Identifying Key Opportunities and Markets in Vietnam’s Water and Wastewater Market ENERGY, WATER AND WASTEWATER CONFERENCE 18 March 2011 | Tan Binh Exhibition & Convention Centre, Ho Chi Minh City, Vietnam Prepared & Presented by: Melvin Leong Environment & Building Technologies Practice Frost & Sullivan, Kuala Lumpur
‘ Low’ when less than 10 percent of total available is withdrawn;
‘ Moderate’ when 10 to 20 percent of total available is withdrawn;
‘ Medium-High’ when 20 to 40 percent of total available is withdrawn; and
‘ High’ when more than 40 percent of total available is withdrawn
Source: The World Business Council for Sustainable Development, and Frost & Sullivan
Water & Wastewater Situation (Contd…) Market Share by Segments (World), 2010 Services : Management of environmental outputs and by-products Equipment : Supply of equipment related to services and resources sector Resources : Management of environmental sources and inputs Note: All figures are rounded. Source: Frost & Sullivan World Environmental Market Size 2010: $671.2 billion
Water & Wastewater Situation (Contd…) Note: All figures are rounded. Source: Frost & Sullivan
Market Size Trade Value of Environmental Equipment by Country and Types of Equipment (Asia Pacific), 2009 Note: All figures are rounded; Vietnam is based on 2008 data. Source: Frost & Sullivan, Customs Department in respective countries Source: Frost & Sullivan Water & wastewater treatment equipment leads the environmental market in Vietnam Trade Value (Export & Import) (2008) % Breakdown Water & Wastewater Treatment 44.9 Waste Treatment 43.6 Air Pollution Treatment 11.5 Water / Wastewater Treatment Equipment Equipment for water filtration, water / wastewater purification, pumps, valves, flow measurement Waste Treatment Equipment Equipment for floor sweepers, cleaning machinery, incineration equipment, sorting, screening, trash compactors, recycling Air Pollution Treatment Equipment Equipment for gas purification and filtration, liquefying gas, odor eliminator, sprayers for gas
Market Size (Contd…) Water and Wastewater Infrastructure Services Market: Revenue Forecasts (Vietnam), 2005 – 2014 Note: All figures are rounded. Source: Frost & Sullivan CAGR (2009 – 2014) = 6.7% Market size includes equipment supplies, capital expenditures, and operational expenditures for municipal works Year Revenues ($ Million) Revenue Growth Rate (%) 2009 529.4 5.6 2010 558.8 5.6 2011 592.7 6.1 2012 631.7 6.6 2013 677.2 7.2 2014 732.5 8.2
Key Market Trends Key Trends in the Water / Wastewater Industry (Vietnam), 2010 Source: Vietnam Environment Monitor, and Frost & Sullivan Region Water Resource Issues Water Quality Issues Northwest Region Flashfloods, floods, seasonal drought Reservoir siltation and construction Generally good river – upstream/downstream – water quality, good quality of groundwater Northeast Region Flashfloods, floods, seasonal drought Urban pollution, saline intrusion, marine transport, pollution risks Red River Delta Floods, cross-sectoral water allocation and use Intensive agriculture, groundwater over-exploitation Urban and industrial pollution, saline intrusion, agrochemical pollution, transport pollution risks North Central Coast Flashfloods, floods, seasonal droughts Low river flow during prolonged dry season in South of region Urban pollution, saline intrusion South Central Coast Flashfloods, floods, severe seasonal droughts Low river flow during prolonged dry season entire region Urban pollution, saline intrusion Central Highlands Flashfloods, seasonal droughts Groundwater over exploitation for irrigation, reservoir construction Generally good river – upstream/downstream – water quality, good quality of groundwater Northeast of Mekong Floods, seasonal drought Sector wise water allocation and use, groundwater over exploitation Urban and industrial pollution, saline intrusion Mekong River Delta Flood, cross-sectoral water allocation and use Intensive agriculture/aquaculture, groundwater over-exploitation Saline intrusion, low pH in rivers (acid soils), agrochemical pollution, transport pollution risks
Key Market Trends (Contd…) Water Resources and Consumption (Vietnam), 2010 Note: All figures are rounded. Source: Frost & Sullivan
Key Market Trends (Contd…) Water Supply and Wastewater (Vietnam), 2010 Note: All figures are rounded. Source: Frost & Sullivan
Products and Services Criteria Service Criteria Product Criteria Two of the most important determining factors by asset owners in Vietnam are cost and technology. Cost would include operation and maintenance cost. Low operation and maintenance cost should not forfeit the quality of technology.
Most of the wastewater infrastructure and technology in the country are of low capacity and low efficiency.
Availability, service, functionality, and supplier/retailer recommendation come next in priority ranking.
Equipment availability is limited in the country.
Service would include improvement and staff capability.
Note: All figures are rounded. Source: Frost & Sullivan
As Vietnam is dependent on Official Development Assistance (ODA) assistance in the improvement of its water supply and water treatment facilities, most of the materials required by its projects are imported. Among the major equipment that it imports include:
Water meters, valves and pumps, motors
Water treatment chemicals
Water filtration systems
Water control and monitoring equipment
Under-capacity treatment plants – a need to increase capacity with construction of new plants or expansion of new plants in major cities
Similar water and wastewater system to be provided in small towns and rural areas.
Direction & Funding Abilities by the Government, Agencies, and Asset Owners on Project Funding In order to finance its water projects, Vietnam depends on the Official Development Assistance (ODA) assistance that it receives. State-owned enterprises that manages the countries’ water supply and wastewater management, are receiving ODA assistance. Entities Abilities & Opportunities Municipal governments
Receives overseas development assistance (ODA) funds (such as ADB, World Bank, and others)
The largest customers for water supply equipment
Dependent on ODA funding
An overall planner of investment projects and coordinator of ODA assistance
Issues legal documents, standards, procedures, instructions, and economic and technical norms in the fields of water and environment
Ministry of Planning and Investment Ministry of Natural Resources and Environment
Direction & Funding (Contd…) Funding Opportunities ODA (Official Development Assistance) loans and grants 2010 2011 2012 In Vietnam, funding for water supply and wastewater projects comes from various sources: Bilateral contributors such as Japan, France, Denmark, the Netherlands, Finland, Germany, and Australia. World Bank ($2.5 billion) World Bank ($2.6 billion) World Bank ($2.7 - $2.8 billion) (projection) Asian Development Bank ($1.5 billion) Asian Development Bank ($1.5 billion) Asian Development Bank ($1.5 - $1.6 billion) (projection)
Restraining Forces Restraining Forces for Investment over the Time (Vietnam), 2010 High Medium Low Short Run Medium Run Long Run Degree of Impact Time (01) Policies and implementations may be inadequate (02) Low water tariff (03) Lack of relevant human resources and local expertise Source: Frost & Sullivan
Issues that Need to be Addressed Issues that Need to be Addressed in Waste and Wastewater Market (Vietnam), 2010 Pollution is the most alarming issue to be dealt in Vietnam. Tracking and preventing pollution is the issue on regulation implementation and enforcement and wastewater infrastructure and technology. Note: All figures are rounded. Source: Frost & Sullivan
Short Term Needs Short Term Needs in Water and Wastewater Market (Vietnam), 2010 Note: All figures are rounded. Source: Frost & Sullivan
Selection Criteria Capital costs is the most common concern during the process of vendor selection. Attractive commercial proposals are at better advantage As local professionals are limited, technical expertise is valued in Vietnam
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For Additional Information Donna Jeremiah Corporate Communications Asia Pacific +603 6204 5832 [email_address] Carrie Low Corporate Communications Asia Pacific +603 6204 5832 [email_address] Melvin Leong Program Manager Environment & Building Technologies +603 6204 5800 [email_address]