to the effective implementation of air pollution reduction initiatives by environmental agencies within the government sector. Air quality in Bangkok and nearby cities is generally maintained within an acceptable range. Key air pollution issues in Thailand still include dust, small particulate matter (PM10) and ground-level ozone (O3).

The market size of air pollution control equipment was approximately $65 million with a growth rate of 5% annually. The government plays a major role in this segment. Currently, there are 53 air-monitoring stations nationwide, 17 of which are located in Bangkok. Data is collected from the stations and directly transferred to the PCD control center unit based in Bangkok. PCD is still in need of additional air pollution monitoring systems but given the current budget constraints, has no plans to set up new air monitoring stations within the next few years.

The three main sources of air pollution have been mobile sources (vehicle emissions), stationary sources such as factories and thermal-power generation plants, and the burning of municipal and agricultural waste. Major sources of air pollution in the transportation industry have been: two-stoke motorcycles, diesel trucks and ill-maintained passenger buses. They contribute to more than 70% of the air pollution in urban areas. The remaining pollutants are fossil fuel powered thermal sources that continuously generate SO2, NO2 and CO2 carbon dioxide) emissions. Although emissions from power plants have been effectively controlled, agricultural burning continues to produce a substantial amount of air pollution for the country.

Best Prospects

In the water and wastewater treatment equipment markets, opportunities exist in pumps (submersible pumps, centrifugal pumps, aerator and mixer pumps, dosing pumps, vacuum pumps), sludge dewatering equipment (filter presses, belt press, small dewatering systems), screening machines (bar screens, shredding screens), consultants and engineering services (pollution prevention technologies, advance wastewater treatment, water monitoring system, biological treatment system, renewable energy technology), and advance water treatment chemicals.

In the solid waste management markets, there is a need for waste handling equipment, recycle technology (including biomass), sorting equipment, landfill equipment, and incinerators.

Potential demand for air pollution control equipment exists in the area of air monitoring equipment, industrial continuous-emission monitoring equipment, indoor air pollution control equipment and vehicle emission monitoring systems.

Prospective Buyers

The following are major prospective buyers of environmental equipment:

For water pollution control equipment, prospective buyers are in the government sector and private sector. Within the government sector the following organizations are prospective buyers: the Sewerage and Drainage Department (SDD), Bangkok Metropolitan Administration (BMA), Department of Local Administration (DOLA), Ministry of Interior, The Public Works Department (PWD), Ministry of Interior, and The Industrial Estate Authority of Thailand (IEAT). Within the private sector, manufacturing plants, shopping malls, residential and commercial buildings, livestock and aquaculture farms are all prospective buyers. The largest sources of industrial water pollution are: food and beverage producers, paper and rubber processing plants, and chemical industries.

For air pollution control equipment, power plants of either thermal, combine cycle, biomass or coal application are major buyers of equipment. Manufactures can sell the product to the contractor directly without having a local representative in Thailand. The Department of Land Transportation, Ministry of Transportation and its 1,900 certified, country wide garages require tail-pipe emission testing equipment for all types of vehicle inspections. Emissions testing equipment is also required at auto service centers and car dealerships countrywide.

Demands for solid waste treatment equipment come from the municipal authorities and concession holders that are responsible for the treatment and disposal of solid waste. Industrial polluters especially from the electronics and metal finishing sectors are constantly looking for technologies to minimize the amount of solid waste produced on site. Technologies used to recycle waste are also in high demand.

Excerpts from "Thailand: Environmental Technology Industry", U.S. Commercial Service, June 2007.